It’s worth noting, as Matt Yglesias points out here, that long-term unemployment was a major structural problem after the Great Depression too. But as this old essay by Richard Jensen suggests, it took World War II to finally solve the problem: “The war, by removing millions of prime men from the labor market, by restructuring the work process, by subsidizing wages, and by massive retraining, finally gave the private sector the methods and the incentives to rehire the hard-core.”
That’s not really an option today, but it underscores a bleak fact about the recession. When the labor market stays weak for years on end, the damage becomes long-lasting — and extremely difficult to reverse.