Replacing Lost Jobs

Jul 6, 2011 | Business & Economy, Business-Friendly Environment, Economy, Talent

According to a study by McKinsey Global Institute, it will take 5 years for the U.S. to replace the 7 million jobs lost during the “Great Recession” of 2008-09. Add to that the fact that millions more Americans are expected to enter the workforce over the next decade and the country needs to produce 21 million new jobs by 2020.

In their study, An economy that works: Job creation and America’s future, McKinsey states:

  • The United States has been experiencing increasingly lengthy jobless recoveries? from recessions in the past two decades. It took roughly 6 months for employment to recover to its prerecession level after each postwar recession through the 1980s, but it took 15 months after the 1990-91 recession and 39 months after the 2001 recession. At the recent pace of job creation, it will take more than 60 months after GDP reached its prerecession level in December 2010 for employment to recover.
  • The United States will need to create a total of 21 million new jobs in this decade to put unemployed Americans back to work and to employ its growing population. We created three possible scenarios for job creation, based on sector analyses, and find that they deliver from 9.3 million to 22.5 million jobs. Only in the high-job growth scenario will the United States return to full employment in this decade.
  • Six sectors illustrate the potential for job growth in this decade: health care, business services, leisure and hospitality, construction, manufacturing, and retailâ?¦
  • Under current trends, the United States will not have enough workers with the right education and training to fill the skill profiles of the jobs likely to be created. Our analysis suggests a shortage of up to 1.5 million workers with bachelor’s degrees or higher in 2020. At the same time, nearly 6 million Americans without a high school diploma are likely to be without a job.
  • Moreover, too few Americans who attend college and vocational schools choose fields of study that will give them the specific skills that employers are seeking
  • The nature of work is changing in ways that present both opportunities and challenges. Ubiquitous digital communications and advanced information systems enable employers to disaggregate jobs into specialized tasks, which can then be performed remotely…

They offer recommendations including in the areas of skills and workforce development, growing emerging industry sectors, and clearing the path for hiring and investment.