An Anemic Recovery: January Federal Jobs Report

By Sid Hollander

The anemic recovery of the labor market proceeded apace in January, with unemployment ticking down by only a tenth of a point, from 6.7 to 6.6 percent (10.2 million people.)  Job creation sputtered along at little more than half the rate that prevailed in the autumn, with only 113,000 jobs added.  That is only just enough to keep up with population-driven growth in the labor force.

Taken together with the even weaker job-creation performance in December (a mere 75,000 jobs added) it once again raises doubts about the depth and durability of the recovery that started in June 2009.  It is no small irony that the January report, which documents the persistence of historically high (35.8 percent) levels of unemployment lasting over half a year, was released only a day after a Senate filibuster had blocked the approval of extended unemployment insurance payments to the long term unemployed.

It is well known that that the standard unemployment rate tells only about half the story of the shortage of jobs.  Ignored by the official statistics are those who have had to settle for only part-time work, and those whose efforts to find work over the previous 12 months have not included explicitly “looking” for work in the past week.  Counting these officially uncounted job seekers would give us an overall unemployment rate of 12.7 percent (20 million people.) 

That 12.7 percent can be compared with an overall unemployment rate of 7.9 percent that existed at the end of 2006, following a period of only fairly weak employment growth and shortly before the onset of the Great Recession.  If 7.9 percent were our overall unemployment rate today, instead of 20 million people we would be talking about only 12.5 million unemployed.  An additional 7.5 million people would be employed in full time jobs!

The “jobs-lite” recovery is now about four and a half years old and shows no signs of establishing the sustained job growth of at least 250,000 per month that would bring unemployment down to its pre-recession levels in the next four and a half years. 

The problem of weak job creation, however, dates from well before the onset of the recession.  Job creation has been trending down for many years.  As recently as the year 2000, 64.6 percent of the adult population (including teenagers) was working.  Now only 58.8 percent is working.  That amounts to approximately 15 million fewer jobs. 

Part of the reason for the jobs deficit can be traced to the growing inequality in the distribution of income in the United States.  As income flows increasingly to the top of the income distribution overall expenditures fall, because the rich spend a much smaller fraction of their income than do those whose small incomes are completely used up buying the necessities of daily life.  With aggregate demand for goods and services thus limited, businesses hesitate to expand for fear that they would not be able to sell their additional production.  That hesitation translates immediately into reduced economic growth and job creation, all because of the extreme inequality in the distribution of income.  One commentator, Joseph Stiglitz, estimates that extreme inequality may keep the official unemployment rate as much as two to five percentage points higher than it might be otherwise.

The pathologies of the private sector have their counterparts in the public sector.  The January jobs data tell us that government employment dropped by 29,000.  With the effects of the federal government’s timid stimulus now long past, many state and local governments continue to struggle to maintain already-reduced services, with federal employment also down.  What stands out is the federal government’s failure to mount a public jobs program that is even remotely commensurate with the scope of the Great Recession.  Perhaps worse is the failure to address the longer-term failure of job creation throughout the economy. 

The Chicago Political Economy Group (CPEG) has proposed a large federal government jobs program that would be financed by a small tax on financial transactions (“A Permanent Jobs Program for the U.S.” available at cpegonline.org). Addressing both the long- and short-term failures of job creation, it would create jobs directly.  It would also alleviate income inequality and thereby promote further job creation.  At the low end of the income scale, the jobs would go first to those who have been forced to the margins or entirely out of the labor market.  At the high end of the scale, the financial transactions tax would eat into some of the uberprofits in the financial sector, profits that have contributed to the recent acceleration of inequality.  Bills embodying elements of the CPEG program are pending before the congress.  Congressman John Conyers has introduced “The 21st Century Humphrey-Hawkins Full Employment Act” (HR 1000) and Congressman Keith Ellison has introduced “The Inclusive Prosperity Act” (HR 1579).

Both the Conyers and the Ellison bills deserve our strong support, and it can come none too soon.  Time is not on our side.  The power of the rich to make themselves richer will only compound itself as their open-ended political spending grows under the shelter of Citizens United.  In the race between the power of money and the power of numbers of people, the power of money is rapidly pulling away, and the power of popular politics to reverse the growth of inequality is dwindling.

