"If the Recession Were a Bout of the Flu..."

Obama is on the road this week to make a series of speeches across the country about the state of the economy and the American middle class. As Gigi Douban for Marketplace reports, many people have doubts that the President can do much of anything about the economy, due in part to the opposition he faces from Congressional Republicans.

Even if Congress and the President were working together in perfect harmony on this issue, the reality is that the economy is in a pretty bad way. As Heidi Shierholz with the Economic Policy Institute explains, we're technically four years post-Recession, but only "a fifth of the way out of the hole left by the Great Recession"  when one compares the share of the working-age population who has a job today compared with pre-recession. My colleague Rachel Black was quoted in yesterday's Atlanta Journal-Constituion in a similar vein:  “The recession made a big hole and it’s going to take a long time to fill it."

While I think the "hole" analogy is perfectly capable of encapsulating the severity of the Recession, Colin Gordon (a professor of history at the University of Iowa) has an effective and illustrative analogy about the Great Recession that I think adds a little something extra. As Gordon writes in a recent Dissent Magazine piece, "If the recession were a bout of the flu, we would be at about that point where the fever has broken—but we still feel like throwing up most of the time."

As his piece explains, when you look at measures of the economic recovery beyond the unemployment rate, "things are no longer getting worse, but they are not getting much better either." The long-term unemployment rate, the prevalence of "involuntary part-time" workers, and the underemployment rate all suggest the economic recovery still has an incredibly long way to go. (Jared Bernstein favors a car shifting gears analogy, so if automobiles are more your thing, be sure to check that out.)

There are still three people out there job-hunting for every one new position that opens up. (Keep that statistic handy for when you hear someone complaining about how unemployed people are "lazy" and "don't want to work.") Disparities in employment, particularly along racial and education lines, remain persistent.

Certainly there have been some signs of improvement. Between March and June of 2013, the unemployment rate declined in 30 states and D.C. That should count for something, right? 

Not so fast, says Gordon.

Part of a weak recovery means the share of jobs that are part-time has gotten stuck at about 20 percent. As Gordon puts it, "Some workers want part-time work, but it is pretty clear that this is a recessionary hangover." Furthermore, the pace of job recovery overall has been "glacial" and has "barely kept pace with those joining or returning to the labor force."

The graph below from Calculated Risk helps explain why the recovery still has such a long way to go. When you compare job losses to peak employment for the twelve post-World War II recessions, it becomes crystal clear that this recent recession was substantially different in character than any of its recent predecessors.

You don't have to take a long look at this graph to see that one of these lines is not like any of the others. The red line shows that the impact of the 2007 recession was far more dramatic than previous ones.

To revisit the recession-as-flu analogy, the economy has been violently ill for half a decade now. Even though we're technically seeing improvements (temperature has come down somewhat, phlegmy-cough has subsided), we're still too weak and prone to nausea to handle much more than tea and broth at the moment.

What can we do at this point to promote a speedy recovery to good health? The old standbys for the flu (rest, hydration, and nourishment) may offer something of a blueprint for the economy.

Continue to support programs that have responded effectively to the high levels of poverty and hardship brought on by the Recession, such as the Supplemental Nutrition Assistance Program. Address structural barriers to employment, particularly those affecting historically marginalized groups. For a few ideas, take a look at MDRC's research on the effectiveness at subsidized employment for "hard to employ groups" or at this proposal from a team of academic researchers to establish a "Federal Job Guarantee."

On top of addressing the immediate jobs crisis at hand, we need to turn our sights to inoculation against future recessions. Many Americans tumbled head first into the Great Recession without any personal savings to fall back on. While promoting personal savings isn't a cure-all for the problems of the whole economy, having a modest savings cushion on hand does give individuals and families a better shot at mitigating some of the most serious and harmful effects of possible future unemployment or another recession-induced event.

Recognizing the important role that the U.S. tax code plays in Americans' savings efforts, my colleagues Reid Cramer and Elliot Schreur released a new paper this week that makes a strong case for reforming the tax system to be more inclusive and supportive of Americans of all income levels. Emergency and other short-term forms of savings can serve as the first line of defense for families facing a major life disruption, like unemployment. Thus one strategy for both President Obama and members of Congress to contemplate as they think about how to repair the economy and prevent future problems is to re-envision the tax code into a system that recognizes the value in both short- and long-term savings AND creates meaningful pathways to saving for lower-income people. 

Let me know what you think in the comments below: What strategies do you see as most effective at addressing long-term un- and underemployment? Where does savings promotion fit into this picture?