Category: Employment and Unemployment Page 3 of 4
As for Romer, head of the Council of Economic advisors for Obama, and sidelined for her entire tenure, it’s ’bout time she quit. It’s one thing to trade your soul and reputation for power and access. It’s another thing to trade your soul for powerlessness.
Really nothing worth saying about the job numbers. They were to be expected. Obama decided to save his TARP slush fund for his own reelection. Too bad for Congressional Dems, but hey, they were complicit.
I’m not going to waste a lot of time on the job report, obviously a job report with 411,000 census jobs out of 431,000 total jobs is not, actually, a good one. Despite their spin, the Obama administration knows this. They will ram through the jobs bill and try and dump it into the economy as fast as possible. 200 billion is, actually, about as much as the real stimulus per year in the stimulus bill (the tax cuts had no effect on hiring because they went to rent seeking corporate profits). They will also seek to dump as much of the TARP slush fund as they can. The insiders seem to have finally realized that if they don’t get a real job recovery before the election, Obama could lose his Congressional working majority or maybe even his majority, and if that happens, the rest of his Presidency will be spent arguing over the equivalent of white stains on dresses.
Can they pull it off? Well, 200 billion plus another couple hundred billion from TARP is real money. On the other hand, they are adept at spending tons of money and getting very little for it, plus the Republicans will be as obstructionist as possible: they know that their election chances hang in the balance too. Add to that the stupidity of conservative Democrats, more concerned with deficits than jobs, and the situation is dicey, especially as Europe goes into hardcore Hooverism with austerity budget after austerity budget and China frets over a housing market which a Bank of China official noted is now further into bubble territory than the US’s was when it burst.
Hang on tight, folks, the economy is going to get a honking big syringe full of adrenaline at the same time as it’s strung out and another bunch of doctors are giving it a pile of benzies. Hope it can take it.
Um, dude, no, Boehner is right, and you’re wrong, when it comes to the real world (h/t Cujo)
That was odd, wasn’t it? The disconnect makes it seem as if GOP talking points are lacking in flexibility, unable to adapt to changing circumstances. When the economy was losing jobs every month, Boehner would say, “Where are the jobs?” Now that the economy has added more than 200,000 jobs in two consecutive months for the first time in four years, Boehner is still saying, “Where are the jobs?” It suggests the would-be Speaker isn’t paying attention to current events very well.
Ok, depending on how you count it, the economy needs to add about 140K to 150K jobs JUST to keep up with increases in the population. About 8.4 million jobs were lost in the last recession. At a rate of, say 250,000 jobs/month, it will take 7 years to both put everyone back to work, and to sop up population increases.
For people in the ordinary economy “where are the jobs?” is a perfectly valid question, and it is a perfectly valid election strategy, because even if the economy starts regularly producing jobs at over 300,000, when November rolls around, the vast majority of people who need a job, still won’t have one.
Here’s my prediction: as a percentage of population, employment will not recover before the next recession. 80%+ of all productivity increases will go to corporate profits, and wages will stagnate.
Boehner is right to ask “where are the jobs?” Both as a matter of fact, because there aren’t enough jobs, and as a matter of electoral strategy.
I’ve been predicting a spring hiring resurgence for some time, so the March figure of 162,000 new jobs isn’t a surprise. However, amidst all the hoopla I feel it is incumbent to point out that you need about 140,000 jobs a month just to keep up with population growth.
This isn’t a good job’s report. It’s just not a lousy one. It’s only slightly better than even. We need to see regular months over 400,000 before this economy will be good.
In the last recovery, the majority of gains went to corporate profits rather than wages. This will be even more true this time around.
As recoveries go this one is going to feel like landing in a pool of Dettol after skidding down a sandpaper slide.
Don Peck at the Atlantic has noticed that employment is unlikely to recover to pre-great recession levels (let alone Clintonian levels) for a long, long time. This was totally predictable, and predicted. He also notes that even people like Paul Krugman really have no idea how to fix it.
Yes. Employment as a percentage of the workforce will not recover for a generation. And my bet is that median real income won’t either.
