Gary Burtless of Brookings takes his best shot at guesstimating when the US will return to full employment, given the recent pace of job creation. But you can’t just duplicate 2007 employment rates because of demographics changes. As Burtless explains:
The age groups that have become more important since 2007 tend to have lower employment rates than the age groups that have shrunk in relative size. … In 2007 the percentage of the adult population that held a job was 63%. Shifts in the age distribution which gave us an older population have reduced the expected employment rate by about 1.3 or 1.4 percentage points. Thus, even if the United States had maintained an unchanging employment rate within every age group, we should expect that the adult employment rate would have dropped to about 61.6% by the second quarter of 2013. The actual employment rate in the spring quarter was only 58.6%, or 3.0 percentage points below the employment rate we would have expected if 2007 labor market conditions persisted through 2013.
And that 3-percentage-point deficit translates into a shortfall of about 7.4 million employed people. So as Brookings figures it, the jobs gap is between 7 and 8 million jobs. And since you need 80,000 jobs a month just to keep up with the expanded working age population, creating 160,000 jobs a month — as we have the past few years — means it would take until about 2021 to return to “full employment.” But maybe job creation will accelerate. Then again, maybe another recession.