I woke up this morning, turned on my computer and saw the headline: “Unemployment rate falls from 9% to 8.6%.” I thought, “Wow! – the economy added over 600,000 jobs.” After all the total US labor force is a bit larger than 150 million so every 0.1% of that is 150,000 jobs. Thus an improvement of 0.4% in unemployment rate would represent at least 600,000 jobs.
I looked again – oops, no, the economy didn’t create 600,000 jobs in November. At best it only created about 120,000 jobs. So why did the unemployment rate decline by 0.4%? The most striking number in today’s BLS Employment Situation Report is the number of people who dropped out of the labor force between October and November: more than 300,000. In fact, we have fewer people at work than we did 5 years ago – 6 million fewer jobs than in Nov of 2006. We are half way through our own lost decade. The reality is that our job creation numbers need to be, at a minimum, double those that we saw today to significantly eat into the nearly 14 million unemployed and the more than 8 million underemployed.
And our elected leaders don’t care.
How much do they not care? So much so that they are acting to cut jobs rather than to grow the economy and add jobs. By brutally cutting spending for education, health and social services, elected leaders in states such as WI and OH are costing us jobs. By refusing to move forward on job creation programs, even the very modest one proposed by Pres. Obama, much less Rep. John Conyers 21st Century Humphrey-Hawkins Full Employment and Training Act, Congress is costing us jobs. And, of course, failure to approve an extension of unemployment benefits will cost us more jobs. The unemployed spend all of almost all of their current income – and when they do, it puts other people to work. Yes, the unemployed are part of the “jobs creators” so beloved by D.C. pundits and political leaders. But they cannot create jobs if they have no money to spend; and if they have less money to spend they will create fewer jobs.
So Occupy the Capitol is very important. But before people go, I want to say a little more about what is and is not happening on the jobs front. While the private sector is adding jobs at an abysmally low rate, the actions of our elected leaders are costing us jobs in the public sector. Employment in state and local governments continues to fall – and these job cuts are now likely to increasingly extend to the federal level. Cuts to public sector employment do not impact all segments of the labor force equally. They are especially hard on women and African-Americans. In the past few decades both of these groups have found good jobs in public service, jobs that supported themselves and their families and that provided important public goods to all of us. What is happening here? Today’s report headlines a decline in the unemployment rate – but there are actually fewer women with jobs in November than in October – because public sector layoffs continued. And there are fewer of our African American brothers and sisters with jobs in November than there were in October – or in September.
And then we must recognize another cost to our unacceptably high unemployment levels. A report out of Rutgers University today estimates that less than 1 in 10 of those who lost jobs during this Long Depression have returned to or bettered their previous income levels. For most, their lives have been fundamentally altered – for the worse. And this in the wealthiest society in the world – but, of course, one where that wealth is radically unequal in its distribution. So let’s Occupy the Capitol until our elected leaders recognize the real deficit we face, the jobs deficit that is wasting the talents and skills of too many of our people and is taking us as a society far away from what we could – and should – be.
Dr. William Barclay