Update below.
The June jobs report reveals a much more serious job creation problem in this country than most policy makers realized. Over the past two months, job creation has essentially ground to a halt, with 25,000 jobs added in May and 18,000 in June. The unemployment rate, now 9.2%, is climbing.
Washington needs to quickly and aggressively shift from its long-term debt obsession to the much more immediate jobs problem.
To do otherwise at this point would be deeply irresponsible.
Almost everything in today's jobs report suggests recession-like conditions in the labor market. You don't want to read too much into any one report, but considering the last two reports together, the American jobs machine has stalled.
Look, I'm not trying to be unduly negative here. Obviously, a stall is better than the massive job losses that characterized the Great Recession. But if policy makers fail to recognize that our most pressing problem right now is job creation, they are a big part of the problem. We need them to be part of the solution.
Update: Somebody Do Something!
If there's a bright spot in today's terribly lousy jobs report, it's that it occurred before a weekend when the Obama administration and leading members of Congress are slated to meet on an issue of great urgency to the nation. It's just not exactly the right issue.
There's every reason for these negotiators to complete their work on the debt ceiling, get that source of econo-anxiety behind us, and plot a path to fiscal sustainability. Obviously, we need to hold off before starting down that path -- a recovery that looked fragile yesterday looks frail today, and so spending cuts or tax increases must be delayed for at least a year if not two.
But as the president himself said today at the top of his statement on the jobs report, what matters most to people right now is economic security, and for the broad American middle class, that means jobs and paychecks.
So these folks need to open their meeting on Sunday with a new agenda item: short-term measures to revive the job market.
I know this will not be the most popular agenda item in that room. In that regard, it's essential to point out that short-term, temporary jobs measures contribute almost nothing to the long-term deficit and debt, and are thus not inconsistent with the group's fiscal mission.
The president laid out a few ideas today, much like those from his press conference a week ago (see here for my take). I think he's on the right track -- clearly in "could" vs. "should" mode -- e.g., given the hemorrhaging of state and local jobs state fiscal relief would be a great idea. But it's an extremely heavy lift. (R's don't have much interest in supporting school teachers, cops, etc... and D's aren't anxious to send more money to R governors who complain about big gov't while they're cashing the checks.)
Along with the no-air-pocket strategy -- the payroll tax break and extended unemployment insurance run out at the end of this year and thus must be extended for another year -- we could use a significant infrastructure program.
The president mentioned the usual ideas here-road, bridges, railway -- and I'm for 'em. But as I've stressed, at least the first two in that list turn out to be more capital than labor intensive, and less popular compared to what I think is a better alternative: FAST (Fix America's Schools Today).
You really don't know until you try it, but I remain confident that this work repairing the nation's stock of public schools is labor intensive, meaning it will have a strong bang-for-the-buck in terms of job creation, the spillovers are highly positive, and this is work you can see in your community.
I also think Dean Baker's idea of work sharing -- reducing everyone's hours a bit instead of laying off somebody (and using UI payments to make up a portion of the wage loss) -- could help, though I doubt it's a "quick route back to full employment." Take up in states that already have it is low, and so this might be hard to scale up... still, we should try-this program also has a very high bang-for-buck in terms of preserving jobs.
These ideas were important before the release of today's jobs report. With the new information we now have, they're essential.
This post originally appeared at Jared Bernstein's On The Economy blog.
Jeff Madrick: Impact of Job Numbers Goes Far Beyond the Jobless
An American jobs effort to end government contracts rewarding corporations that ship American jobs overseas.
Build America Bonds to Create Jobs Now Act – leveraging public dollars to strengthen the private sector, growing our economy by rebuilding America’s schools, hospitals, and transit projects, supported by American businesses, the construction industry, mayors and governors.
American Jobs Matter Act – to give preference in federal contracts to U.S. manufacturers that create jobs here at home.
National Manufacturing Strategy Act, which calls on the President to lay out a plan to help ensure American manufacturers can compete, grow, and thrive.
Advanced Vehicle Manufacturing Technology Act to help ensure the cars of the future are built here in the U.S., by investing in a broad range of near-term and long-term vehicle technologies to improve fuel efficiency, support domestic research and manufacturing, and lead to greater consumer choice of vehicle technologies and fuels.
Currency Reform for Fair Trade Act to provide our government with effective tools to address unfair currency manipulation by countries like China, which could help create 1 million American manufacturing jobs by leveling the international playing field for American workers and businesses.