Sid_Hollander2.jpg

 

 

Sid Hollander is a founding member of the Chicago Political Economy Group.

 

 

 

Individually signed posts do not necessarily reflect the views of DSA as an organization or its leadership.

DSA Queer Socialists Conference Call

May 25, 2017
· 38 rsvps

Join DSA's Queer Socialists Working Group to discuss possible activities for the group and its proposed structure. 9 pm ET/8 pm CT/7 pm MT/6 pm PT.

 

What Is DSA? Training Call

May 30, 2017
· 49 rsvps

If you're a new DSAer, have been on a new member call, but still have questions about DSA's core values/strategy/core work and how to express these ideas in an accessible way to the media, as well as to friends, family and others who might be interested in joining DSA, this call is for you. 

We will talk through the basics of DSA's political orientation and strategy for moving toward democratic socialism, and also have call participants practice discussing these issues with each other. By the end of the call you should feel much more comfortable thinking about and expressing what DSA does and what makes our organization/strategy unique. 8 pm ET; 7 pm CT; 6 pm MT; 5 pm PT. 70 minutes.

Film Discussion: Rosa [Luxemburg]

May 31, 2017
· 93 rsvps

Join DSA member Jason Schulman to discuss the film Rosa, directed by feminist filmmaker Margarethe von Trotta. View it here at no cost before the discussion. Marxist theorist and economist Rosa Luxemburg (1871-1919) played a key role in German socialist politics. Jason edited Rosa Luxemburg: Her Life and Legacy and has a chapter in Rosa Remix. 9 ET/8 CT/7 MT/6 PT.

Film Discussion: The Free State of Jones

June 11, 2017
· 26 rsvps

Join Victoria Bynum, Distinguished Professor Emeritus of History, Texas State University, San Marcos, to discuss The Free State of Jones. STX Entertainment bought the film rights to Bynum's book of the same title. She also served as a consultant and appears in a cameo scene. What was the Free State of Jones? During the Civil War, an armed band of deserters led by Newt Knight, a non-slaveholding white farmer, took to the swamps of southeastern Mississippi and battled against the Confederacy in an uprising popularly known as “The Free State of Jones.” Joining Newt in this rebellion was Rachel, a slave. From their relationship, there developed a controversial mixed-race community that endured long after the Civil War had ended. View the film here for $6 before the discussion. 8 ET/7 CT/6 MT/5 PT.

Introduction to Democratic Socialism

June 13, 2017
· 13 rsvps

Join Bill Barclay, Chicago DSA co-chair, and Peg Strobel, National Political Committee and Feminist Working Group co-chair, on this webinar for an overview of what we in Democratic Socialists of America mean when we talk about "socialism," "capitalism" and the goals of the socialist movement. 9:30 PM ET; 8:30 PM CT; 7:30 PM MT; 6:30 PM PT.

  1. This webinar is free for any DSA member in good standing.
  2. You need a computer with good internet access.
  3. Your computer must have headphones (preferred) or speakers; you can speak thru a mic or use chat to "speak".
  4. If you have questions, contact Bill Barclay, chocolatehouse@sbcglobal.net.
  5. If you have technical questions, contact Tony Schmitt, schmittaj@gmail.com, 608-355-6568.

Film Discussion: Pride

September 10, 2017
· 7 rsvps

Join DSA members Eric Brasure and Brendan Hamill to discuss the British film Pride (2014). It’s 1984, British coal miners are on strike, and a group of gays and lesbians in London bring the queer community together to support the miners in their fight. Based on the true story of Lesbians and Gays Support the Miners. The film is available for rent on YouTube, Amazon, and iTunes. 8 ET/7 CT/6 MT/5 PT.

Film Discussion: Union Maids

September 24, 2017
· 5 rsvps

 

Join DSA member and labor historian Susan Hirsch in discussing Union Maids (1976). Nominated for an Academy Award, this documentary follows three Chicago labor organizers (Kate Hyndman, Stella Nowicki, and Sylvia Woods) active beginning in the 1930s. The filmmakers were members of the New American Movement (a precursor of DSA), and the late Vicki Starr (aka Stella Nowicki) was a longtime member of Chicago DSA and the Chicago Women's Liberation Union. It’s available free on YouTube, though sound quality is poor. 8ET/7CT/6MT/5PT.