In brief: The Bureau of Labor Statistics' household survey shows unemployment at 8.6 percent, and the payroll survey shows 120,000 new jobs in November (140,000 from the private sector, and a loss of 20,000 in the public sector). BLS also revised upward its job numbers for September and October.
What does it mean? We're not out of the woods but we might be seeing some daylight.
Maybe. Here's what you need to worry about:
First, this rate of job growth is barely enough to keep up with the growth in the working-age population. So we're not making progress on the backlog of more than 13 million jobless Americans, and another 11 million working part-time who'd rather have full-time jobs.
Second, retail jobs constituted a third of new private-sector employment in November. Retail jobs tend to be unstable, temporary, and low-paying. Although the BLS is supposed to adjust for seasonal employment (i.e. Christmas), it doesn't take account of the fact that more and more Americans have been pushing up their Christmas buying to before Thanksgiving. So some of these jobs may not be around very long.
Third, the jobless rate fell partly because around 350,000 people who had been looking for jobs dropped out of the job market in November. Remember: If you're not actively looking, you're not counted as unemployed on the household survey.
Fourth, hourly earnings are down, as are real wages. So to some extent Americans have been substituting lower wages for lost jobs -- either by accepting lower wages at their current place of employment, or getting the boot and settling for lower wages elsewhere. A job is better than no job, of course, but a job with a lower wage isn't nearly as good as a job with at the same or better wage.
Fifth, another reason for November's job growth is that American consumers -- whose spending accounts for about 70 percent of the economy -- increased their spending. But this can't continue because, as noted, wages are dropping. They spent more by cutting into their meager savings. Don't expect this to last.
Finally, there's the wild card of the rest of the global economy -- the European debt crisis and the high likelihood of recession in Europe, the slowdown in China and India, slower growth in developing nations. Some of our jobs depend on exports, which will drop. Others are keyed to the financial sector, which is being hit directly.
Two final wild cards closer to home: The Fed, and Congress. The Fed meets in two weeks to decide on further monetary easing. With today's report, the odds of easing are down, unfortunately. Believe it or not, several Fed members are worried about inflation.
And if Congress refuses to extend the payroll tax cut and/or unemployment benefits by December 30, it will create another drag on the economy. When people ask me what Congress is likely to do I always say the same thing: The odds are in favor of nothing.
So while today's jobs report is in the right direction, it's way too early to break out the champagne.
Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.
Follow Robert Reich on Twitter: www.twitter.com/RBReich
Wall Street ain't Main Street, Exhibit #635374 and counting.
We should understand that as a result, PRODUCTS, SERVICES will go up to an extent but not to levels that are unaffordable...as long housing and rent can be stablilized while wages are substantially increased, more of us will spend more money, become more autonomous, cause less crime...there will be less unemployment insurance spent, more creativity...innovation...and more mobilization among individuals. Damn it RR, please speak about these points already. I know you wrote a few books about wages including a few articles, but sir, YOU NEED TO PRESS THIS ISSUE PERSISTENTLY. C'MON !
Next would be to index what, exactly that living wage would represent. It should include food, shelter, transportation, health care and all such essentials necessary to function in our society. The current "minimum wage" concept effectively requires significant subsidy (housing, health care, food stamps, etc), which significantly contribute to taxes at all levels.
The challenge is that to make it all work. To prevent costs from simply indexing up, fueling inflation and leaving folks in the same predicament, all sorts of other controls, limits and tax revisions would be necessary.
In a toxic political environment where Congress will not agree on anything, lest the "opposition benefit", this will, sadly, be very difficult to achieve.
you mean like that?
Teapublicons and the return of Bushonomics.
I don't know that there's a lot of opportunity for people to move up the skills ladder. Most low wage jobs offer little chance for advancement. A small handful will advance but the rest won't. There just aren't that many jobs out there, especially not jobs that pay living wages.
I dont disagree that employers should go back to in-house training. That's what employers used to do. A friend of mine was hired as a teacher by one of the big three auto companies. The company tells her what they want taught in math and computer science and she teaches it. So it's not that it isn't being done at all, but there's a lot less of it than there used to be.
While I knew many fathers that worked in retail, none of them supported a family on just that one income. Even with help they had very little.
Keep in mind that most houses didn't have many closets and that was because it wasn't needed. Today even the poor have a lot more than the poor I knew. I went to school with kids that lived in "structures" that didn't have any paint left on the outside. Many did not have indoor plumbing. Their parents did work. They worked in factories, and they worked in sales.
If a person decides to risk their capital to open up a store they have every right to make a profit and frankly this notion that there should be limits is really screwed up. They didn't have to open the store in the first place. They are under no obligation to start a business.
Over my lifetime I have worked for many small businesses. I would not say any of them were "generous", but then I never expected them to be so. If I was unhappy I could start my own business just like they did and thus make more.
Friends who are engineers or IT types with years of professional experience can go for two or three years without finding anything, or if they do, it pays half of what they made before for the same type of work.
I'll also make the point that until the crash, most of those now unemployed were gainfully employed. They didn't all lose their skills in 2008.
There is a group from Silicon Valley that has been touring the nation for a few months looking for engineers. I think the Huffpost has had a few of these articles. In one article, they had a journalist follow this group during the process. The group said it was very hard to find technical help they needed.
Those professionals said that the good ones are already working and nobody wants to let them go. So I would say they disagree with your assessment.