Motion to Recommit promoting jobs and innovation at home, and fairness abroad, by prioritizing patent applications from entities that pledge to develop or manufacture their products and technologies in the United States.
All voted down by the GOP
GOP bills to help increase jobs? ZERO!!
Over all, jobs in Mexico’s manufacturing sector increased 8.2 percent to 1.8 million as of January, the most recent figures available, driven mostly by what Mexican officials called regaining health in the auto and electronics industries, the engine of the economy along the border. Even Ciudad Juarez, which has both the highest level of violence and the largest number of maquiladoras, added 1.3 percent more jobs, to 176,824.
Mostly American-owned and in border states, the plants import raw materials duty free and export assembled products, lowering the cost of goods in the United States and providing jobs that pay more than the Mexican average (typically $8 to $16 per day on the assembly line) but a lot less than American wages.
Some of the new or expanding plants come at the expense of plant closings in the United States. Electrolux, which makes washers, dryers and other home products, closed a plant in 2009 in Iowa but opened one in Juarez last month that is expected to employ 400 people.
The liberals would have the Federal government spend MORE. And from whom do you wish to steal these dollars? The so-called "rich"?
If everyone making $115, 000/year or more were taxed at ONE HUNDRED PERCENT, it would not cover even one year of Obama's deficit spending. So what do you do for money??
money, currency, the whole construct we have in place is not working any more... read the news, from various sources.. the entire world is suffering economic collapse.. workers across the globe are losing their careers.. losing their homes, governments are going further into debt, and people are revolting... worldwide.
I support paying the worker top wages to begin with and stop pretending that people are not human and don't work to feed their family and want to be prosperous as well. It's been proven that better the boss & pay = better the worker=better the company which is good for the US.
We've got a toxic/greed thing that has taken root and Corps want slaves to work for them= bigger profits. It's not about human beings working together to build something anymore...it's all about profits for the investor, CEO and/or Owners. Those profits and CEO salaries are out of balance with what they should be and it takes more slaves at lower wages to keep them ...it's a house of cards. They can keep moving these Corps to find the cheapest labor and to resist paying US taxes but it can't last forever.
google " Resource Based Economy " .. read about it.. you might like what they say.
also, look for posts here by Eileenla ... she is very eloquent on this subject...
Peace, and good luck my friend.
We don't need more jobs. We've been happily eliminating jobs for centuries so we don't have to do manual labor anymore, but can truly focus on becoming a wisdom society. So....let's wise up and become THAT...rather than continue to try and focus on creating "make work" to "make money." We have lots of REAL work to do...whether it generates a monetary profit or not. Most of it is necessary to preserve and protect life on this planet, which ought to be reward enough for us all.
Ironically, we've DONE what we set out to do when industrialization began, which is reduce the amount of raw human energy it takes to build and maintain a society. And now that we're almost done building (having settled the entire planet) AND that we've expanded our population to an astounding 7 billion, the need to sell labor hours so we can purchase the freedom to ENJOY the free time we've gifted ourselves is hindering human evolution, not advancing it any longer.
We wind up frantically producing stuff nobody needs to create jobs nobody really wants to do to generate substandard wages so people can afford to survive...when what we should be doing is celebrating our success and figuring out how best to capitalize on that as a collective.
Sheesh. We humans can be SO stubbornly ignorant sometimes...!
how to do away with the concepts of ownership, nations, wars? .. the prize is right there... just beyond reach, within sight... we just need one collective reach.
We grow up, and discover that having long term goals and being willing to delay gratification is what grown-ups do. We recognize that all beings deserve to have access to their basic needs without having to pay for the right to tap into what mother Earth has provided for us at no charge. We discover that we don't need to be motivated by stuff and externally validated, and that intrinsically we long to do good, important things that serve a higher purpose then ourselves.
We relax and allow change to happen, knowing that change is inevitable, and that when we don't fight it it's oftentimes very good. We surrender to the not knowing, accepting that the first step on the journey to wisdom is admitting we just don't know...thereby allowing our half-empty cup to be spacious enough for new insights and knowledge to enter.
We become, rather than cling in fear to who and what we once were.
That too was mitigated by the great social contracts of the '60's, which enabled the sick, the poor, the elderly and minorities to receive government-sponsored safety nets and supplements for their survival. That cash flowed directly to corporate coffers, adding to the illusion that corporate profitability was doing "fine." Taxing wages paid for those programs, which worked until wages continued to collapse to the point where it didn't work anymore. That's because the federal money that was flowing to corporations wasn't flowing back to the people in the form of wages or real spending; it was flowing into the global casino known as the stock market. There it sits, 40% of America's GDP coming from financial services today - which is the business of using money to make more money, not real products or services.
