Jobs: First Friday Fears
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On the first Friday of each month, the Bureau of Labor Statistics releases its jobs numbers for the previous month. This Friday, President Obama’s wish for good news on the jobs front was not to be fulfilled. Sure the numbers are up: in fact, there are 431,000 new employees. It was the strongest job growth in nearly a decade according to NPR.
But most of it came from the temporary boost provided by the government hiring National Census employees. Those positions will dry up in a few months. The private sector added only 41,000 new jobs. Combined with global jitters—Hungary trading places with Greece as the source of financial anxiety and potential debt default—the tepid private hiring sent stocks down.
All of this highlights the “jobs deficit” (a term coined by the International Labor Organization), i.e. the deficit that has immediate consequences for most people. So, official unemployment edged downward by just 0.2%. But deficits that continues to engage the media are the annual budget deficits and total national debt.
Despite their temporary return to the political mainstream, economic and job stimulus advocates—“Keynesians”—are of the defensive. Economics Nobel Prize winner and New York Times columnist, Paul Krugman (writing together with Robin Wells) warns that “the financial industry’s political power has not gone away” and that their ideology “has proved remarkably resilient…” despite the bursting of multiple bubbles.
The short- and medium- term job outlook—accepting all the usual assumptions about where jobs come from—is not good. At the end of March, the Economic Policy Institute reported that the economy is down 11.1 million jobs since the start of the current crisis (when you include the 2.7 million jobs it would have needed to create just to keep up with new job seekers). Worse still, they looked at the way the economy has been recovering in light of the last few recessions… and came to the conclusion that if we repeated the best of the 1990s scenarios, October 2007 job levels will only be re-attained in late 2013 or 2014. But the 2000s were not the 1990s. The last few “recoveries” came with the adjective, “jobless.”
These observations—combined with the palpable hardship—should make the case for an aggressive approach to job creation and economic restructuring. Moreover, 81% of the public reported that they want Congress to “act on job creation” in a recent Pew Poll. Happily, a large majority (67%) wants the government to address the country’s energy needs. In any other circumstances, ambitious green jobs programs such as those suggested by UMass. economist Robert Pollin would make political sense (also see his, “Doing the Recovery Right”). Unfortunately, much work remains to be done before the public explicitly demands these jobs.