EMAIL SIGN UP!
Most Popular This Week
Popular content
Today's Top News
Hey Washington! We're Still 10 Million Jobs Short
The U.S. recession officially ended in June 2009, but most Americans don't feel like we are in a recovery. That's because it's been a weak recovery, with the size of the economy barely bigger today than it was four years ago, when the recession started.
Since America is a rich country, it is not growth itself that matters most but employment and, of course, the distribution of income. And the employment numbers are just terrible.
The simplest measure is the percentage of the working-age population that is employed. That peaked at 63.4 percent in December 2006. It plummeted to a low of 58.2 percent last July and is hardly different now - 58.5 percent in the latest figures.
What this means is that we need about 10 million jobs to get back to full employment.
There was a lot of happy talk earlier this month when the December job numbers were released. They showed 200,000 payroll jobs added in December, and the unemployment rate falling to 8.5 percent. Adding even 200,000 jobs a month is not very good for an economy that needs at least 90,000-100,000 jobs a month just to keep up with the growth of the working-age population.
And as my colleague Dean Baker pointed out, the latest jobs numbers have probably been over-optimistic. Realistically, he notes, at present trends of job growth we will not hit full employment until 2028. This would be an economic failure of disastrous proportions.
Looking at it from the unemployment side, the U.S. government has a broader measure of unemployment that includes people who are involuntarily working part-time and people who have given up looking for work. This is currently at 15.2 percent of the labor force, or 23.7 million people who need work.
To make matters worse, we have had record numbers out of work for more than six months - more than 40 percent of the unemployed over the last two years. Long-term unemployment is much more devastating for workers and their families. And recent research shows that even this measure underestimates the current long-term hardship in the labor market.
Although there has been some fear of the economy lapsing into recession again, the more likely scenario in the foreseeable future is slow growth with intolerable levels of unemployment, along with rising poverty and inequality, and accompanying social ills.
Of course, there are many things that the government could do to restore full employment.
The Obama administration's 2009 Recovery Act, or stimulus, was only about one-eighth the size of the lost demand from the bursting of the housing bubble. It saved an estimated 1.2 million to 2.8 million jobs, not nearly enough.
Obviously a much bigger stimulus, and one more focused on creating employment, is needed - but the politicians are afraid to talk about it. And the likely Republican presidential candidate, Mitt Romney, promises to create much more unemployment through massive cuts in the federal budget.
Another way to reduce unemployment would be for the government to subsidize and encourage employers to allow for shorter hours, as an alternative to laying people off. Unemployment insurance funds, along with other money, could be used for this purpose. This has proved very successful in Germany, where unemployment has been reduced to 5.5 percent - lower than it was before the world recession.
Of course, so long as our political discussion is fixated on a non-existing "threat" from the federal debt, these solutions will be out of reach. The current net interest burden on the federal debt is 1.4 percent of GDP, about as low as it has been for more than 60 years.
The biggest burden we are carrying is the economic illiteracy of our leaders, for which Americans are paying a very steep price.
Comments
Note: Disqus 2012 is best viewed on an up to date browser. Click here for information. Instructions for how to sign up to comment can be viewed here. Our Comment Policy can be viewed here. Please follow the guidelines. Note to Readers: Spam Filter May Capture Legitimate Comments...
12 Comments so far
Show All"Late Degenerate Capitalism: That's when a capitalist economy is taken over by the financial markets. Economists no longer regard economic data as a measure of the health and wealth of the nation, but for what impact they might have on the markets."- Dr. Richebächer
............WTF does any unemployed person or college graduate have to look forward to these days while the parasites on Captiol Hill continue to "outsource" our jobs through Trade Agreements?
............Here are the REAL figures from John Williams at Shadowstats.com who calculates government stats the way they use to be; before things got so bad that the cover-up began in earnest: U.S. Unemployment reported December 2, 2011.....Government - 8.6% and shadowstats 22.6%. Given the number of people who are still unemployed or underemployed, whose figures do you think are more accurate?
Ever since GOP President Ford and Democrat Carter lost their re-election bids (in 1976 and 1980 respectively) due in part to high inflation and unemployment statistics, both parties have revised the formulas for calculatiing inflation and unemployment in order to 1) make the incumbant look better, 2) to rationalize reducing workers' wages and benefits, and 3) to give banksters low interest loans to encourage speculation and bubble formation.
Obama's catfood commision and super catfood committee both pushed for further cooking the books to further understate inflation and unemployment rates. Obama will wait until he is re-elected in November to implement them.
Weisbrot ignores one of Obama's biggest job killers...his "health care reform" legacy.
If Obama had not done Obamacare and limited his first term "health care reform" to reducing the Medicare eligibility age from 65 to 60, four million additional older workers would have retired by now thereby creating four million family wage jobs for young Americans who are experiencing the highest unemployment rate of any age group.
