Below is an excerpt from Karen Brune Mathis' story covering a presentation made by IBM's Chief Economist at JCCI on 8-18-2010. Check out the full article at Jacksonville's Financial News and Daily Record http://www.jaxdailyrecord.com/showstory.php?Story_id=531709
IBM Corp.’s chief economist predicts it will be 2013 to 2015 before unemployment, now around 10 percent, falls by half to what’s considered a healthy rate.
“My guess is it would be three to five years before we see unemployment getting back to 5 percent,” said Philip Swan, who has been with IBM for 36 years.
Job creation is the key to economic recovery, he said, because it influences consumer confidence.
That confidence has eroded since the recession began in December 2007 and has yet to be declared officially over.
In December 2007, unemployment was 5 percent and underemployment was 4 percent, totaling 9 percent.
Underemployment is the situation in which workers might be working part-time or less and want full-time or other more secure hours.
Now, national unemployment is 9.5 percent and underemployment is 7 percent, which totals 16.5 percent.
“We have never seen anything that dire,” he said.
Looking at the numbers of people affected, Swan said there are 7.4 million people unemployed and 5.6 million underemployed, leading to 13 million people who want secure employment.
Swan said the economy needed to generate 120,000 jobs a month merely to absorb new people entering the labor force. To start whittling down the unemployment rate, that growth needs to be 250,000 jobs monthly, he said.
Swan thinks the economy could reach that pace in five to six months.
If Phillip Swan is correct, it will take from three to five years for employment rates to return to pre-recession levels. It is also likely that many newly created jobs will be different from those that were lost and require workers with different skills. Thus, economic decision-makers in Northeast Florida should develop and implement a multi-year strategic plan for regional economic development. The region would be better served by adding jobs that have longevity and survive another economic downturn. Though it would be nice if lessons were learned during this recession, but that is wishful thinking. It is just a matter of time before another economic bubble develops and bursts. How the region fares during that downturn will be determined by the approach taken during this economic recovery.
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