Job losses caused by the Great Recession explained

Job losses caused by the Great Recession refers to jobs that have been lost worldwide within people since the start of the Great Recession. In the US, job losses have been going on since December 2007, and it accelerated drastically starting in September 2008 following the bankruptcy of Lehman Brothers.[1] By February 2010, the American economy was reported to be more shaky than the economy of Canada. Many service industries (particularly in countries that either have the same unemployment rate as the United States or greater) have reported dropping their prices in order to maximize profit margins (looking to make use of any price elasticity of demand in their market segments). This is an era in which employment is becoming unstable, and in which being either underemployed or unemployed is a common part of life for many people.

Net job gains and losses by month

2008

2009

2010

2011

2012

Table

YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Annual Source
2006 277 315 280 182 23 77 207 184 157 2 210 171 2085 [9]
2007 238 88 188 78 144 71 -33 -16 85 82 118 97 1140
2008 15 -906 -80 -214 -182 -172 -210 -259 -452 -474 -765 -697 -3576
2009 -798 -701 -826 -684 -354 -467 -327 -216 -227 -198 -6 -283 -5087
2010 18 -50 156 251 516 -122 -61 -42 -57 241 137 71 1058
2011 70 160 212 322 102 217 106 122 221 183 164 196 2083
2012 360 226 143 96 110 88 160 150 161 225 203 214 2236
2013 197 280 141 203 199 201 149 202 164 237 274 84 2331
2014 144 222 203 304 229 267 243 203 271 243* 321* --- 2086*

Note: Job losses in June and July 2010 are largely attributed to US census worker jobs lost. Private sector jobs have increased during those months.

Since the start of the recession, 8.8 million jobs have been lost, according to the Bureau of Labor Statistics.[10]

In the U.S., jobs paying between $14 and $21 per hour made up about 60% those lost during the recession, but such mid-wage jobs have comprised only about 27% of jobs gained during the recovery through mid-2012. In contrast, lower-paying jobs constituted about 58% of the jobs regained.[11]

Canada

Drastic job loss in Canada started later than in the US. 45 crores jobs has been lost in the USA itself in the time period. Some months in 2008 had job growth, such as September, while others such as July had losses. Due to the collapse of the American car industry at the same time as a strong Canadian dollar achieved parity +10% against a poorly-performing US dollar, the cross-border manufacturing industry has been disproportionately affected throughout.[12]

(1) 37,000 jobs are gained in the self-employment category[21]

While job creation has increased in the past three months, most Canadians still complain about people getting laid off from work. However, a growing amount of these layoffs are considered for seasonal purposes and has little or no relation to the recession. Excluding Stelco employees, most laid off workers have six months to acquire a job while collecting unemployment insurance. After that, they must go on welfare and continue their job search from there.

The employment rate has been stabilized between 8.0% and 11.0% for the past two years; signifying the economic strength of Canada's financial institutions compared to its counterparts in the United States. Many job places in Canada (i.e., grocery stores and restaurants) have opted to reduce hours rather than lay off staff. This unemployment of job protection is especially in industries that are needed to keep the economy from going into a depression. While the automotive sector is slowly recalling workers back to work, grocery stores and restaurants have slashed hours in the face of the global recession.

Australia

April 2009 Australian unemployment rate: 5.5%[27]
July 2009 Australian unemployment rate: 5.8%[28]
August 2009 Australian unemployment rate: 5.8%[29]
September 2009 Australian unemployment rate: 5.7%[30]
October 2009 Australian unemployment rate: 5.8%[31]

The unemployment rate for October rose slightly due to population growth and other factors leading to 35,000 people looking for work, even though 24,500 jobs were created.

In general, throughout the subdued economic growth caused by the recession in the rest of the world, Australian employers have elected to cut working hours rather than fire employees, in recognition of the skill shortage caused by the resources boom.

