Job losses in the Great Recession vs. in the Great Depression

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Okay, now I remember why I don’t do this every month. It took me a while:

recessdepress06-09aThe measure of job losses in this chart is an attempt to adjust for the fact that the only good payroll employment numbers we have are for non-farm jobs, and in the 1930s a much higher percentage of Americans were still working on the farm. To quote from an earlier post:

Sebastian Dartevelle, a scientist at Los Alamos National Laboratory and an occasional reader of this blog, devised a simple way to correct that: He came up with rough estimates of the total number of people who could work in 1929 (those 14 and older) and in 2007 (those 16 and over), and divided the change in nonfarm employment in each downturn by the appropriate labor-force number.

This still isn’t a perfect measure. In fact, it overstates the severity of job losses in the current recession vs. those in the depression (because it assumes that no farmworkers lost their jobs in the 1930s). But it’s better than anything else I’ve been able to come up with. And if you choose as your start date not the month of peak employment, but the month when financial markets panicked (October 1929 and October 2008, which is handy because the data aren’t seasonally adjusted and starting at the same time of year makes for more of an apples-to-apples comparison) the lines move alarmingly close together:

recessdepress06-09b

In the Great Depression, the job losses kept coming and coming, eventually peaking at more than 12% of the “labor-able” population in March 1933. So things would have to keep getting worse and worse for a couple more years for this downturn to be truly comparable. But the pace so far really isn’t all that different.