As much as I wanted to continue where I left off and go into further detail comparing the 1983 recession to today’s recession, I didn’t have the time to research the data on employment. However, today MSN posted an article stating that jobless claims have fallen drastically to the lowest levels in quite some time. Of course, this seems to give hope that our economy is maybe in a recovery.
Do I think our economy is now recovering? It’s really too soon to say, in my opinion. I think it will be based on a state by state level and not so much a national level. For instance, the state of California was one of the hardest hit states due to the real restate bubble, yet Oregon’s unemployment rate is much higher than California’s. MSN often uses interactive maps, like these, to show a state by state comparison. It looks like many of the northern mid-western states are already in a recovery. This would make sense if we blame the real estate fiasco as the primary cause of this recession. Home prices didn’t sky rocket in states like South Dakota and Idaho as much as it did in other states, like California, Colorado, and New York.
These mid-western states may not have depended as much on construction as a primary source of employment the way Arizona and California did. Too many homes were being built with the anticipation of more and more people purchasing them. However, a year and a half ago I predicted that the home prices would have to fall. When new homes in a some-what crappy neighborhood were selling for $725,000, and yet they are only two feet apart from each other, it was a key indicator that the market was peaking. Now, I’m not a financial or real-estate analyst, I just retained my common sense during this snowball effect and made some predictions that happened to be accurate. Mostly, because I couldn’t purchase one of these $725,000 homes and couldn’t figure out who could. Not all Southern California residents are wealthy!
A week ago I read an MSN article comparing the job outlook of 1983 to today’s (I can’t find that article again, argh!), and the primary difference were the amount of workers in the work force. There are hundred’s of thousand’s more now than in 1983, and our workforce is also slightly older. I don’t recall what helped boost the economy in 1983, so I can’t say if it is something that will help our current economy. I do know that the federal stimulus is slowly creating more jobs, especially in construction. What I do know about any economy is that it’s better to be a diversified worker, meaning have multiple options incase hours are reduced or a job loss is impending. Being educated helps, especially if you look at this graph that I found while reading GetRichSlowly.org. I know that from my own personal experience, I’ve always been willing to work harder, change professions, or take on multiple jobs to make it through tough times. Being flexible helps during tight times!