What we are in for...

I saw a link to this news release from the Food Research and Action Center newsletter. The Center for Economic and Policy Research is from what I can tell is a socially active think tank, and they have issued a study that examines the impact of a potential recession on the U.S. economy. From the news release about the report:

Along with a sharp rise in unemployment, a recession in 2008 would eventually result in 4.7 to 10.4 million more men, women, and children living in poverty, at least 4.2 million people losing health-insurance coverage, and a drop in the inflation-adjusted median family income of between $2,000 and $3,700 per year. The estimated effects would extend as far as 2010 or 2011, depending on the severity of the downturn.
“For financial markets and employers recessions are fairly short-term events,” noted Schmitt. “For labor markets and workers, though, recessions have historically been long and painful.”
The report projects the likely effects of a recession in 2008 based on the experience of the last three recessions --the severe recession of the early 1980s, and the mild-to-moderate recessions of the early 1990s and the early 2000s.
If the experience of the last three recessions holds for the next economic downturn, the labor-market impacts would last far longer --three or four years-- than the formal recession itself, which would likely last six to 24 months.
"If our past experience of recessions repeats itself, we may well still be feeling the effects of a recession as we enter the presidential election cycle for 2012," said Schmitt.


TK: Here is the link to the pdf of the full 13-page report One thing is clear - we can't afford a severe recession. From the report:

A severe recession, along the lines of the early 1980s, would have far worse effects. The unemployment rate would likely increase to 8.4 percent, increasing the pool of unemployed by over 5.8 million workers. The economy would lose a total of 4.6 million jobs. The inflation-adjusted income of the typical family would fall almost $3,750 per year, and the number of Americans living in poverty would rise by 10.4 million. Again, racial minorities would bear a disproportionate share of the economic hardships. Blacks, for example, would account for 1.3 million of the total 5.8 million worker increase in unemployment. If the historical pattern repeats itself, the labor market would not likely begin to recover until 2011.