Abysmal March Jobs Report Demonstrates the Need for a Federal Living Wage Jobs Program to End the Lesser Depression

The March jobs report underscores the weakness of the economy's crawl out of the depths of the "Lesser Depression" (LD), once again demonstrating that relying on private sector growth, even with massive and unprecedented Fed blowing up of a renewed financial sector and stock market bubble, is not going to set the U.S. economy on a path to broad-based and sustainable prosperity, as the Chicago Political Economics Group (CPEG) has been saying for many years (see: http://www.cpegonline.org/reports/jobs.pdf).

The "Current Employment Statistics" (CES) "Establishment" survey shows that non-farm payroll jobs expanded by only 88,000 in March, far below economists’ expectations of 200,000 and well below the average 197,000 payroll job growth of the last six months (Sept. through Feb).  Though this is a one-month number and there have been one-month "summer declines" in job growth throughout this tepid expansion (in June-Sept. of 2010, July of 2011 and June of 2012), this is a striking decline after six months of steady (though far from adequate) growth that does not bode well.

Indicative of how terrible the current U.S. labor market is relative to the post-war period, the current average duration of unemployment increased to 37.1 weeks (from 36.9 in Feb.), roughly double the average length of unemployment for all prior recessions since at least 1948 – see New York Times (11/2/2012): “Jobless and Helpless, in America.”  Job losses were recorded in retail trade and the U.S. Postal Service.  The latter lost 12,000 jobs in March – thanks to the massive "pension poison-pill" saddled on the Postal Service by the continued "destroy U.S. jobs" efforts of the Republican majority in the U.S. Congress (see: http://truth-out.org/news/item/14486-the-usps-media-fail).  

We are more than 45 months after the official beginning of the "expansion" in June 2009 and still have not even recovered the jobs lost since the start of the LD in Nov. 2007.   Figure 1 and Table 1 below show payroll employment change as a percent of starting employment for each of 11 post-war recessions, labeled by their official "trough," or start of "expansion", date so that the LD is labeled June 09.  As can be seen in the chart, the longest previous post-war Nov. 01 "jobless growth" recession had none the less fully recovered recession job loss by 38 months after its start.  As the average postwar expansion is 59 months, if the current abysmal rate of employment growth in the current "jobless" LD continues, it appears highly likely that the U.S. economy will not add much employment, if any, to that prevailing in Nov. of 2007.

And reflecting the fact that we have an income as well as a jobs problem, average hourly earnings also declined in March to $20.03 from $20.04, representing a much larger real income loss of 4.3 cents an hour at the current 2 percent inflation rate.

graph1.png

As bad as the March payroll numbers look, the more comprehensive "Current Population Survey" (CPS) "household" survey that includes: agricultural workers, the self- employed, paid family workers, and private household workers, is even more telling. March CPS employment (E) declined by 206,000, so that the official Unemployment Rate (UR) declined (from 7.7 percent to 7.6 percent)  only because the official "Labor Force" (LF) declined even further by 496,000 ( UR = (LF-E)/LF) as the Labor Force Participation Rate (LF/Pop) and the employment to population rate (E/Pop) both declined.  The former was 63.3 percent in March 2013 versus 66 percent in Nov. of 2007, and the latter was 58.5 percent down from 62.9 percent in Nov. 2007.

Using the more accurate and comprehensive U-6 "Alternative Measure of Labor Underutilization" (which includes workers who are no longer in the official labor force and the part-time unemployed who cannot get full-time employment) the real unemployment rate is 13.8 percent, and the number of unemployed in the U.S. is almost 22 million people.

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Finally, to show how deep the LD is and how unlikely a real recovery is – given the current course of relying on private sector growth plus continued Federal Reserve financial sector and Wall Street "pump priming" without a massive federally funded jobs program – Figure 2 below compares the employment that would be required to maintain the Nov. 2007 employment-to-population ratio (E/Pop=0.62932785) constant as population increased in subsequent months, to actual employment, based on BLS monthly "Civilian Non-institutional Population" and actual (CPS) employment estimates.  As can be seen in Figure 2, based on this measure there has been virtually no jobs recovery at all in the 45 months of "expansion" from the June 2009 LD trough. All of the relative "recovery" experienced by the U.S. economy in the last 45 months has been due to a larger share of the population not being included in the labor force and not to employment growth relative to population increase.

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Ron Baiman is on the steering committee of Chicago DSA and a member of the Chicago Political Economy Group.

Feminist Working Group

December 14, 2016
· 40 rsvps

People of all genders are welcome to join this call to discuss DSA's work on women's and LGBTQ issues, especially in light of the new political reality that we face after the election.  9 pm ET; 8 pm CT; 7 pm MT; 6 pm PT.

DSA Webinar: Turning Members into Leaders

December 28, 2016
· 4 rsvps

Are you starting a new group? Or have you been doing most of the work for your longtime group? Has it been hard to keep new people involved or get them to take responsibility? But suddenly everybody wants to jump in at the same time! Learn how to mentor new leaders and make sure they have all the information and tools they need to succeed.

Join us for our latest organizing training for democratic socialist activists: DSA’s (Virtual) Little Red Schoolhouse.

NOTE: This training is at 9:00pm Eastern (8:00pm Central, 7:00pm Mountain, 6pm Pacific). Please RSVP.

Instructor:

  • Steve Max, DSA Vice Chair and one of the founders of the legendary community organizing school, The Midwest Academy.

In Leadership Development you will learn:

The proven steps to developing the leadership skills and commitment of more members:

  • identifying potential leaders
  • recognizing what each one brings to the group
  • asking people to volunteer
  • giving them specific tasks
  • supporting them in their efforts
  • creating opportunities for new leadership
  • following up.

Training Details

  • This workshop is for local leaders who will lead campaigns in their chapters.
  • If you have a computer with microphone, speakers and good internet access, you can join via internet for free.
  • If you have questions, contact Theresa Alt talt@igc.org 607-280-7649.
  • If you think you can't do it by computer, contact Tony Schmitt schmittaj@gmail.com 608-355-6568.
  • You can participate in every workshop or just attend once in a while.
  • Workshops will generally be on a weekends or evenings.
  • Participation requires that you register at least 45 hours in advance -- by midnight Monday.

DSA New Member Orientation Call

January 19, 2017
· 24 rsvps

You've joined DSA - Great. Now register for this New Member Orientation call and find out more about our politics and our vision.  And, most importantly, how you can become involved.  8:30 PM ET; 7:30 PM CT; 6:30 PM MT; 5:30 PM PT.

Film Discussion: The Price We Pay

January 30, 2017
· 9 rsvps
The Price We Pay blows the lid off the dirty world of corporate malfeasance — the dark history and dire present-day reality of big-business tax avoidance, tax havens - and what we need to do to stop this.  DSA member Bill Barclay, who has a cameo role in the film, will facilitate the discussion.

Full film available on Vimeo.