Today’s Bureau of Labor Statistics unemployment report was another one reflecting a so-called “new normal” for the economy in which what borders on bad is heralded as good.
Let’s not be ambiguous about this. The fact that the economy created 157,000 jobs in January, and that there were significant upward revisions in previous months’ jobs reports, is no signal that we’re coming out of our nation’s jobs crisis. Far from it. The Economic Policy Institute’s Heidi Shierholz today notes that “the jobs deficit—the number of jobs lost since the recession officially began plus the number of jobs we should have added just to keep up with the normal growth in the potential labor force—remains nearly nine million.” At our current rate of job growth, the labor market will not fill in that gap until the end of 2021, according to Shierholz.
That is unacceptable, and it is one more reason why we must resist the conservative-led drive in Congress for more of the kind of federal budget-cutting that will reduce demand, stifle growth and choke off job creation.
The Campaign for America’s Future’s Roger Hickey warned today that the austerity policies that have pushed unemployment upward in much of Europe are now scheduled to be imposed on the U.S. if Republicans insist on letting the sequestration cuts go into effect – and if they continue to threaten to crash the economy by failing to lift the debt ceiling.
“Republicans are repeatedly playing dangerous games with the U.S. economy, scaring investors and consumers alike, when we need much higher levels of investment and jobs growth if we are ever going to go beyond employing new entrants into the labor force and create opportunities for the millions of Americans still looking for work,” said Hickey.
The slight uptick in the unemployment rate, to 7.9 percent, reflects increases indication that some discouraged workers, who had given up on finding employment, are now once again looking for jobs. “We should be taking steps to create jobs, so those workers can find opportunities, not imposing European-style austerity, as is now scheduled in coming weeks,” said Hickey.
In the manufacturing sector, Hickey noted that the January jobs report shows the number of those jobs has been virtually unchanged since July 2012, an indication that low domestic demand, combined with economic troubles in Europe and China, continues to cripple markets for American manufacturing output, reducing hiring. Today the Alliance for American Manufacturing unveiled its “#AAMeter,” tracking on the Web and on Twitter progress toward President Obama’s goal of creating one million manufacturing jobs during the remainder of his second term. So far, the president is 996,000 jobs away from that goal.
This goal is important because manufacturing is one of the key areas of the economy that is most likely to produce the living-wage jobs around which we can begin to rebuild the middle class. So is construction, which got a boost in January because of the need to repair the destruction caused by superstorm Sandy last fall. And we must continue bolstering our technology and research sectors.
But we can’t do any of that when a pullback on government spending, before the private sector is fully restored to health, pulls the economy back toward recession. “With enough demand, the economy could be producing a trillion dollars more output and several million more people could be working,” notes Chad Stone, the chief economist at the Center for Budget and Policy Priorities, in his analysis of today’s unemployment report. Rebuilding that demand should be the number one priority.
Start by insisting that the U.S. make a major investment now in infrastructure, putting people to work ensure our roads, public transportation and other public assets can support a future vibrant economy. Send aid to the states to stem continuing layoffs in the public sector: in addition to the 43,000 federal jobs that have been cut in the past year, states and localities have shed an additional 31,000 jobs since last January. With our growing population, we need more teachers, first responders and other public-service providers, not fewer. And we must continue to resist efforts to shred the safety net that sustains the economically struggling and to fight cuts to Social Security, Medicare and Medicaid.
President Obama would be well advised to burst whatever shrugs of complacency there might be in the administration and Congress concerning the pace at which we are emerging from our jobs emergency. A challenge to Congress that we close the jobs gap identified by the Economic Policy Institute in 2016 instead of 2021 would require taking steps to double our economic output. Given that our economy grew at an annual rate of just over 2 percent in 2012, a growth rate above 4 percent a year, closer to the growth rates of the late 1990s, is not too much to ask.
If that became the focus of our economic policy, we would not be engaging in a myopic conversation about debt, deficits and budget-cutting. We would be instead obsessed – rightfully – on putting today’s 20.2 million unemployed and underemployed Americans back to work as quickly as possible. Let’s fix that debt – the jobs deficit – first.