In addition to preventing those four million workers from retiring, Obamacare will prevent more than one million additional older workers from retiring during 2012.
One of the biggest corporate welfare programs in history, Obamacare is therefore killing half of the ten million jobs Weisbrot correctly asserts are needed to attain full recovery (these figures do not include the number of jobs Obamacare will kill during Obama's second term).
Had Obama really demonstrated the hope and change he promised and made all Americans eligible for Medicare at birth, it is likely that ten million jobs would have been created when you consider how many US businesses would become more globally competitive
Ray,
If you believe full recovery is simply ten million jobs, then you haven't considered the way unemployment use to be calculated. It's more like thirthy-six million jobs to attain FULL RECOVERY.
........If ten million jobs was an accurate figure, we wouldn't have tens of millions on food stamps and 46 million without health care.
I had University of Florida's version of NPR on the radio tonight when I ran some errands, and there was an interview with Newt Gingrich. He's telling his flock that Obama was the prez who gave out the most food stamps of any pres. Newt loves to do this, provide a factoid without the remotest form of context.
Seems that Perry had the big money tell him to back Newt; and since they worry about Newt's record with former wives, the new meme is that since both men are Christians, they know that God forgives them for their human failings. (The subtext is that good Christians should do likewise.)
Newt has always been a favorite of the uglinest of national interests. He said he'd link a food stamp program with job training so people would not just be able to (stated in so many words) collect free lunch.
Those running for office are largely persons for whom Truth means nothing, and the only thing that counts is how well PR spin plays. Meanwhile, be on the look-out for a Return of the Newt.
Siouxrose:
.........If Newt has the audacity to talk about a "Free Lunch", he obviously hasn't read the book which engages the reader on what free lunch really means in a society where the pigs on Capitol Hill pig-out on free lunches every f-king day of the week with lobbyists who fund their campaigns and then enjoy the legislation that gets passed from the pig-out funds they so generously dished out.
Enough of this neo-liberal BS economy. Vote Rocky Anderson for president! voterocky.org
10 million jobs needed? We still need 35 million jobs. This is bullshit.
right on dude, when the goalposts keep moving, so do the goals
Since America is a rich country, it is not growth itself that matters most but employment and, of course, the distribution of income. And the employment numbers are just terrible.
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
mark, i notice this article first appeared in the san fransico bee. i mention that because for years now, i've watched reports about collapsing hives. you know, something is missing in our collective mindset now that negotiable currency has become our sole measure of riches. the tiny bee, buzzing and dancing in excitement sharing her discovery of a field of flowers or orchard, contributes more to the preservation of life than all seven billion of us put together. i do agree with you 100% that, "it is not growth itself that matters," as the very natural resources on which we capitalize fade away, we must conclude quickly that true wealth comes from Nature; not the printing press! mark (/b> yeh, i put all sorts of hotmail directions in), i'm sure that as an educated economist you can crunch those dollar numbers at an amazing speed, but does that matter when old mother hubbard opens the cupboard to find a vast emptiness there; no bread no honey and her doggie looks at her and licks his lips as if she's a tasty hors d'ouvre?
surely, you along with all educated economists, know economy began as a science of natural resource management. today, our get-rich schemes are based in accumulated debt earning interest on debt. the world-wide monetary debt exceeds by many fold the world’s gross production. america’s policy “deciders” fear the financial repercussions should china call in our debt. that’s an easy one to solve! “forgive our debts as we forgive our debtors!” if we “exceptional” americans continue the delusional warring our way to a higher standard of living, robbing our neighbors and our Earth home, no amount of printed currency can save our narcissistic silly asses. sure, Nature forgives us because we are inseparable from Nature.
okay, mr. mathematician, what calculation proves our species greater than the whole? i’d say we’ve taken a mental quantum leap from reality into fantasy land! as one common dreamer posted, “it’s time to put eco back in economics!” take a lesson from the bee for she creates abundant wealth while we create an awesome debt to Nature! i copied the following food for thought from another discussion thread.
"Capitalism is, Marx concludes, one vast speculative system. The perpetual accumulation of capital and of wealth is therefore crucially dependent upon the perpetual accumulation and expansion of debt. ...sovereign debt is in fact a crisis of the financial system which arises because of a failure to find new ways to expand the surplus through reinvestment! ...capitalists operating in their own self-interest often take actions that collectively threaten the continuity of capitalism as a whole."
Only 10 million jobs short? Really? It's obvious that figure doesn't include the millions who are underemployed and underpaid. If those figures were included, I have a hunch it would be much more than that.
"Wall Street Greed And Endless Wars -
to Blame for our Budget Crisis:
http://www.youtube.com/watch?v=NC_3PiFQUTw