However, the way unemployment is currently distributed across the population makes me fear that, without some type of effective intervention, the new equilibrium unemployment rate will be higher than what we've seen in the past.
The share of unemployment that is long term (more than 27 weeks) is very high (almost half of the currently unemployed have been so for more than 27 weeks!), and the unemployment rate for uneducated workers aged 25 or greater is also very high (around 14% compared to around 5% for workers with at least a BA).
Long term unemployment always rises in recessions, but this case is exceptional as can be seen in the following graph (clik the pic for a more depressing image):
Today, Tyler links to an article where employers at a job fair are discouraging currently unemployed workers from filling out applications!
Here's a graph of unemployment broken out by education level (clik the pic for a more depressing image):
I know that I haven't shown that the long term unemployed and the low education unemployed are the same people, but I am pretty sure that at least a big chunk of them are, and it's a real problem because the obvious policy response would be to educate them and that is neither quick, easy, or cheap.
But the likely combination of persistent high unemployment and low earnings for folks with low education and America's increasingly dismal record of turning out quality high school graduates is truly distressing.
Hat tip to Calculated Risk for the excellent graphics.