Public Sector Pink Slips Undercut Jobs Growth

Isaiah J. Poole

Two steps forward, one step back. That’s what we keep doing on the jobs front as long as we allow conservative budget austerity to drown out efforts to keep the jobs-producing machine revved up.

The private sector generated a net increase of 230,000 jobs in March, according to the Bureau of Labor Statistics. But that was accompanied by a loss of 14,000 public sector jobs. Since the beginning of the year, 86,000 federal, state and local government workers have lost their jobs.

And while the growth in private sector at least on the surface appears robust, it is still a foreboding job market. The most significant jobs growth is not in the “breadwinning” jobs that pay a living wage for a family. Leisure and hospitality businesses created 44,500 of the jobs; another 28,800 of the jobs were in temporary help services, and 17,700 were retail jobs. In the past year, average hourly earnings of hourly workers in nonsupervisory positions have inched up just 37 cents in the past year—enough to keep up with general inflation, but not much more.

Also noteworthy is the fact that the employment-population ratio remains essentially unchanged at 58.5 percent. That percentage has actually fallen since March 2009, when it was 59.9 percent. Economist Alan Krueger, looking further back in time, noted earlier this week that the ratio hasn’t reached its peak of 64.7 percent since before the 2001 recession. “What this indicator tells me is that we weren’t creating enough jobs long before the recession that began in December 2007. If this pattern holds, even in recovery, it points to a much deeper and disturbing problem for the U.S. economy,” he wrote.

The Campaign for America’s Future Roger Hickey had this to say about today’s unemployment report:

These numbers are moving in the right direction, but even if jobs continue to grow each month by 216,000 new jobs. It will still take years to replace the jobs lost in the worst recession since the Great Depression. Today’s numbers might get economists excited, but if you are an American without a job, they won’t put food on the table.

To no one’s surprise, the federal and state governments are sending out pink slips. This means cops, teachers and firefighters are losing their jobs at a time when there are no other jobs available. The economy is not firing on all cylinders, which is why this is the worst time to lay off middle class Americans. That will slow the growth of the economy. The best way to decrease the deficit is to get unemployed Americans back to work.

Heidi Shierholz at the Economic Policy Institute today has a similar take on the jobs report.

The reality check in this report is the larger context; given the size of the gap in the labor market, even at March’s job growth rate, it would still take until around 2018 to get back to the pre-recession unemployment rate. In other words, as a snapshot, this report looks quite good, but given where we are, we need to see this and more in the coming months.

It’s always good news when the ranks of the unemployed are reduced by 216,000 in a single month. But this is not a time to relax the effort to keep the right from sabotaging the economic recovery with its slasher approach to government spending.

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