I know; I used to work on Wall Street.
The problem is, people don't produce most goods and services anymore; machines and technology does, using fossil fuels to power the systems rather than human sweat and muscle and sinew. So with 7 billion people desperate to sell their energy to a system that requires less and less of it to produce more and more, we're left with a broken formula and a lot of desperate people.
Cut government spending and the entire economy collapses. Just watch...
people might wake up when we ... I don't know what to say here... I fear that enough of us will not see the light until it is too late.
We have been warned for many years by MANY that these treacherous days were coming; why are we now surprised? Our very Constitution is indeed threatened. It may turn out that the Supreme Court will have to rule on the debt limit debate. God help us all, that things have come to this.
These days won't really get treacherous until we, the people, get pertinent.
Watch out for the whirled peas.
We cannot stop trying to change our system for the better, and I believe that the very corporation that is our government is and should always be OURS to change it when needed. But, how do "WE" come to any agreements when all we do is attack and snicker?
When we start addressing openly HOW and WHERE to make changes, only then can constructive progress can be made. Any other comments beyond that scope won't change things at all. A proven fact.
Where do we start, to change our government for the better in a way consistent with those who came before us? I suggest we begin there.
I still can't see how Americans can be so afraid of incorporating a government yet so willing to accept the formation of a private corporation without limits or liability.
If the sovereign US government is going to grant such charters, they should be no less restrictive and carefully worded as the Constitution itself.
We could do that as an informed citizenry; using Art. 5 of the Constitution. Neither the Republican nor Democratic corporations will support that effort however and they will be our most formidable opponent until voters see the futility of two-party elections.
The Stimulus package was not the largest Keynesian experiment, in fact it was EQUAL to the TARP bailout for the banks. The largest experiment was the New Deal, under FDR. You know, the one where caring about the nation's citizens trumped greed?
The irony in the whole thing is big government got in the way of even bigger government. "Shovel ready wasn't as, uh, shovel ready as we thought" due to the oversight, regulation, and red tape imposed by the government. If the government can't get projects up and running in a timely manner how is a private business supposed to?
Welcome to the Obama Economy.
"Fundamental Transformation" indeed!
1995-2007 Republicans controlled Congress, Singapore and Indian Free Trade Agreements were passed and massive outsourcing really took off.
2000-2009 G.W. Bush Republican President, reduced taxes while starting 2 Trillion Dollar Wars of 'Nation Building.' T.A.R.P. Bailout was pushed by Henry Paulson and Bush in October of 2008.
This economy was put in motion by the Republican leadership that deregulated the banking industry and Wall Street's Exotic Financial derivatives. Obama has been in office since january 2009, it is less than 3 years later, and you expect it all to be fixed immediately?
Your Naivete suggests that Instant Gratification is nearly fast enough for you.
Nope, it was the war. So unless you are prepared to have another world war, there is no reason to suspect that this ISN'T the new normal.
After all, half of the EU countries run 7%-10% unemployment as their "normal": Why should we think we're special?
As for turning on a dime... That was Obama’s promises after the stimulus. That is why he is dramatically losing credibility now.
The official unemployment rate is 9.2%. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is U-6.
While the "official" unemployment rate is an unacceptable 9.2%, U-6 is much higher at 16.2%.
Things are much worse than the reported numbers would have you believe, and for the second consecutive month the beneath the surface numbers were simply awful.
U3 rose from 9.1% to 9.2% while U6 rose from 15.8% to 16.2%. Thus, the official measure rose .1, while the alternative measure rose .4.
This is an "artifact" of 272,000 people dropping out of the labor force this past month.
Also note that the unemployment rate is barely better than it was a year ago. It would actually be worse than a year ago were it not for people dropping out of the labor force.
For greater perspective, fewer people are now employed that in 2011 when, yes, G.W. Bush, boy genius brought us the economy "Texas Style."
This was a pathetic jobs report.
I think you mean "2001"...
Also, where does the U-6 number come from? I'd heard that unemployment was actually higher, better never knew it had a name (or actual stat).
Thanks.
U-6 is published as part of the complete monthly report of the Bureau of Labor Statistics ( BLS). You can access the data at their site. Best Wishes.
Wouldn't it be wonderful if the media were reporting this.
http://www.zerohedge.com/article/exclusive-feds-600-billion-stealth-bailout-foreign-banks-continues-expense-domestic-economy-