Jobs: More Action Needed

Job Numbers Hype: It's Bad Politics and Worse Policy

Richard Eskow — Fri, 03 Feb 2012 21:18:30 -0500

The reaction to January's jobs report shows how tragically our expectations have fallen, especially among some Democrats and their supporters. Their cheerleading isn't just bad policy or bad politics, although it is both of those things. It's also callous and insensitive to the misery of millions.

It's important to keep explaining what needs to be done to end that misery. To do otherwise is to serve, however unintentionally, an insidious agenda from the right that would lower our expectations until these tragic levels of unemployment are seen as the "new normal."

An increase in jobs is a good thing, of course, even if it's far from what's needed. Here's something else that was good about the report: Conservatives keep telling us that manufacturing jobs have moved offshore permanently, but 50,000 of them were created last month. Now we can put that argument to bed and can get to work creating more of them.

The Good, the Bad, and the Urgent

But millions of Americans - including minorities and the young - have already endured years of catastrophe, with years more to come if nothing is done. Why won't more people express support for their plight and explain what needs to be done to help them?

Here's the real story: Government intervention has created millions of jobs. But those interventions were too small, so we're still years away from fixing the problem. To claim anything else is to reinforce the delusions that created the problem in the first place.

If the President and his supporters make that case clearly and forcefully, the country will be able to choose between competing visions in November. It's more likely to choose an end its misery. The pitch is pretty simple, really: The medicine's working, but let's not stop before the patient gets well. And despite this month's report, the patient is still very, very sick.

Help is needed urgently.

The New Abnormal

At December's rate of job growth (200,000 jobs) we won't reach an acceptable level of employment until 2024. At this month's rate of growth (243,000 jobs) it will still take us until 2019. Even if we accelerated that rate of growth to 400,000 jobs per month, it would still take us until 2015 to get back to our customary and normal rate of employment.

There would be room for celebration - cautious celebration - if we were protected from more economic shocks, which could come at any time from our under-regulated and too-big-to-fail banks. But we're not. Or if the Republicans and 'centrist' Dems (including the President) weren't pushing to cut government jobs, which will slow the rate of growth even more. But they are. Or if the President were pushing for bigger initiatives, on the scale that's really needed, while making the case for the kind of short-term help we need to get this country on its feet again.

But he isn't.

The President's current jobs proposals would help somewhat, but they're still much too small. What's more, they're filled with policies that are too easy for Republicans to poke holes in. Unless he comes up with a bolder, simpler, and stronger plan, Republican rhetoric will regain a credibility it doesn't deserve - and the government solutions that have always worked in the past will be discredited through half-measures that fail to solve the problem.

If that happens, our abnormal level of pain really will become the "new normal."

Economic Apartheid

This month's reported unemployment level dropped to 8 percent for adult males. But women gained only 89,000 jobs, which is a little more than a third of the total. (They got 42 percent of the jobs in the private sector, but were heavily affected by government cutbacks brought on by misguided austerity thinking - thinking that the President has sometimes encouraged with his rhetoric.)

The seasonally adjusted white unemployment rate for January was 7.4 percent.

For young people 16-19, it was 23.1 percent.

For African Americans, it was 13.6 percent.

For young African Americans, it was 38.5 percent.

To be clear, all of those numbers have seen some reductions. But those who say the current pace of recovery is acceptable are also saying that a devastating job situation for young people, African Americans, and those who are both, is an acceptable state of affairs for years to come. That means untold harm to human wellbeing, career opportunities, future health, lifetime earnings, and entire communities across the country.

It also means endorsing a state of "economic apartheid" that's unlikely to change for the foreseeable future. That's not the kind of country that the Democrats or their supporters should be tacitly endorsing, even if only by failing to consider the long-term consequences of what's being done and said today.

And in an equally devastating finding, long-term unemployment figure was still 5.5 million. These Americans have been thrown from a life of earning and security into hopelessness and spiraling poverty - and they're being ignored.

Falling Behind

The numbers tell another story, too: People with jobs are falling behind. That's why the middle class really is in a process of slow decay. This chart tells the story:

After a period of long-term stagnation, wages only grew by 1.9 percent and there's no sign that will change. There are lots of working people who will find nothing to celebrate in this report.

Champagne Corks

Nevertheless, a number of Democrats and allies took a premature and ill-considered victory lap today. That won't help the country get the policies it needs, and it won't help them politically either. When sympathetic writers like the one quoted by Ezra Klein write of "champagne corks popping at the White House," the image seems inappropriate at best and Marie Antoinette-ish at worst.