United Kingdom

In September 2007, approximately a year before the recession began, unemployment stood at 1,649,000.[32] By the end of 2008, that figure had risen to 1,860,000 - an increase of 211,000 and nearly 13%.[33] By March 2009, unemployment had increased to more than 2,000,000 - the highest level the nation had seen for more than 12 years.[34] It reached 2,261,000 by June that year,[35] and by April 2010 had exceeded 2,500,000 for the first time in 16 years.[36]

Confounding variables in determining cause and effect

The causality linking job losses to reduced business revenue is obviously grounded in reality, at least to a large extent. After all, it is self-evident that a firm with one million dollars in annual revenue cannot pay a two-million-dollar annual payroll without going into either debt or bankruptcy. However, at least some of the apparent or alleged causality is difficult to confirm quantitatively, because the data collection and analysis that would be required to do so faces high barriers to implementation, principally the privacy surrounding the accountancy. There is a common theme among working people,[37] although it is not widely studied or reported in reliable academic or journalistic sources, along the lines that firms are "using the recession as an excuse" for staff reductions whose true root causes lie elsewhere, such as:

This theme also extends to compensation reduction or growth freezes, with the suspicion again being that the recession is an excuse for, e.g., wage raise freezes, wage cuts, or increasing the employees' contribution percentage for (or lowering the benefits of) company health insurance, company retirement plans, and so on.

It is very difficult to accurately detect, verify, or track the data that would be needed to test these hypotheses. Short of any outright auditing (which has no legally justifiable basis), firms have a fair amount of plausible deniability. As for the concern that productivity growth drives unemployment, the very idea is controversial, and it depends on whatever the true reality may be in the relationship of automation to unemployment. Certainly a pattern of multiple jobless recoveries, where GDP grows while employment stagnates, makes the public wonder about firms' assurances that all layoffs are necessitated by business conditions alone.