As for how you fix it, first you need to have a model for why it happened in the first place. I’m not going to give that model today (read Wealth and Democracy, by Kevin Phillips, he has a big chunk of it). Instead I’m going to say what needs to be done.
Fixing America
Because any economic growth right now increases the prices of oil, which then strangles the economy, you must reduce dependence on oil, or you can’t fix your problems.
Because banks aren’t lending, and because they are a net drag on the economy having destroyed more wealth than they created, you must break up the major banks or take other similiar actions to the same ends, or you don’t fix your problems.
Because defense spending is essentially un-productive you must end the American empire, cutting “defense” spending by at least half, and “intelligence” spending by three-quarters, or you don’t fix America.
Because education is the backbone of modern economies and good education is what allows democracies to work, as the founders understood, you must fix education, so that everyone who is qualified can get a degree without being burdened by a decade of debt and so that the the lower class is able to get through university again, or you don’t fix your problems.
For the same reasons you must fix education at the primary and secondary levels by removing it from the property tax base, or you don’t fix your problems.
Because oligopolies strangle innovation, produce inferior services and soak up oligopoly profits they haven’t earned break up your major oligopolies outside the banks, starting with the telecom companies, or you don’t fix your problems.
Because government is now a bidding operation in which monied interests buy the policies that are good for them and not for America you must fix campaign finance, or you don’t fix your problems.
Because a lopsided wealth and income distribution leads to deep social pathologies, reduction in real demand, short term risk taking and looting by the financial class and the destruction of functional democracy you must reinstitute steep progressive taxes on the 1950’s level, or you don’t fix your problems.
Because locking up more people per capita than any other nation in the world is massively economically inefficient and causes severe social pathologies you must break up the prison-industrial complex, or you don’t fix your problems.
Because police states are not efficient, and for the sake of your own souls, you must end the drug war and the paramilitarization of US police forces, or you don’t fix your problems.
Because real modern infrastructure is one of the keystones to economic growth and competitiveness you must build out proper transportation (high speed rail) and internet (cheap, un-metered high speed to every home) or you don’t fix your problems.
Because intellectual property laws are strangling rather than aiding innovation and are locking culture beind walls, you must reform reform your intellectual property laws, or you don’t fix your problems.
Because the US can’t afford to be wasting 6% of GDP, not insuring many of its people and getting awful results even for the insured, you must move to a rational form of comprehensive insurance like single payer, or you don’t fix your problems.
Because the US and many other countries in the world cannot flourish in a world trade system which allows massive trade and money flow deficits, the world trade system, and most especially the free movement of money needs to be heavily reformed, starting with a Tobin/Pigou tax which scales the cost of currency changes to carbon output, or you don’t fix your problems.
And, sadly, this is a partial list.
Which is to say, the problem in the US right now is that virtually nothing of any significance works. Not the military, who with 50% of the world military budget is being fought to a draw by ragtag militias, not the political system, and definitely not the economic system.
Fixing this, fixing America, is a literally monumental task, like building pyramids. It will take a generation, perhaps two, of very committed people.
I fear that those people don’t exist in large enough numbers, at least not in any position of power or able to seize power.
I hope Americans prove me wrong.
Comparative downturns to Nov09 by Stirling Newberry
Only down 11,000 this month, which is both better than I expected, and better than anyone else as far as I know.
The average duration of unemployment moved up from 26.9 to 28.5 weeks, which is an all-time record. Headline unemployment dropped slightly to 10% even. The broader U-6 measure dropped from 17.5 to 17.2%. The labor force decreased by 98,000 people, which accounts for the drop in unemployment figures despite no net job gains.
Big winners were the general service sector (58k) and temporary help services (52.4K).Manufacturing dropped 41K and construction 27, both of which are slower rates of loss than typical in the past couple of years. Health care employment continued to increase, government was mixed.
As Stirling’s graph shows this is now the deepest job recession of the post WWII era.
The question now is what happens in the next three months. My default assumption has been a job recovery in the spring, I suspect whatever we see in December, January will be a net negative (due to layoffs after Christmas), so I will be most curious to see February’s numbers.
Note that because of population increases, to maintain the same percentage of the population employed requires about 93,000 jobs a month be created.