The President, his party, and their allies need to send a clear message about these job numbers: that they disprove the conservative argument, but that whole segments of the population were left out of the good news and we're facing many years of pain and stagnation unless government steps up its efforts.

That means they must face facts and make the only argument that will resonate with the American people: That what President and his party have done has helped, but not nearly enough, and that what he is proposing will also help, but not nearly enough. His job creation proposals will be blocked by the Republicans either way, so why not use them to tell the American people what needs to be done?

The President has learned a lot, politically and economically, from the pressure he's received from the left. He's getting better at making the rhetorical case for economic justice. Now he needs to get better at losing, by losing Congressional battles with a set of solutions that the public will understand and support. It's incomprehensible that Republicans would oppose a jobs bill for veterans, but they will.

But it's equally incomprehensible that a Democratic President would offer small responses to such a large disaster. (I include the Jobs Act in the category of "small responses," since such a large chunk of it is dedicated to ineffectual tax cuts for business. But it would help.)

And it's a measure of our mad times that CNN is able to call the proposal for veterans' employment as "hefty" with a straight face. At these levels of unemployment, its estimated $5 billion price tag is almost homeopathically small.

Recovery Winter

Some people are talking about a "recovery winter," an ironic reference to the Administration's premature declaration of "recovery summer" in 2010. For too many Americans, "recovery winter" feels like more like nuclear winter.

The young people and minorities who weren't invited to the party last month can feel it. What's more, this good news could shift dramatically in coming months - if Europe collapses, if a major US bank goes down, or if the periodic recessionary cycle that's built into our under-regulated system strikes again this year.

Nevertheless, some liberals are celebrating. Ezra Klein waxes enthusiastic at the Washington Post, writing that the January report "is pretty much all good." C'mon, Ezra. All good? 23.1 percent for young people? More than 13 percent for African Americans and more than 38 percent for young African-Americans?

Klein is right when he says that revised figures for earlier periods "are positive,"at least where jobless figures are concerned. But adjusted population figures added 1.7 million people to the workforce, which means we need even more growth - and quickly. It means that overall labor force participation is at the unacceptably low level of 63.1 percent.

Klein correctly cites most other areas of concern, including lost public sector jobs and the gap between needed job growth and current figures. But he writes that " this isn’t just a good jobs report. It’s a recovery jobs report." He couldn't be more wrong, in my opinion - unless he's talking about a recovery in 2019.

And I hope Democrats don't listen when he calls these results "the sort of numbers that win elections." Current projections show unemployment rising to 9 percent again before November. This lagging recovery will give credibility to the President's opponents while discouraging his opponents, especially young people and minorities.

Steve Benen of the Maddow Blog understands what's going on behind the figures, yet still says "it's hard not to feel good about the surprising strength" of this report - a sentiment that few of the long-term unemployed would share. Jamelle Bouie of the American Prospect called the report "blockbuster" and said "the economy is looking good."

All this cheerleading feels more than a little unseemly in the face of so much misery - especially when the misery's likely to continue for years if more isn't done.

Some media types might want to be more cautious, too. A headline writer for McClatchy, which has often distinguished itself with terrific financial reporting, missed the mark by writing "January jobs report sizzles ..."

The body of McClatchy's article is much more accurate and objective, correctly noting that the figures were "better than expected" and quoting everyone from a market analyst who cheerleads the numbers for different reasons, to the President and House Speaker John Boehner. But the title's pure hype - unless they meant "sizzle" as in that old expression about "separating the sizzle from the steak."

The Balance

It's time for Dems and their allies to stop partying like it's 2019.

It's not hard to strike the right balance between encouragement and admonition. Alan Krueger, Chairman of the President's Council of Economic Advisors, came close. “It is critical that we continue the economic policies that are helping us to dig our way out of the deep hole that was caused by the recession that began at the end of 2007,” wrote Krueger, who called the report "an encouraging sign."

“Nonetheless," Krueger added, "we need faster growth to put more Americans back to work.”

That wasn't hard. Jared Bernstein struck the right balance, too, calling on Congress to "seal the deal" and saying "let's not screw this up." (Although I wish he had explained what a full recovery plan could do.)

The Republicans struggled to respond today."These numbers are encouraging," said Eric Cantor, "especially for those millions of Americans out of work, but we should aim even higher.”

Great, the President should say. I'll take you up on that.

