The decade ahead could be a brutal one for America's unemployed — and for employed people hoping for pay raises.
At best, it could take until the middle of the decade for the nation to generate enough jobs to drive down the unemployment rate to a normal 5 percent or 6 percent and keep it there. At worst, that won't happen until much later — perhaps not until the next decade.
The deepest and most enduring recession since the 1930s has battered America's work force.
The unemployed number 15.4 million. The jobless rate is 10 percent. More than 7 million jobs have vanished. People out of work at least six months number a record 5.9 million. And household income, adjusted for inflation, has shrunk in the past decade.
Most economists say it could take at least until 2015 for the unemployment rate to drop to a historically more normal rate. With the job market likely to stay weak, some also foresee another decade of wage stagnation.
Even though the economy probably will keep growing, the pace is expected to be plodding. That will make employers reluctant to hire. Further contributing to high unemployment is the likelihood of more people competing for jobs, baby boomers delaying retirement and interest rates edging higher.
All of this would come after a decade that created relatively few jobs: a net total of just 464,000. By contrast, 21.7 million jobs were generated in 1989-99.
The 'New Abnormal'Economist David Levy, chairman of the Jerome Levy Forecasting Center, says the U.S. faces a new era of chronically high unemployment, averaging 8 percent or more over the next decade.
The "New Abnormal," he calls it.
Levy thinks the New Abnormal also means average pay will dwindle, along with consumer prices. That would make it harder for households to pay down debt, he warns.
By the Federal Reserve's reckoning, the jobless rate could remain as high as 7.6 percent in 2012. And it would take two or three years after that for the job market to return to normal, the Fed says.
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