DAVOS/SWITZERLAND, JAN 2010 - Martin Wolf, Associate Editor and Chief Economics Commentator, Financial Times, UK; Global Agenda Council on Systemic Financial Risk, Yoshito Sengoku, Minister for National Policy, Cabinet Office of Japan, Japan, Montek S. Ahluwalia, Deputy Chairman, Planning Commission, India, Zhu Min, Deputy Governor of the People's Bank of China, People's Republic of China; Global Agenda Council on the International Monetary System, Dominique Strauss-Kahn, Managing Director, International Monetary Fund (IMF), Washington DC, Christine Lagarde, Minister of Economy, Industry and Employment of France; Lawrence H. Summers, Director, National Economic Council (NEC), Executive Office of the President, US and Josef Ackermann, Chairman of the Management Board and the Group Executive Committee, Deutsche Bank, Germany; are captured during the session 'Global Economic Outlook' at the Annual Meeting 2010 of the World Economic Forum in Davos, Switzerland, January 30, 2010. © World Economic Forum swiss-image.ch/Photo by Sebastian Derungs

US senators return to Washington today after a brief recess and they will consider a jobs bill providing for $15bn of job incentives as millions face years on unemployment rolls. High unemployment is likely to warp American politics, culture, and the character of the society for years to come, according to a report in Atlantic magazine.

In the State of the Union address last month, President Obama called for a broad range of measures similar to $150bn package passed by the House of Representatives late last year. The Senate bill has been vastly trimmed down and would allow companies to avoid payroll taxes on every worker they hire who has been unemployed for at least 60 days, as well as provided with a $1,000 tax credit for new employees they keep more than a year. It's estimated if passed, the measure will generate 250,000 new jobs.

The US has lost 8.4 million jobs since the recession began in December 2007 when the official unemployment rate was 5.0%. Last month, the broad measure of unemployment was 16.5% - - 25 million people --  and included persons marginally attached to the labour force who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months; discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work; persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule.

In January, the official number of unemployed persons decreased to 14.8 million, and the unemployment rate fell by 0.3 percentage point to 9.7 percent.

The number of long-term unemployed (those jobless for 27 weeks and over) continued to trend up in January, reaching 6.3 million. Since the start of the recession in December 2007, the number of longterm unemployed has risen by 5.0 million.

The economy needs 100,000 new jobs a month just to absorb entrants to the labour force and the White House is forecasting average monthly growth in the rest of the year at 95,000. With more than 15 million people officially jobless, even a strong recovery is expected to leave an enormous number out of work for years.

Returning to pre-recession employment levels and keeping up with working-age population growth will require the creation of 10 million or more jobs.

The New York Times reports that during periods of American economic expansion in the 1950s, ’60s and ’70s, the number of private-sector jobs increased about 3.5 percent a year, according to an analysis of Labor Department data by Lakshman Achuthan, managing director of the Economic Cycle Research Institute, a research firm. During expansions in the 1980s and ’90s, jobs grew just 2.4 percent annually. And during the last decade, job growth fell to 0.9 percent annually.

Before 1990, it took an average of 21 months for the economy to regain the jobs shed during a recession, according to an analysis of Labor Department data by the National Employment Law Project and the Economic Policy Institute, a labour-oriented research group in Washington.

After the recessions in 1990 and in 2001, 31 and 46 months passed before employment returned to its previous peaks. The economy was growing, but companies remained conservative in their hiring.

Some 34 million people were hired into new and existing private-sector jobs in 2000, at the tail end of an expansion, according to Labor Department data. A year later, in the midst of recession, hiring had fallen off to 31.6 million. And as late as 2003, with the economy again growing, hiring in the private sector continued to slip, to 29.8 million.

The Times also reports that on average, only two-thirds of unemployed people received state-provided unemployment checks last year, according to the Labor Department. The rest either exhausted their benefits, fell short of requirements or did not apply.

BusinessWeekmagazine reported last month on the rise of the "disposable worker" i.e temps in  line with Japan where more than a third of the workforce have few rights and work at less than Ireland's minimum wage of $12.50 per hour.

The Atlantic says the Great Recession may be over, but this era of high joblessness is probably just beginning. Before it ends, it will likely change the life course and character of a generation of young adults. It will leave an indelible imprint on many blue-collar men. It could cripple marriage as an institution in many communities. It may already be plunging many inner cities into a despair not seen for decades. Ultimately, it is likely to warp American politics, culture, and the character of the society for years to come.

The magazine says unemployment rate hit 10 percent in October, and there are good reasons to believe that by 2011, 2012, even 2014, it will have declined only a little. Late last year, the average duration of unemployment surpassed six months, the first time that has happened since 1948, when the Bureau of Labor Statistics began tracking that number. As of this writing, for every open job in the U.S., six people are actively looking for work.

Last month,  Lawrence Summers, President Obama’s principal economic adviser, said at the World Economic Forum in Davos, Switzerland, that "what we are seeing in the US and perhaps in other places, is a statistical recovery and a human recession." In his view, the combination of high unemployment with "mercantilist policies" (i.e. China's currency peg to the US dollar) in parts of the world makes it hard to defend liberal trade politically or perhaps even intellectually. Unless the recovery proves far stronger than expected,"high unemployment will persist in western countries, with all the political dangers it brings."

Summers also said: "What is disturbing is the level of [US] unemployment. This is not just a cyclical – though it is heavily a cyclical phenomenon – but a structural phenomenon as well. Just to put it in a way it’s not usually put, one in five men in the United States between the ages of 25 and 54 is not working right now. A reasonable extrapolation would be that following a reasonable recovery, it will still be one in seven, or one in eight, who are not working. That is in contrast to the mid-1960s, when 95 percent of men between 25 and 54 were working. "

On the same panel, Zhu Min, Deputy Governor of the People's Bank of China, said: "China is a developing country and also a big country and the stability is very important there. There are 1.3 trillion people, people need a job. 70 percent of GDP are services we trade. A stable exchange rate, I think, when a crisis comes in, is good for China, also for the world, as I said, and when our neighbour or the other currency depreciates 30 percent, we didn’t do it. When they appreciate another 25 percent, we didn’t do it. This is the path in China, it’s a similar package. We stick with the Pittsburgh G-20 meeting; the Pittsburgh G-20 meeting says the global should coordinate with excess strategy. If the global isn’t ready to do the excess strategy, China is ready, and including various things, so the liquidity issues, exchange-rate issues and all those issues."

Zhu Min presumably meant 1.3 billion people.

Every country needs jobs to ensure stability and that is the political challenge not only in China and the US but in Ireland and elsewhere.