The Message

The right message is clean and simple:

1. What we did worked. But we need to do more of it.
2. So let's stop the bleeding of public jobs. We've seen the damage that's caused in Europe and we don't want that here.
3. The deficit is a legitimate concern - after we address today's crisis with "the fierce urgency of now."
4. The best way to cut deficits in the long term is to put Americans back to work so they can pay their taxes and buy things that create even more jobs.
5. We tried to compromise with our opponents, because we thought they'd be reasonable. They weren't.
5. So here's what it takes to get that done, with no games or pretense. Let's go to work, and if the Republicans won't help, please vote for people who will.

See? The right message is simple, clean, honest, and easy to deliver. It's cheap, too: No champagne corks necessary.

Republicans vs. Obama on Jobs Records

Charles McMillion — Fri, 03 Feb 2012 15:03:46 -0500

Along with squandering a federal budget surplus, getting us mired in two “wars” and devastating the net worth of most Americans, today’s revised jobs data show a net loss of 646,000 private sector jobs during the eight Bush/Cheney Republican presidential years—and only 1,466,000 private sector net jobs were created during G.H.W. Bush’s four years.

That is, a net of only 820,000 private sector jobs were created over the 12 most recent years of Republican Presidents.

In the first month of Obama’s Presidency another 725,000 private sector jobs were lost. A total of 3,348,000 private sector jobs were lost in Obama’s first six months of trying to get a handle on the economic disaster the Republicans created.

Nonetheless, even including the jobs lost in Obama’s first six months, today’s Bureau of Labor Statistics data show the last 23 consecutive months of private sector job creation restored all but 549,000 of the private sector jobs that existed when Obama was sworn into office.

Obama’s first three-year job record is already better—less awful—than the eight-year Republican record of President George W. Bush.

If January’s strong 257,000-per-month private sector job growth were to continue, the Obama administration would show overall net private sector job growth by April. This seems unlikely but it does seem very likely there will be net private sector job growth by June and at least one million net private sector jobs created by the end of his first term.

Clearly this four-year result for the Obama team is grossly inadequate – held back by partisan Republican obstruction, among other things – but it is now almost certain that more private sector jobs will be created in Obama’s first term than in the past THREE terms of Republican presidents.

If Republicans want to make this an election about the jobs record under Obama, Democrats should encourage them to bring it on.

Jobs Report: Progress, But Don't Break Out The Bubbly

Isaiah J. Poole — Fri, 03 Feb 2012 09:40:44 -0500

President Obama today will go to a fire house in the Virginia suburbs of Washington to tout his plan to promote hiring of veterans as first responders. It's a program that is sorely needed to address an American travesty: One out of every eight of the veterans returning from Iraq and Afghanistan are out of a job.

But as today's unemployment report from the Bureau of Labor Statistics shows, the economy could still use a job corps for the rest of us as well.

The news is good: 243,000 jobs were produced in January, and the unemployment rate went down to 8.3 percent. That includes 257,000 in private sector jobs, offset by a loss of 11,000 local government jobs and 6,000 federal government jobs. With that report, the economy has seen under President Obama's watch 10 quarters of economic growth and five quarters of jobs growth. The report shows growth across the private economy, notably in manufacturing and construction.

But, as Campaign for America's Future co-director Robert L. Borosage said in a statement this morning, "don’t break out the bubbly. Any celebration should stay sober."

"The U.S. economy is still slogging slowly against fierce headwinds. We are still 6 million jobs short of where we were when the Great Recession began. There are still 21 million people in need of full-time work. There are still more than four people lining up for every available job.

“Federal Reserve Chair Ben Bernanke stated the simple reality: `We still have a long way to go before the labor market can be said to be operating normally. Particularly troubling is the unusually high level of long-term unemployment.’ Nearly one-third of the unemployed have been out of work for a year or more. These are the true casualties of Wall Street’s excesses.

“American companies are producing more now than they did before the collapse. But Americans aren’t sharing in the rewards. Profits margins are at record heights; CEO salaries have soared, but there is no recovery in jobs, and wages and benefits continue to fall behind.

“Austerity continues to impede the recovery. Government employment was flat last month, but state and local governments project more cuts. Austerity in Europe is driving the EU and the United Kingdom into recession. U.S. exports will suffer accordingly, even without a Greek default or a financial calamity. U.S. government spending will be constricted by the budget deals."

As we reported last month, the economy needs to be creating more than 400,000 jobs a month for the next three years in order to repair the damage done by the 2008 economic crash. By that measure, we're already 157,000 jobs behind where we need to be this year.

The Congressional Budget Office warned this week that if Congress and the White House does nothing the economy will continue to creep and the unemployment rate will go up above 9 percent in 2013, before it finally slides downward.

