1. Fragility of the 1990s Economic Gains William M. Rodgers III Rutgers University and National Poverty Center And Richard B. Freeman Harvard University and NBER March 2005

2. Introduction Characterization of the Jobs Recovery Why has the Recovery been so Weak? What have been Its Consequences? What does the Future Hold?

3. Characterization of Jobs Recovery: Cumulative Employment Growth During The Six Most Recent Recoveries Source: Nonfarm Payroll Establishment data. U.S. Department of Labor, Bureau of Labor Statistics (www.bls.gov). Each series is benchmarked to the start of itswww.bls.gov recovery as defined by the NBER Business Cycle Dating Committee. Figures are through the March 2005, the 41 st month of the current recovery..

4. Why has the Jobs Recovery been so Weak? It’s not productivity growth Less bang for the fiscal stimulus buck US performance in the international economy The impact of health care costs Fiscal Stimulus as a Percentage of GDP (Standardized-Budget Deficit/Surplus as % of GDP) Notes: *CBO Forecast for 2005 are from Table 1: Measures of the Federal Budget Surplus or Deficit, 2000 to 2005, The Cyclically Adjusted and Standardized Budget Measures: Updated Estimates, September 2004, Section 2 of 3.

5. Change in Male Employment-Population Ratios During the 1990s Boom, Recession and Recovery Episode Source: Table 3 of Rodgers and Freeman (2005). Expansion: 3/91 to 3/01; Recession: 3/01 to 11/01; and Recovery: 11/01 to 3/05. AdultsNew Entrants Out of School Youth

6. Change in Female Employment-Population Ratios During the 1990s Boom, Recession and Recovery Episode Source: Table 3 of Rodgers and Freeman (2005). Expansion: 3/91 to 3/01; Recession: 3/01 to 11/01; and Recovery: 11/01 to 3/05. Adults New Entrants Out of School Youth

7. Change in Male Hourly Wages During the 1990s Boom, Recession and Recovery Episode Source: Table 3 of Rodgers and Freeman (2005). Expansion: 3/91 to 3/01; Recession: 3/01 to 11/01; and Recovery: 11/01 to 3/05. Adults New EntrantsOut of School Youth

8. Change in Female Hourly Wages During the 1990s Boom, Recession and Recovery Episode Source: Table 3 of Rodgers and Freeman (2005). Expansion: 3/91 to 3/01; Recession: 3/01 to 11/01; and Recovery: 11/01 to 3/05. Adults New Entrants Out of School Youth

9. Conclusions to Date The 1990s gains appear to be fragile, especially employment. Recession and weak recovery have led to an erosion in the gains that African Americans and women, particularly the less skilled made during the 1990s.

10. What Does the Future Hold? Will tight labor markets of the 1990s return? It depends: –Fiscal and Monetary Policy –Globalization (FDI and Trade Deficit) –Health Care Costs –Industry Structural Change –Demographics What must we do to help vulnerable groups? Forecast of Employment-Population Ratios of Nonenrolled 16–24-Year-Olds

11. References “Blacks Need More than an Economic Boom,” in Real World Macro, 21 st Edition, Edited by Daniel Fireside, Dollars and Sense (Forthcoming, 2005). (www.heldrich.rutgers.edu) “What do the Future Labor Market Prospects of Non-college Educated Adults, Youth and Minorities look like?” in Extended Opportunities, Edited by Ronald Mincy, Columbia University and NPCL, (Forthcoming, Fall 2005). (www.heldrich.rutgers.edu) “Jobless Recovery: Whatever Happened to the Great American Jobs Machine?” Centre Piece Magazine, London, 9: 3, Autumn 2004, 22-27; New York Federal Reserve, Economic Policy Review, (Forthcoming, May 2005) (with Richard Freeman). “The Disparate Labor Market Impacts of Monetary Policy,” Journal of Policy Analysis and Management, 23: 4, 2004, 813-830; Labor History, 46: 1, 2005 (with Seth Carpenter). “The 1990s Economic Boom, another Period of Missed Opportunities,” Harvard Journal of African American Public Policy, 10: Summer, 2004.