Institute for Research on Labor and Employment

The only measure that has not surpassed levels experienced in the 1981/82 recession (previously the worst since the Great Depression) is the overall unemployment rate. While unemployment at that time peaked at 10.8% as opposed to 10.2% today, the current situation is actually much worse. This becomes clear when we look at unemployment across education levels. People are more educated today than they were in 1981/82. For instance, there are many more college graduates and fewer high school dropouts today than there were previously. In both recessions, the unemployment rate for highly educated workers is lower than for less educated workers. If the population today had the same (lower) level of education as it had in 1981/82, the unemployment rate today would more closely reflect the higher rate for workers with less education and would be substantially higher than 10.8%.

Apart from the unemployment rate, there are many other dimensions that point to the severity of the current recession as compared to the 1981/82 recession. In the 1981/82 recession, 3% of payroll jobs were lost between the start of the recession and its peak. Currently, 6% of payroll jobs have been lost and the losses are still continuing. In the 1981/82 recession, by 23 months from the start of the recession, there had been great employment gains. More than half of the jobs lost during the recession were regained by this point. We are 23 months into the current recession and have not yet begun to increase employment.