White House officials have expressed annoyance with the CBO projections, but they are also assuring progressive activists that they will over the next few weeks continue to press the proposals in last year's American Jobs Act, including aid to state and local government to support schools and local police and fire departments.

We remain critical of the scope of the administration's proposals. But they would at least move the nation forward in providing some meaningful relief to the nation's unemployed. Conservatives in Congress, on the other hand, remain determined to take actions that will move the nation backward.

The latest example is a transportation bill moving toward the floor of the House of Representatives that Transportation Secretary Ray LaHood, a Republican who used to serve on the House Transportation and Infrastructure Committee, told Politico is "the worst transportation bill I’ve ever seen during 35 years of public service."

The proposal is just $260 billion over five years; by comparison, the last full transportation bill passed by Congress, signed by President Bush in August 2005, was $286 billion for a period that would end in September 2009, and most transportation experts, including those at the Chamber of Commerce, believed that level of spending was grossly inadequate.

But worse, the bill is stuffed with poison pills, such as oil drilling in the Arctic National Wildlife Reserve and forced approval of the Keystone XL pipeline, designed to appease the oil industry and anger moderate and progressive constituencies that normally would rally around a transportation and infrastructure bill. Meanwhile, it cuts funding for high-speed rail, transportation safety for school children and, if House Speaker John Boehner has its way, public transit.

Even with that, the Club for Growth is urging House members to vote against the legislation because they deem even a meager $260 billion as too much to spend to make sure that the country can move its goods, services and people efficiently.

That is madness at a time when we need to prepare our transportation networks for future growth, and at a time when we have 13 million people out of work. One way that President Obama could respond to today's unemployment report is to tell Congress to pass a real transportation bill that would put Americans back to work quickly, and reject the kowtowing to Big Oil that conservatives have inserted into this bill.

Yes to a job corps for veterans, but don't stop there.

We Still Need Stronger Steps To Create Jobs

Roger Hickey — Fri, 06 Jan 2012 11:57:54 -0500

Today's report of 200,000 jobs created in December means that the economy is barely growing at the rate needed to keep up with the growth of the labor force. Economists estimate that the U.S. will have to create more than 350,000 jobs per month – for the next three years – to get the unemployment rate down to 6 percent.The fact that the unemployment rate has declined to 8.5 percent has got to mean that many more people have become so discouraged that they stopped looking for work (and thus are not counted as part of the labor force).

The U.S. economy needs 4 percent to 5 percent growth to replace the 5.2 million jobs lost since 2007 and to keep up with new people who need jobs. But most forecasters predict that our economy will be lucky to grow at a 2 to 3 percent rate this year.

Clearly, if we don’t want to stay stuck at high levels of unemployment – and the growing inequality that comes with stagnant growth -- our government needs to take stronger steps to create jobs. Instead, Republicans in the Congress are still threatening to remove stimulus from the economy by blocking extension of unemployment benefits and continuation of President Obama’s middle-class tax cuts. Today’s report will add public pressure on Republicans to renew those policies before the two-month temporary extension expires next month.

But we have to do much more than continuing last year’s modest stimulus. Americans need to pressure their representatives to take advantage of record low interest rates to invest in public infrastructure, energy conservation and renewables, and education. These are investments our economy needs to make anyway – and if we make them now, we can create enough jobs to escape today’s way-too-modest levels of growth and move our country to full employment.

While the number of private sector jobs continues to grow, government employment, driven by state and local layoffs, declined by 12,000 in December. If the Federal government had continued the original Obama policy of financial aid to the states to keep those public servants employed, private sector firms could have benefited from the paychecks and economic demand of those public workers, leading to more private investment and job growth. Instead, layoffs of local government workers hurt overall growth.

In summary, today’s jobs report shows that our economy continues to struggle to create jobs. After more than two years of official `recovery,’ we are still not growing fast enough to make significant dents in the unemployment rate (and much of this month’s decline comes from discouraged workers giving up on their job search).

The good news is that job creation is positive, but as Europe imposes job-killing austerity and the world economy teeters on the edge of a new recession, Americans cannot allow conservative politicians to cripple the economy by slashing public spending. We will be pushing Republicans to renew unemployment insurance and middle class tax cuts. However, Americans—who all the polls show want to get beyond today’s status quo—will also be pressing politicians of both parties to put forward plans for investment and economic growth that can revive the American Dream of full employment and economic mobility.

Jobs Report: Dodging the Right-Wing Austerity Bullet

Isaiah J. Poole — Fri, 06 Jan 2012 08:53:36 -0500

It may not feel like it, but we dodged a bullet in 2011 when it came to unemployment.

