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Getting Back Lost Jobs Could Take 5-Plus Years

Getting Back Lost Jobs Could Take 5-Plus Years

Associated Press

February 22, 2010

WASHINGTON – Job creation is stuck on an uphill treadmill.

So many jobs have been lost that the U.S. must run hard just to keep from losing more ground. Despite the election-year emphasis on job creation by both parties, the short-term outlook is bleak.

While many economists believe the recession is technically over, nearly 15 million Americans remain unemployed. Six million of them have been out of work for more than half a year.

President Barack Obama is asking for almost $300 billion more for recession relief and job formation. The House last December passed a $154 billion spending bill focused on jobs. The Senate is due to debate a far more modest version on Monday, but appears bogged down in partisan bickering.

With or without new legislation, reducing a jobless rate that’s now just under 10 percent to prerecessionary rates of about half that won’t happen soon, especially as government efforts to prop up the economy begin to wind down.

It could take up to five years or more just to get back to even.

There are limits to how many jobs can be created by government action – either directly or with tax and other incentives for the private sector – and how quickly.

“We’ve gone though a period of enormous job loss,” said Robert Shapiro, a former adviser to President Bill Clinton and now chairman of Sonecon, an economic advisory firm.

“The long-term problem is exacerbated by the fact that credit’s still not available because we really haven’t reformed the financial system. People don’t have confidence in the future and people are poorer so demand is down. All these things are coming together,” Shapiro said.