The headline jobs number of the Bureau of Labor Statistics October jobs report –204,000 new jobs – is higher than expected, given that the report covers the time of the government shutdown. Although the report notes that furloughed federal workers were largely recorded as employed in the survey, the jobs number is likely to encourage the Federal Reserve to begin cutting back – tapering – the $85 billion a month it is pumping into the economy to keep it afloat.
But under the headlines, the report paints a bleak picture of an economy that is going nowhere. Over the last year, from October 2012 to October 2013, the population (for the BLS the “civilian non-institutional population”) increased by 2,398,000. The number not in the labor force increased by 3,134,000. That is, the percentage of the population that is working – the employment-population ratio – declined over the course of the year, and remains far below pre-recession levels.
This country is mired in a continuing jobs calamity. Yet the Congress is focused not on jobs, but on more spending cuts that will reduce jobs – and the Federal Reserve is considering cutting back its extraordinary measures. These policies offer no exit. For the long-term unemployed — still over 36% of those looking for work – the cost in dulled skills, lost homes, hopes dashed is incalculable. For the economy, as Federal Reserve researchers now estimate, the cost has already reduced our economy potential by $1 trillion a year.
Congress should repeal the mindless across the board cuts imposed by sequestration which make no distinction between waste and essential. And its budget negotiations should focus on generating jobs by investing now in areas vital to our future – like rebuilding our infrastructure, or hiring the teachers we need. The Congress can pay for a bold effort simply by repealing the tax breaks that encourage companies to transfer jobs and shelter profits in tax dodges abroad. More austerity will do nothing to put people to work or to heal this economy.