The April jobs report of the Bureau of Labor Services is sobering. The mediocre jobs number — 165,000 new jobs or barely enough to cover new entrants into workforce — is a self-inflicted wound. Government austerity — tax hikes and spending cuts — is suffocating the economy, just when it needs air.
And the perversity will get worse. The sequester cuts are only now beginning to hit. Austerity is driving Europe deeper into recession. China is slowing. US exports will suffer. And Washington is about to descend into new self-manufactured crises around next year’s budget and the debt ceiling.
The partisan trench warfare takes human casualties. Over 20 million people are in need of full-time work. 37% of the officially unemployed have been out of work for more than 27 weeks. Wages of those who are working are not keeping up with prices.. Families are losing their homes. Marriages break under the strain. The young are idled; their hopes crushed. Americans are paying a terrible price for Washington’s folly.
A look deeper into the numbers dispels illusions. Construction is reviving we’re told. But construction employment is down for the month, up 3.8% for the year and not near recovering 2007 levels (B-4 BLS establishment survey of weekly payrolls). Companies are “insourcing” to the U.S., we’re told. But manufacturing weekly aggregate payrolls were down for the month, and up a paltry 1.3% for the year, and still below 2007 levels. Government job cuts — down 89,000 for the year — are likely to get worse before they get better. Government employment is down 11,000 for the month.
The basic measures of employment show an economy that is dead in the water in terms of employment over the course of the last year. The civilian labor force participation rate at 63.3% is basically unchanged from the 63.4% in April of 2012. The employment-population rate at 58.6% is basically unchanged from the 58.5% rate of a year ago.
For workers, the economy is at best treading water. The Federal Reserve keeps sending out life rafts — and the Congress keeps letting the air out of them. This folly cannot go on.
It is time for Washington to add fuel to the economy, not starve it. The president made sensible jobs proposals in his State of the Union address – calling for spending now to rebuild our aged infrastructure, put teachers back to work, expand pre-school, retrofit buildings for energy efficiency. Congress should act on these, and expand on them.
The illusions about austerity are shattered. Its intellectual foundations have been exposed as fraudulent. Everyone understands that austerity is costing jobs. Even conservative Republicans complain that the sequester is costing jobs in the military or in their districts. Now the only question is whether the Congress can rouse itself to act rationally in the midst of this ongoing national crisis.