Comparing Employment with the Great Depression

Comparing Employment with the Great Depression
by
David Schlecht

With the games that our government is constantly playing with the unemployment numbers, it’s impossible to get the real numbers and also impossible to compare today’s Great Recession with the Great Depression of the 30s.

Some of the many games is we no longer count the homeless, we don’t count the unemployed who don’t show up in the census. We often don’t even count those who have exceeded their 99 weeks of benefits. We don’t count those who are under employed, or those who are flipping burgers with a BS degree. Anything to make the numbers look better, and our government is using it.

One way to compare the depth of the current disaster with the last Republican Great Disaster is to compare changes in GDP, our Gross Domestic Product. This is the calculated value of the goods and services produced by the country.

Why should we compare these? These numbers show, not just how much we produce, but how much we’re working. The GDP goes up for reasons other than employment, but it’s a good general indicator.

Here is a graph showing the relative changes in GDP over the past recessions.

Changes in GDP in the past recessions

What you should pay close attention to is the length of time it takes to get back to normal GDP output, or in other words, back to normal employment.

Considering that we’re nowhere near back to normal in GDP, we can conclude that we are nowhere near back to normal in employment. Believe me, 8% is nowhere near the real rate  of unemployment.

And, considering that we haven’t even touched fixing the issues that triggered the current recession, and that we’re nowhere near putting Humpty Dumpty back together, perhaps we should hold on to our hats, or better yet, our wallets a while longer.