The rise in the U.S. stock market during the past year does not mean the Great Recession is over and in fact, most hard-hit Americans face continued joblessness in the future, says billionaire Mort Zuckerman.
Unemployment rates are holding around 10 percent as people give up looking for jobs, he says. In other words, the labor force is shrinking, Zuckerman writes in a Wall Street Journal column.
“The problem in the job market going forward is not so much layoffs in the private sector, which are abating, but a lack of hiring,” says Zuckerman.
“Unemployment, in short, has graduated from being a difficulty, a worry. It is now a catastrophe, with some 15.3 million Americans out of work.”
Federal stimulus programs are failing to make up for county, city and state budget deficits.
Government spending in long-term projects such as infrastructure and expanding broadband Internet access would help, says Zuckerman.
Many economists say the U.S. economy is technically out of the recession although unemployment remains a problem.
According to a USA Today poll of 50 economists, unemployment in December, which hit 10 percent, would have hit 10.8 percent had it not been for President Barack Obama's $787 billion stimulus program.
The poll, however, reported that two-thirds of the economists said the administration should do more to create jobs via suspending payroll taxes for Social Security and Medicare, spending more on infrastructure, enacting a flat tax on income and extending jobless benefits.
Jobless rates will hover in double digits until the third quarter of this year, the poll found.
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