Notes and References

  1. Web site: Unemployment Spike – September 2008 45 crores of job has been lost in the tenure in USA itself from a period rescession . Laidoffnation.com . 2010-01-21 . https://web.archive.org/web/20090727014645/http://laidoffnation.com/2009/06/recession-2008-2009/ . 2009-07-27 . dead .
  2. Web site: Jobs Report and the Monthly Employment Growth Statistics in US . 2021-01-27 . 2021-01-25 . https://web.archive.org/web/20210125031341/https://www.thebalance.com/jobs-report-monthly-employment-growth-statistics-3305732 . live .
  3. News: US unemployment rate eases to 10% . BBC News . 2009-12-04 . 2010-01-21 . 2009-12-17 . https://web.archive.org/web/20091217052557/http://news.bbc.co.uk/2/hi/business/8395249.stm . live .
  4. News: Fox . Justin . Payroll employment down 85,000 in December, unemployment steady at 10% - The Curious Capitalist - TIME.com . Curiouscapitalist.blogs.time.com . 2010-01-08 . 2010-01-21 . 2010-01-11 . https://web.archive.org/web/20100111040600/http://curiouscapitalist.blogs.time.com/2010/01/08/the-great-american-job-destruction-isnt-over-quite-yet/ . live .
  5. News: Goodman . Peter S. . Jobless Rate Falls to 9.7%, Giving Hope Worst Is Over . The New York Times . February 5, 2010 . A1 . .
  6. News: US sees 131,000 jobs lost in July . BBC News . 2010-08-06 . 2018-06-20 . 2018-06-25 . https://web.archive.org/web/20180625021327/https://www.bbc.co.uk/news/business-10890989 . live .
  7. News: Companies Shed Jobs Last Month, ADP Says . The Wall Street Journal . Justin . Lahart . 2010-10-07 . 2017-08-08 . 2021-11-27 . https://web.archive.org/web/20211127084802/https://www.wsj.com/articles/SB10001424052748703735804575535712155449120?mod=WSJ_hpp_LEFTWhatsNewsCollection . live .
  8. News: Job Losses Increase Pressure on Fed . The Wall Street Journal . Justin . Lahart . 2010-10-09 . 2017-08-08 . 2020-10-08 . https://web.archive.org/web/20201008045911/https://www.wsj.com/articles/SB10001424052748704657304575539760708117610?mod=googlenews_wsj . live .
  9. Web site: "Bureau of Labor Statistics" . 2014-12-07 . 2016-02-01 . https://web.archive.org/web/20160201005903/http://data.bls.gov/timeseries/CES0000000001?output_view=net_1mth/ . live .
  10. Web site: Employment Situation Summary . Bls.gov . 2010-01-08 . 2010-01-21 . 2009-10-06 . https://web.archive.org/web/20091006024659/http://www.bls.gov/news.release/empsit.nr0.htm . live .
  11. https://www.washingtonpost.com/blogs/wonkblog/wp/2012/08/31/low-wage-jobs-are-dominating-the-u-s-recovery/ "Low wage jobs are dominating the U.S. recovery"
  12. Web site: Hill. Bert. 2009-11-06. Ottawa unemployment rate up to 5.4 per cent. 2010-01-21. Ottawacitizen.com.
  13. Web site: Massive job losses hit Canada, U.S - December 5, 2008 . Canada.com . 2008-12-05 . 2010-05-01 . https://web.archive.org/web/20121109090704/http://www2.canada.com/topics/news/story.html?id=1036943 . 2012-11-09 . dead .
  14. Web site: Financial Post Published: Friday, March 13, 2009 . unemployment rate rises to 7.7% on 82,000 job losses . Financial Post . 2009-03-13 . 2010-05-01 . 2009-04-10 . https://web.archive.org/web/20090410064057/http://www.financialpost.com/news-sectors/story.html?id=1385317 . live .
  15. Web site: Canadian unemploymentr . Hrmguide.net . 2010-04-09 . 2010-05-01 . 2013-12-03 . https://web.archive.org/web/20131203121707/http://www.hrmguide.net/canada/jobmarket/canadian-unemployment.htm . live .
  16. Web site: Loonie soars on jobs report - March 12, 2010 . News.ca.msn.com . 2010-03-12 . 2010-05-01 . https://web.archive.org/web/20110714124941/http://news.ca.msn.com/top-stories/cbc-article.aspx?cp-documentid=23631954 . July 14, 2011 . dead .
  17. Web site: Canadian . The . Jobless rate remains at 8.2% . News.ca.msn.com . 2010-04-09 . 2010-05-01 . https://web.archive.org/web/20110720091256/http://news.ca.msn.com/top-stories/cbc-article.aspx?cp-documentid=23832989 . 2011-07-20 . dead .
  18. Web site: Canadian . The . 109000 fewer jobless people in Canada . Baystreet.money.ca.msn.com . 2010-05-31 . 2010-05-31 . dead . https://web.archive.org/web/20100529180821/http://baystreet.money.ca.msn.com/quotedata/partners/msn/ca/the_economy.aspx . May 29, 2010 .
