Indefinitely? No. But for a long time? Yes.
From 2008 to 2009, 5.5 million Americans lost their employment. This is the largest one-year loss of employment in the U.S. since 1945, when 1.1 million people lost their jobs after demobilization. The third largest loss was in 1992, when 1 million people lost their employment. So, the current situation is five times worse (employment-wise) than any other economic downturn in the U.S. since 1940. In other words, this is a serious break from past trends.
To fix the current situation in 2010, it seems that the U.S. would need to employ these 5.5 million people by the end of the year. But it's worse than that.
Over the last 10 years, the non-institutionalized civilian population age 16 or older (i.e., people available to work in the civilian labor force) has increased about 1.1 percent per year. This means that, each year, there are more and more people who need jobs. Even if the number of employed workers remained constant year-to-year, the unemployment rate would increase because of these new workers being added to the labor force.
And it's worse than that. In 2000, the labor force participation rate (i.e. the percentage of the non-institutionalized civilian population age 16 or older who were actually working or available to work) was 67.1 percent, one of the highest labor force participation rates since 1940. In 2009, it was 65.4 percent, the lowest rate since 1986. This is partly to do with changing demographics, but has more to do with work availability. Remember, if your not employed or "actively seeking employment" the you're not considered to be part of the labor force.
From 2000 to 2009, the average labor force participation rate was about 66.2 percent. If we assume that part of the reason for 2009's lower 65.4 percent rate is discouraged workers (people who would be in the labor force if they had any hope of finding employment), then we should assume that the "true" participation rate in 2009 should be higher. In 2008 it was 66.0 percent, so let's use that.
In 2009, there were 14.3 million unemployed persons in the U.S., up from 8.9 million the year before. This translated into an unemployment rate of 9.3 percent in 2009, up from 5.8 percent the year before (which was up from 4.6 percent in 2007). Note that, if the labor force participation rate in 2009 was the same as in 2008, the 2009 unemployment rate would have been 10.1 percent. But, those 1.5 million discouraged workers kept the rate down.
So, to get back up to a 66 percent labor force participation rate (to bring discouraged workers back into the labor force) AND to bring the unemployment rate back down to the 2008 level, we will need 8.3 million more employed people by the end of 2010, because:
- The the non-institutionalized civilian population age 16 or older will have increased by 2.6 million people from 2009 to 2010, of which 66 percent (over 1.7 million) will need to be considered part of the labor force.
- About 1.7 million of these people will need to be employed to achieve a 5.8 percent unemployment rate for these new workers.
- About 1.4 million existing "discouraged workers" will need to be employed who are now unemployed (out of almost 1.5 million total).
- About 5.3 million persons who were newly unemployed in 2009 will need to be employed.
- This will require the addition of more than 8.3 million jobs, as some people have more than one job.
So, if the economy creates more than 8.3 million jobs between 2009 and 2010, and the 8.3 million people who needs these jobs are gainfully employed, then we can talk about returning the unemployment insurance system to its normal operating state. By the way, the largest single year-to-year increase in employment since 1940 occurred in 1984, when 4.2 million more people were employed than in the previous year. The U.S. would need to almost double that increase today to bring the economy back into balance. If we don't, then we will have over 1.7 million more new people to employ in 2011, in addition to the 1.7 million new people from 2010, and in addition to whoever is still unemployed from 2009.
I think we have a lot of work to do on the economy before we can talk about throwing people out in the cold by taking away their unemployment compensation.
Now, if you want to talk about reinstituting some sort of Civilian Conservation Corps to get people on public assistance working at something worthwhile, I'm all ears.