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Home Publications Blogs Beat the Press How Many Jobs Does it Take to Hold the Unemployment Rate Constant?

How Many Jobs Does it Take to Hold the Unemployment Rate Constant?

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Saturday, 06 November 2010 08:08

This one should not be all that hard but the papers have numbers all over the place. Let's turn to our old friend, arithmetic, to shed some light on the topic. The Congressional Budget Office tells us that the labor force is growing at the rate of 0.7 percent a year. The current size of the labor force is 153.9 million. This implies that we need about 1.1 million jobs a year to keep even with the growth of the labor force. (The number would be a bit less if the 6 percent share of self-employed in the labor force held constant.) That translates into a bit over 90,000 a month.

The 151,000 jobs reported for October is about 60,000 more than is needed to keep the unemployment rate from raising. At this pace it would reduce the pool of unemployed workers by 720,000 over the course of a year. With a gap of about 10 million jobs at present, this rate of job growth would fill the gap in around 14 years.

In order to fill this gap in a reasonable period of time, say 3 years, we would need job growth of 370,000 a month. This would bring the economy back to normal levels of unemployment by late 2013, six years after the onset of the recession.

 

Comments (8)Add Comment
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written by izzatzo, November 06, 2010 8:49
YOU HATE AMERICA DON'T YOU MR COMMY MOMMY! EVERYTIME THERE'S A POSITIVE SIGN IN THE ECONOMY YOU TRASH IT WITH THE SAME SOCIALIST ARITHMETIC THAT'S BRAINWASHED ALL STUPID LIBERALS! IT'S OBVIOUS THERE'S MORE JOBS BECAUSE OF THE REPUBLICAN LANDSLIDE THAT REDUCED UNCERTAINTY! THE PEOPLE HAVE SPOKEN FOR THOSE WHO KNOW HOW TO ADD AND SUBTRACT! GO SUBTRACT YOURSELF! VIVA LA TEABAGGER ARITHMETIC!
Clean-up at 8:49 please
written by ComradeAnon, November 06, 2010 8:57
I guess 2 + 2 does not equal 4 now.
Question for Mr. Baker or anyone that can answer this:
written by Brett, November 06, 2010 12:31
Where would you get information on how fast the labor force in other countries is growing? In particular, I'm wondering about Mexico.

Years ago it was estimated Mexico's employment needed to grow by 1 million a year just to keep up with population growth, but I'd like to calculate the current value to see if it's changed. Thanks for any help...
ComradeAnon
written by diesel, November 06, 2010 1:32
Izzatzo is Dean Baker's greatest admirer. The name calling is code and reveals that izzatzo has read (and presumably paid for) Dean's books. As one who has subsidized a scholar's or artist's professional efforts, a patron grants themselves a little easy familiarity.
...
written by Merijn Knibbe, November 06, 2010 3:59
@Dean Baker
the 360.000 jobs per mean 4,3 million per year. The last time anything like that happened was in 1994 (3.8 million). Average growth for the nineties was 2.1 million, for the 'zero years' between 2000 and 2009: - 1 million.

@brett: try the oecd website. It's a bit tricky to find the data, but it's there!
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written by ugo ubili, November 06, 2010 9:54
There is no better way to tabulate the exact number of job needed to float the economy.In actuality,once an individual who is willing to work find job and get fitted in a given sector he/she want to work,the economy is progressive. A progressive economy is where people can easily find and change job at will.Therefore,a model approach to solve massive unemployment problem is to tackle serious economic fundamentals from progressive insight.As a fact,economy is not necessarily flourshing because of number of people working perhaps because of productive capacity and volume in the economy. Essentially,putting numbers and figures to unemployment rate is easily confusing to people.
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written by RobW, November 07, 2010 12:40
This would bring the economy back to normal levels of unemployment by late 2013, six years after the onset of the recession.


Great. Just in time for President Paul to take credit, then?
unemployment
written by scott moore, November 09, 2010 8:11
Math is right on. Excellent.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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