Confidence Fairy MIA- Austerity Doesn't Work

Time to try Real Job Creation

Chicago Political Economy Group’s Analysis of Aug 2013 Jobs Report

September 6, 2013 - Bill Barclay

Once again the BLS monthly Employment Situation Report has given the lie to the idea, popular in Washington D.C. and Wall Street, that if we’re just patient and don’t do anything to upset the “jobs creators” (aka the 1%), they will come to our rescue and expand employment.  The data make clear that they haven’t.  The private sector continues to fail the one fundamental measure by which we should judge an economy: the ability to provide jobs – especially living wage jobs – for everyone willing and able to work.

We can begin with the most recent monthly data.  The number of, officially, unemployed remains well over 11 million, among which 4.3 million have been unemployed for 6 months or more.  Another 7.9 million people are working part time, want a full time job, but can’t find one.  An August report by the FRBSF found that, after the June 2009 end of the Great Recession, the part time share of total employment (that normally increases during recessions) has remained virtually flat, unlike the experience following prior recessions when it declined.  Of course the young and those with less education are more likely to suffer from the failure of the economy to create full time jobs.  Almost half of all employed workers aged 16 – 24 work only part time as do one-quarter of single women, aged 25 – 54 with no more than a high school education.  But others also experience the problem of part time employment: just days before the BLS report, USA Today reported on the travails of a new law school graduate holding three part time jobs in the Detroit area.  And then there are, again officially, 2.3 million “marginally attached” people who also would like a job but have given up looking.  Finally, the other bad news from today’s report is the downward revisions to both the June and July totals, resulting in an average rate of job creation of less than 150,000/month during the summer.

When talking about jobs, it is easy to get lost in the most recent numbers and forget to see the longer term pattern and it is there where the true economic and social cost of private sector failure and government inaction can be found.  The numbers are stark.  At the onset of the Great Recession, there were 146.7 million employed people in the US, 78.6 million men and 68.1 million women.  The employment to population ratio was 63.0 (69.7 for men and 56.6 for women).  At the end of the Great Recession these numbers were 140.2 million (73.8 million males and 66.4 million females employed) and an employment to population ratio of 59.5 (64.7 for men and 54.6 for women). 

 We are now more than 4 years beyond the end of the Great Recession and what has happened?  Well, the good news (sort of) is that there are now as many women employed as at the beginning of the Great Recession but the female employment to population ratio has dropped to 53.4.  The news is even worse for men where there are still 2.5 million fewer men employed than at the onset of the Great Recession and the male employment to population ratio is only 64.2. 

 These are the numbers.  What is happening – during the Great Recession and even more strikingly afterward – is the exit from the labor force of millions of people.  The number of these people is now over 90.4 million, up from 79.1 million at the onset of the Great Recession. And up from 80.7 million at the official end of the Great Recession!  This is an untold story of hopes crushed, dreams deferred, life expectations shattered.  It is also, as Krugman estimated in his NYT column today, a loss of perhaps $2 trillion in economic output.  The failure of our political and economic rulers to respond to the needs of these – to date invisible – people, is criminal.  And it demonstrates the complete failure of the US economy to provide even the basic means of livelihood for over one-third of our people. 

 We can abandon the penny wise/pound foolish policies of Congress (and to a significant extent, the Administration) by demanding legislation that addresses this ongoing tragedy is enacted.  There are several proposed bills but the best remains that proposed by Rep. John Conyers, “The 21st Century Humphrey-Hawkins Full Employment and Training Act” (HR 1000).  And it’s even better: HR 1000 would pay for job creation by a financial transaction tax – two birds with one stone.  If your representative is not one of the 42 already signed on as co-sponsors, what are you waiting for? 

 Bill Barclay. Chicago Political Economy Group

Bill Barclay is on the Steering Committee of Chicago DSA and serves as DSA National Member Organizer.

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

 

 

 

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