Once again the BLS monthly Employment Situation Report has given the lie to the idea, popular in Washington D.C. and Wall Street, that if we’re just patient and don’t do anything to upset the “jobs creators” (aka the 1%), they will come to our rescue and expand employment. The data make clear that they haven’t. The private sector continues to fail the one fundamental measure by which we should judge an economy: the ability to provide jobs – especially living wage jobs – for everyone willing and able to work.
We can begin with the most recent monthly data. The number of, officially, unemployed remains well over 11 million, among which 4.3 million have been unemployed for 6 months or more. Another 7.9 million people are working part time, want a full time job, but can’t find one.
The BLS labor market bulletin for July reports total non-farm employment increased by 162,000 jobs and the unemployment rate inched down to 7.4 percent (down 0.2 percentage points from 7.6% in June). A closer look at the fine print of the gross statistics reveals that structural problems remain.
The report includes a downward revision of 26,000 from the previously reported May (175,000) and June (195,000) jobs’ totals. Thus the reported 162,000 jobs gain is in fact 13,000 below a 3 month average of 175,000.
Part of the drop in unemployment is accounted for by drop outs from the labor market (the so-called discouraged workers). The labor force participation rate declined 0.1% (from 63.5 to 63.4%), while the portion of the population employed remained at 58.7%. So despite the decline in the unemployment rate the number of workers unable to find work increased and no new jobs were created relative to the size of the working age population.
The June unemployment situation, as depicted by the Bureau of Labor Statistics in its July 5 report, looks like May redux: Unemployment rate stuck at 7.6%; number of persons unemployed stuck at 11.8 million; number of persons unemployed for at least 27 weeks stuck at about 4.3 million or 36.7% of all unemployed persons. Even the increase in the number of persons employed (195,000 vs. 175,000 in May) was far too small to force a change in the long term trajectory of job creation, which has averaged 182,000 per month over the last year.
This Lesser Depression has, indeed, been devastating, especially for the less educated, for African Americans, and for Latinos. After 4 full years of economic “recovery” the number of unemployed persons is still 5 million greater than it would be if the unemployment rate had dropped by now to its eve-of-Lesser Depression low of 4.4% (May, 2007.) And it should be noted that 4.4% unemployment is higher than its historic lows and probably does not represent “full employment.”
The labor market remained sluggish in May. Unemployment rose from 7.5% to 7.6%, while nonfarm payroll increased 175,000. Much of the job growth was concentrated in retail, food services and drinking places and temporary help. Manufacturing fell slightly.
The growth in employment is at about the same rate as has characterized the economy over the last year. This rate is simply not enough to make headway against the huge damage done by the financial panic and recession that started in late 2007. The key measure of labor market health, the employment to population ratio remains stuck at 58.6%. That ratio has been at this level since 2010. On the eve of the recession the employment to population ratio was over 63%. In the 2001 recession this measure never fell below 62%. The economy remains in deep trouble. We are treading water. Growth is barely covering population increases. The human cost of the recession continues. The simple logic of the numbers is that we have made no progress.
On April 24th two groups of young people met up on Chicago’s Magnificent Mile, and it wasn’t for the shopping. One group was striking retail and fast food workers who had walked off the job to protest low wages and demand a $15 minimum wage for downtown workers. The other group was students protesting Mayor Rahm Emmanuel’s school closings. Many of the striking workers were only a few years older than the students. Inequitable education policies like those of the Chicago Public Schools fall most heavily on low-income communities. The experience of dictates from above disrupting neighborhoods—closing schools, firing school staff, reducing education to performance on high stakes testing–with no voice from those affected doesn’t produce schools encourage low-income students to assert themselves and demand a better life for themselves and their families. Last Wednesday the youth of Chicago taught us what we should already know, the economy is not working for most people in the U.S.