This time last year, when the Bureau of Labor Statistics released the last of the 2011 jobs report, CPEG warned that the slight improvement in December 2011 was still so inadequate that it would take six years to reach 2007 levels of employment. Now the BLS has released numbers for December 2012, and we have a sense of déjà vu as we note that the average monthly employment growth in 2012 is the same as that in 2011—about 153,000 per month. December’s employment growth missed expectations—ADP’s showed 215,000 new jobs in December. The economy added 155,000 jobs, leaving the unemployment rate unmoved since September at 7.8%. One year later, we are now five years away, if we continue at this rate of reducing unemployment, from pre-recession level of unemployment.
While disheartening, the stubborn unemployment situation should not be surprising. The mere passing of time will not reverse the crisis that continues to affect 12.1 million U.S. workers, including 4.8 million who have been unemployed for 27 weeks or more. Since the election, our elected leaders have been preoccupied with the so-called ‘fiscal cliff’ and the perceived urgency to address the nation’s long-term debt problem. As CPEG has noted here, the ‘fiscal cliff’ debate was misguided from the start and the budget deficit has received far more attention than it deserves while we continue to neglect the jobs deficit, which remains a genuine crisis. Having done nothing to address this crisis, it is frustrating but inevitable that the end of year employment situation remains grim.
It is worth noting that for some workers the situation is not stuck in a bad place but actually worsening. The unemployment rate for both women and African American workers increased in December. For women the unemployment rate increased from 7.0% in November to 7.3% in December. For African American workers unemployment rose from 13.2% to 14.0%. Women and African Americans have already been disproportionately affected by the cuts to public sector employment during this recession, and there is no sign of commitment to job creation through the public sector at this time.
The labor force participation rate for African Americans spiked in October, only to fall back down in November and plateau in December at about 61%. This could signify improved expectations following a few highly touted positive job reports in the Fall and the brief attention to jobs and workers that accompanied the election campaign.
Any such expectations were let down, as Congress and the President haggled over the false choices between various modes of austerity. The deal they reached does little to address the ongoing jobs crisis, and the continuing pressure to cut government spending threatens the one sector that has been expanding consistently, health care. Meanwhile the tax deal primarily benefits wealthier individuals, and the expiration of the payroll tax holiday means less take home pay for those workers who are employed.
As a nation we could be making the decision to invest the necessary resources to prepare for long-term care for an aging population, address ongoing deficiencies in our public infrastructure, and shift to more sustainable production. This would both create jobs and meet actual needs of the current population and future generations. CPEG’s Jobs Program and the 21st Century Humphrey-Hawkins Full Employment and Training Act offer a way out of this morass. If we instead continue to muddle through, tilting at the windmills of deficits and big government, we will see more evidence, like this latest BLS report, of the dead-end of austerity politics and the ever-delayed promise of private sector solutions.