Many American investors may think the worst of the economic downturn is over, but they are completely wrong, writes Clinton administration economist and NYU professor Nouriel Roubini.
“Conditions in the U.S. labor markets are awful and worsening,” writes Roubini in The New York Daily News.
“While the official unemployment rate is already 10.2 percent and another 200,000 jobs were lost in October, when you include discouraged workers and partially employed workers the figure is a whopping 17.5 percent.”
Though losing 200,000 jobs per month is a bit better than the 700,000 jobs lost in January, job losses still average more than the per month rate of 150,000 during the last recession.
Job losses will last until the end of 2010, until well after the next general election, Roubini says.
“Remember: The last recession ended in November 2001, but job losses continued for more than a year and half until June of 2003; ditto for the 1990-91 recession,” writes Roubini.
The long-term outlook for workers and is even worse than current job loss numbers suggest.
As a way of sharing the pain, many firms are telling their workers to reduce hours, take furloughs and accede to lower wages.
“That fall in hours worked is equivalent to another 3 million full time jobs lost on top of the 7.5 million jobs formally lost,” writes Roubini.
“This is very bad news but we must face facts. Many of the lost jobs are gone forever, including construction jobs, finance jobs and manufacturing jobs.”
Recent studies suggest that a quarter of U.S. jobs are fully can be outsourced over time to other countries.
Concern about job losses is mounting everywhere. The National Association for the Advancement of Colored People (NAACP) is pressing the Obama administration to halt the hemorrhage of jobs in the economy, The New York Times reports.
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