The D&C is reporting that the service industry sector of our economy is slumping bad for the first time in five years. Here in Rochester, that industry makes up about 2/3 of our work force to the tune of some 350,000 workers. On the least-negative side of this news, since the housing slump has affected Rochester very little, it stands to reason that local service jobs like restaurant and other consumer service jobs are likely safe. But for those who work in tech support, outbound sales, and even web design (gulp), this is not welcome news.
Dean Baker, writing for TPM Media, gives us a glimpse of what a real recession might be. In the comments, someone also makes the additional point that this time around, it is the banks specifically that are taking the brunt of the damage. That means that the institutions that normally balance out recessions are in deep trouble, and so are we.
Sleep tight, kiddies:
In the event that the recession proves to be severe and looks more like the 1980-82 downturn, then we will be looking at an increase in the unemployment rate of almost three percentage points. The rise in the unemployment rate for blacks and teens will be close to five percentage points, and for black teens the increase will be nine percentage points. We still will not have recovered to current unemployment rates by the time of the next presidential election in 2012.
Paul B. Farrell introduces us to what he believes will be the positives of what may well be an inevitable recession. I’d say that, on balance, it’s an interesting set of ideas but probably reckless wishful thinking. There’s no doubt but that economic growth is entirely tied up with the political fortunes of our leadership (a concept hinted at in the article, though not directly expressed). I don’t doubt that all the cited benefits of recession would, in a perfect world, be excellent opportunities. We should probably use the impending recession to get our house in order, but do we really think that’s what’s going to happen?
Hardly. It’ll just be one more reason to “throw the bums out,” while we continue to pile up credit card debt like there’s nothing wrong with that.