The latest jobs report from the Bureau of Labor Statistics confirms what voters felt when they went to the polls Tuesday: Job growth continues slowly but inadequately, built on a weak foundation of weak wage growth and low labor force participation.
There were 214,000 new jobs created in October, the report said, with the unemployment rate at 5.8 percent. It’s enough to prompt optimistic headlines, but as we’ve said repeatedly, this is well under the rate of growth we really need to make workers whole after the damage done by the 2008 recession. We’ve been living with unemployment above 5.8 percent since August 2008 – more than six years.
We still have an economy in which 32 percent of the unemployed have been out of work for more than 26 weeks – that’s almost 3 million people who the job market still does not have room to accommodate. The labor-force participation rate remains at a historic low, under 63 percent. Job growth continues to be concentrated in low-wage service jobs, with only modest increases in manufacturing, construction and other blue-collar occupations. Public-sector job growth barely budged upward.
Wage growth year-over-year remains stuck at about 2 percent, which in effect is virtually no growth at all when inflation is taken into account. Wages should be growing at a rate of 3.5 percent annually to remain consistent with the Federal Reserve’s 2 percent inflation target, so there is plenty of room to raise wages without raising fears of inflation.
This is the economic climate that drove voter anger and frustration Tuesday. It motivated voters to approve minimum-wage-increase referendums whenever they were on the ballot, even as they voted out Democrats who support a minimum wage increase but did not present a bold vision for how to rebuild middle-class prosperity.
Here’s where the tragedy of Tuesday’s election results come into sharp relief. Republicans were more successful than Democrats in tapping into voters’ economic anxiety, even with their record of blocking the policy changes needed to address the causes of that anxiety.
A major infrastructure investment program, done while borrowing costs are near zero, would have bolstered construction, manufacturing and other higher-age sectors. But that effort has now been held hostage to a deal to let corporations off the hook that have stashed profits overseas to avoid corporate taxes. Now that Republicans control the Senate as well as the House, we will see that deal go forward as a bipartisan “compromise” to show that Washington can “get things done.” Never mind that by any reasonable standard letting the nation’s biggest corporations keep billions of their ill-gotten gains from shifting profits overseas is too high a price to pay for the trickle of extra dollars that would be yielded for infrastructure.
There is even less of a chance that a Republican-controlled Congress, believing that every economic challenge is a nail that requires the hammer of top-end tax cuts and government spending cuts, will send increased state and local funds to the nation’s pockets of high unemployment. The Economic Policy Institute released a chart this week that showed that every state but two has shown a decline in the percentage of the working-age population with a job. The drop has been 3 percent nationally, and 28 states have percentages below the national average. Four states – Georgia, Kentucky, New Mexico and Arkansas – have declines that more than double the national average.
That shows how in so many ways, what gains there are in the economy are not broadly shared. This will not be fixed, as Republicans are saying, by repealing the Affordable Care Act, building the Keystone XL pipeline, and by cutting corporate taxes. We need to invest in infrastructure, clean energy, education from preschool to affordable college, and in the communities that are always left behind in a you’re-on-your-own economic climate. Voters who in frustration voted out Democrats who failed to present a vision for how this can be done will now have to join a movement to ensure that Washington and the nation cannot duck these issues in the months and years ahead.