Today's report from the Bureau of Labor Statistics shows that the economy created 200,000 jobs in the month of December, bringing the annual net total to 1.6 million new jobs for the year. The private sector created 212,000 jobs in December, meaning there were 1.8 million more private sector jobs in December than there were at the beginning of the year.

The unemployment rate is now 8.5 percent, down from 9.4 percent in December 2010.

The bullet the nation dodged was the one that congressional conservatives aimed at the heart of the economy in the early months of 2011. A budget plan passed by House Republicans early in 2011 would have slashed close to a million jobs off the total had it gone into full effect, the Economic Policy Institute estimated last February.

A plan by the ultra-conservative Republican Study Group, which is packed with Tea-Party purists, would have been even more damaging. Its "cut, cap and balance" plan, which demanded $380 billion in budget cuts in fiscal 2012 alone, "would all but guarantee a double-dip recession," Andrew Fieldhouse at EPI wrote, surely nullifying the job gains we've been able to experience this year.

Of course, the conservative argument is that cutting government spending is essential to allowing private sector growth. But that is simply false, especially in today's economy. There is no rational argument that government spending is "crowding out" the private sector; the evidence lies in borrowing costs, which are at record lows for both government and the private sector. Liquidity is not the problem. The problem is a lack of demand in an economy in which, even with today's jobs numbers, has more than 13 million people unemployed and another 8 million people working part-time when they want full-time work.

It's worth looking at how the austerity economics that Republicans wanted to impose here in the U.S. continues to play out in Europe, where the conservative budget-cutters, egged on by the international bankster class, are seeing their supply-side fantasies turn into an unfolding catastrophe. Despite the wave of spending cuts and budget-balancing in the Euro zone countries, economists for major international banks are at least courting the likelihood of a double-dip recession in Europe this year.

It's also worth looking back to the same period under President George W. Bush. The truth is that the nation right now under President Obama is experiencing an economic recovery that is substantially more robust than the one experienced under Bush at the same time in his presidency.

President Bush's first year in office featured a recession and the attack of 9/11; he responded in 2001 with his first series of tax cuts. Starting from the beginning of the second year of his presidency through the end of the third year, however, there had been a net loss of 321,000 jobs. President Obama's first year was dominated by the ripple effects of the financial crash, with the economy hemorrhaging hundreds of thousands of jobs a month for most of the first year of his presidency. But in the second and third years of his presidency, aided in part by the stimulus spending he signed into low in 2009, a slow recovery began to develop, resulting in a net increase of more than 2.5 million jobs in that period.

To be sure, that is not a job performance to pop champagne corks over. The impact of the Wall Street meltdown erased about 8 million jobs from the economy. To repair the damage to the job market and accommodate new would-be entrants to the job market, the economy would need to be creating an average of 400,000 jobs a month for the next three years. The economy only averaged about a third of that in 2011.

It did not have to end this way. Congress could have enacted legislation similar to the Local Jobs for America Act, or the more recently introduced Restore the American Dream for the 99 Percent Act. The latter legislation would have created as many as 5 million jobs over two years, making a substantial dent in our jobs deficit. At the very least, the aid to state and local governments proposed in the Local Jobs for America Act and similar bills sent to Congress by the Obama administration would have stanched the bleeding of public service jobs caused by state and local government budget-cutting. Since January 2009, as anti-tax conservatives took control of more statehouses, state and local governments have shed more than 600,000 jobs. (Another 14,000 jobs were cut by local governments in December.) The ripple effects of those job losses have put thousands more out of work in the private sector.

The fact that we have not had more robust jobs performance in 2011 can be laid almost completely at the feet of the conservatives in Congress. They were the ones who at the beginning of President Obama's presidency created a climate hostile to the scale of recovery program that was actually needed to fill a $2 trillion hole blown into the economy by the financial crisis. It was they who insisted that nearly half of the Recovery Act program that was passed by Congress be diverted into tax cuts that were demonstrably less effective in stimulating the economy than direct spending would have been. It was they who then obstructed every effort by the White House and members of Congress to enact legislation that would complete the work the Recovery Act left undone.

There will be the usual statements today and on the campaign trail about President Obama's allegedly failed record on jobs. We've been critical of President Obama as well, wishing he had showed his "we can't wait" assertiveness much earlier. But the real economic failure of 2011 is the conservative austerity agenda that is acting as a shackle around the leg of an economy that would otherwise be sprinting instead of limping.