Even if jobs start to come back sooner than expected—which may happen as more stimulus money starts to kick in—U.S. unemployment is likely to remain high for years to come, as much as 7 or 8 percent even into 2014. “The average American will not be better off in five years—unemployment will remain high and wage growth will continue to be flat,” says George Soros, who forecast an “age of wealth destruction” four months before the crisis hit. But in this recovery, flat is the new up. Any near-term uptick in jobs will probably be small, because there’s still plenty to be milked from existing workers. November’s numbers show that the average workweek is only 33 hours, giving bosses plenty of room to crack the whip before hiring new employees. And one big reason for the November surprise was that the Obama administration has spent billions making sure job losses weren’t worse. Even if the administration diverts bank-bailout money to support small businesses, as has been suggested, it will be impossible to replicate the stimulus surge of 2009. Growing debts simply don’t allow Washington to spend much more.
Rana Foroohar, Newsweek
Partnerships for R/GA Ventures. Raised in California, adopted by Texas. Opinions expressed here are mine and they are fantastic.