  19. News: Canadian . The . 25000 fewer jobless people in Canada . Economic Times India . 2010-06-04 . 2010-06-13 . 2010-06-08 . https://web.archive.org/web/20100608044305/http://economictimes.indiatimes.com/news/international-business/Canada-sees-25000-new-jobs-created-in-May/articleshow/6011754.cms . live .
  20. Web site: Canadian . The . 20000 fewer jobless people in Canada . Canada.com . 2010-07-02 . 2010-07-04 .
  21. News: Julian Beltrame THE CANADIAN PRESS . Experts predict bleak job numbers tomorrow . thestar.com . 2009-06-03 . 2010-01-21 . Toronto . 2009-06-08 . https://web.archive.org/web/20090608224252/http://www.thestar.com/business/article/645120 . live .
  22. Web site: 2009 . Is Canada still in recession or in mother of all jobless recoveries? . October 20, 2010 . dead . https://web.archive.org/web/20091111133928/https://www.google.com/hostednews/canadianpress/article/ALeqM5i7F0zSW7kKY265PrP7X0s5pqnb4Q . November 11, 2009 .
  23. Web site: Latest release from the Labour Force Survey - February 2010 . Statcan.gc.ca . 2010-04-09 . 2010-05-01 . 2011-08-11 . https://web.archive.org/web/20110811033027/http://www.statcan.gc.ca/subjects-sujets/labour-travail/lfs-epa/lfs-epa-eng.htm . dead .
  24. Web site: Canadian Unemployment Rate At 8.0% October 9 2010 . 2010-10-20 . 2013-12-03 . https://web.archive.org/web/20131203121707/http://www.hrmguide.net/canada/jobmarket/canadian-unemployment.htm . live .
  25. Web site: unemployment rate dips to 7.9% November 5, 2010 . November 5, 2010 . https://web.archive.org/web/20110720091345/http://news.ca.msn.com/top-stories/cbc-article.aspx?cp-documentid=26236154 . July 20, 2011 . dead .
  26. http://www.statcan.gc.ca/subjects-sujets/labour-travail/lfs-epa/lfs-epa-eng.htm Latest release from the Labour Force Survey
  27. Web site: 6202.0 – Labour Force, Australia, April 2009 . 7 May 2009 . 2009-08-23 . 2009-06-11 . https://web.archive.org/web/20090611161308/http://abs.gov.au/AUSSTATS/abs@.nsf/allprimarymainfeatures/0C55555A36DACE00CA2575D1007BDD0A?opendocument . live .
  28. Web site: 6202.0 - Labour Force, Australia, December 2009 . Abs.gov.au . 2010-01-14 . 2010-01-21 . 2020-12-05 . https://web.archive.org/web/20201205165229/https://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia/latest-release . live .
  29. Web site: 6202.0 - Labour Force, Australia, August 2009 . Abs.gov.au . 2010-01-21 . 2009-09-17 . https://web.archive.org/web/20090917181615/http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6202.0Main+Features1Aug%202009?OpenDocument . live .
  30. Web site: 6202.0 - Labour Force, Australia, September 2009 . 8 October 2009 . Abs.gov.au . 2010-01-21 . 2010-06-11 . https://web.archive.org/web/20100611230252/http://www.abs.gov.au/AUSSTATS/abs@.nsf/allprimarymainfeatures/F9503E18F78A5C3FCA25766B00162732?opendocument . live .
  31. Web site: (Page not found) . October 20, 2010 . dead . https://web.archive.org/web/20110706121557/http://www.abs.gov.au/AUSSTATS/abs%40.nsf/mf/6202.0t . July 6, 2011 .
  32. News: Pay rising as unemployment falls . BBC News . 2007-09-12 . 2011-07-26 . 2009-01-24 . https://web.archive.org/web/20090124182711/http://news.bbc.co.uk/1/hi/business/6990785.stm . live .
  33. News: Unemployment increases by 137,000 . BBC News . 2008-12-17 . 2011-07-26 . 2013-06-01 . https://web.archive.org/web/20130601164655/http://news.bbc.co.uk/1/hi/business/7787280.stm . live .
  34. News: Unemployment passes two million . BBC News . 2009-03-18 . 2011-07-26 . 2023-03-27 . https://web.archive.org/web/20230327061533/http://news.bbc.co.uk/1/hi/7947766.stm . live .
  35. News: UK jobless total at 12-year high . BBC News . 2009-06-17 . 2011-07-26 . 2023-09-15 . https://web.archive.org/web/20230915003807/http://news.bbc.co.uk/1/hi/8104546.stm . live .
  36. News: UK unemployment increases to 2.5m . BBC News . 2010-04-21 . 2011-07-26 . 2023-03-27 . https://web.archive.org/web/20230327061601/http://news.bbc.co.uk/1/hi/8634241.stm . live .
  37. Hinted at by the many [informal/colloquial] online discussions found by web searches such as "using the recession as an excuse to lay off".

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