Two depressing reports today show the depth of today’s jobs emergency, both immediately and in the long term. The message that these two reports convey is clear: We are in a deeper hole than much of the rhetoric coming from either end of Pennsylvania Avenue suggests.
One is from the Bureau of Labor Statistics, and it is a report that some mainstream media headlines like this one is couching as a positive: “Unemployment falls in 39 states in June.”
But you don’t have to get too far into the story to see its dark side. As is true nationally, the reason the unemployment rate is falling is that many people are just giving up working for work. In fact, there are 14 states in which the size of the labor force has shrunk by at least 1 percent since June 2009. The state with the most labor force shrinkage is West Virginia, down 2.6 percent. Delaware’s work force is down 2.5 percent, and both Indiana and Colorado have seen work force drops of more than 2 percent.
Many of the states that are seeing a growing labor force, on the other hand, are seeing a higher unemployment rate. Texas, whose labor force grew 2.1 percent from June 2009 to June 2010, also saw its unemployment rate grow from 7.8 percent to 8.2 percent in the past year. Similar story in Rhode Island, where a 2 percent labor force increase led to an 8 percent increase in the unemployment rate.
Finally, while it is good news that only 11 states have experienced unemployment increases in the past month, the fact remains that in 25 states the unemployment rate was still higher in June than it was in June 2009. That’s all on President Obama’s watch, and all while the president’s economic stimulus plan was in effect. Those states include Nevada, New Mexico, Iowa, Pennsylvania, Florida, California, Texas, West Virginia, Arizona, New Jersey, Virginia and Illinois.
Meanwhile, the Center for Economic Policy Research released a report on “The Urgent Need For Job Creation” this afternoon that laid out the stark reality of how far the economy has fallen for job-seekers and shined a light on the scale of effort needed to get the job machine working at the level it must.
The most sobering conclusion: If the economy returned to the level at which it performed during the best four years of President Bush—think top-end tax cuts, limited government infrastructure spending, deregulation and the bubble in the housing market—it would take until April 2021 for the unemployment rate to get to the 5 percent it was in December 2007, before that house of cards collapsed.
Even if the economy were able to grow at the much faster rates it did during its bounce-backs from 1970s and 1980s recessions, it would take until the fall of 2012 before the job market returned to December 2007 conditions.
Congressional conservatives are pushing for a repeat of the Bush economic formula, but the Bush economic formula at its best performance means that we will be waiting 11 years before the job market reaches some semblance of near-full employment. We simply don’t have 11 years to wait for the job market to recover.
In fact, we don’t have four. About seven months ago we joined the AFL-CIO in calling for a plan that would create 402,000 jobs a month over two years. It is true that such a level of job creation, sustained month after month, is nearly unprecedented in recent economic history. But if President Obama and Congress had at least tried, the political arguments at center state would be over bold interventions that would make working-class people in Nevada, Michigan, California, Rhode Island, Florida and Mississippi—all states where the June unemployment rate was 11 percent or higher—believe that some real leadership was being exerted on their behalf.
Instead, Democrats are congratulating themselves that they have successfully gotten extended unemployment benefits past the “hell-no-you-can’t” Republicans, but are not marshaling themselves or the progressive base in fighting what should be the real war: a program that moves the economy toward that 400,000-jobs-a-month goal through investments in infrastructure, investments in people, clean energy legislation and rational tax policies.
“Many lawmakers, policymakers, and economic commentators do not appear to recognize the depth of the current labor-market recession,” CEPR’s report says. But it’s not too late to present an anxious public with a clear choice between the policies that will extend the nightmare of long-term joblessness into the next decade and policies that will get the working class working again.
