July Jobs: Some Good News But Not Good Enough

On August 6, the Bureau of Labor Statistics published its monthly jobs report. On the whole, the news was positive. In July, 943,000 nonfarm jobs were added, and the June additions were revised upward to 938,000. Also, the official unemployment rate fell by half of a percent to 5.4%. For whites, the rate dropped to 4.8%, which is close to a conventional definition of full employment as 4% unemployment. But the rates were still very high for Blacks  (8.2%) and disabled workers (12.1%).

As the National Jobs for All Network’s Full Count (at NJFAC.org) shows, the real unemployment rate was much higher than official estimates. While the official unemployment rate was 5.4%, NJFAN’s rate was 11.7%. This higher number includes 6.5 million people who said that they wanted a job but had not actively searched recently. There are always millions of  such people just outside the labor force thinking about getting a job. Some are dealing with personal and societal issues (such as child-care obligations and COVID surges). Some are just waiting for better job offers.

Although it is true that labor markets have been improving, they are not as good as official sources would have us believe. In June, there seemed to be more job openings than unemployed people. But if we include the hidden unemployed, there are twice as many people who want jobs as there are openings. 

Two Plagues

The jobs report is based on information collected in the early part of last month, so it does not reflect the latest COVID spikes. Currently, we have a Double Plague: the Delta variant and a cultural-political sickness that allows average folk and Republican politicians to believe that it is good politics and patriotic not to get vaccinated or wear masks. Both plagues especially endanger employees whose work requires a lot of interaction with the public. The threat of getting sick and the real possibility of a new surge in business closures looms over many  businesses, including bars and restaurants. Currently it is true that people are coming back to work and some employers really are raising pay to attract employees. But job growth and pay increases in the bar and restaurant sector, for example, could stop if the Delta variant continues to spread.

Meanwhile, federal pandemic aid programs are being phased out. The stimulus checks are gone. The $300 unemployment supplement as well as special programs for gig workers will end everywhere on Labor Day, September 6. Weeks ago, conservative states were already cutting the supplement and gig benefits.

So there may be less federal money out there even as the Delta variant spreads and layoffs rise. Will the infrastructure add good-money jobs? It’s a good idea to fix bridges, roads, and water systems and to create good jobs that way. But the employment effects of new spending of $550 billion over five to ten years is not so large. And as for deficit-spending stimuli, the Congressional Budget Office predicts that deficits from the infrastructure bill will total $256 billion over ten years. That’s enough to make Republicans complain, but $25.6 billion a year is not much of a kick in a $20 trillion dollar economy. Under discussion is the Democratic plan to spend $3.5 trillion on health care, child care, education, and climate change. But its prospects are uncertain. Republicans and conservative Democrats who voted for the infrastructure bill are happier about fixing bridges than about fixing child care. 

A Note on Poverty 

Normally during depressions and recessions poverty rates rise as people lose jobs and income. But experts claim that the share of the population in poverty in 2021 is falling, and faster than at any time in the last sixty years. Why?  Mainly because the federal government sent out a lot of money. The stimulus checks, food stamps, and unemployment benefits were effective anti-poverty weapons. And benefits had an especially positive impact on Black people and on children.

It is a cause for joy when millions of poor people get a boost. And—no surprise—you can reduce poverty by giving needy people more money. But there are caveats to this upbeat story. Federal poverty lines are very low and millions of people who are above the lines are actually poor. Also, in a good-jobs full-employment economy, some of these people could be truly non-poor by earning adequate pay and benefits as job holders. Finally, as mentioned, many pandemic benefit programs are on the way out. Without new generous programs, poverty rates will rise again. Still, over the short-term, Biden’s de facto war on poverty has been remarkable.