Jobs Report: Proof Right-Wing Obstruction Is Choking Recovery

Today's unemployment report, reflecting an anemic increase of only 69,000 new jobs in May and an unemployment rate up to 8.2 percent, is the best evidence yet that conservative obstruction measures that would put Americans back to work is crippling the economy.

That obstruction, reflected in the past few months in the failure of the House to pass a long-term transportation and infrastructure bill and the refusal to move even the Obama administration's modest proposals to prevent state and local government layoffs, has resulted in de facto austerity economic policy.

Our co-director Robert Borosage had this to say [1] about today's report:

“This month's jobs report confirms what we already know: mass unemployment and its harsh human misery remain the fundamental challenge facing America. Across the board, jobs growth is halting. Layoffs of public employees at the state, local, and now the national level are a continuing drag on the economy. If the public sector employed as many workers today as it did on the eve of the financial collapse, 600,000 more people would be employed, and our unemployment rate would be about a percentage point lower.

“Businesses, sitting on record profits will not create jobs when there are no customers in sight. Mass unemployment, declining household incomes and collapsed housing values force Americans to tighten their belts. In this situation, it is vital that government act to help bolster demand, put people to work, and get the economy moving. The President has called for action on a jobs plan that would include measures to rebuild our infrastructure and put a devastated construction industry to work, aid to states and cities to rehire police and teachers, direct programs to hire veterans, and tax reforms that would reduce the incentives companies have to move jobs abroad.

“Instead the Republican Congress insists on ever deeper cuts at the federal level, while reducing aid to the states. They have even obstructed passage of a transportation bill that has always had bipartisan support and is strongly needed. Layoffs of public employees add to the human toll the recession takes, while hurting the economy. As Great Britain has shown, austerity in the midst of recession is self-destructive. This is leech economics. Like the Medieval practice of applying leeches to convalescing patients, it causes pain without benefit. It adds to human suffering, driving the economy into recession which ends adding to deficits, and worsening the ratio of debt to GDP. It is time for government to act.”

One cost of conservative obstruction is the loss of 28,000 construction jobs. Those are workers who would likely be on the job if the House had at least adopted a transportation spending bill that was passed by the Senate earlier in the spring. Instead, that bill is stalled in a House-Senate conference, and hundreds of state transportation projects are being stymied because there is no long-term federal funding commitment.

Also in May 13,000 public sector jobs were lost, including 8,000 state and local government jobs. The Wall Street Journal noted Thursday [2] that if state and local government payrolls had remained stable since December 2008, the unemployment rate would be 7.1 percent today instead of more than 8 percent.

The austerity policies that congressional conservatives hunger to impose on the United States continue to be an epic failure in Europe. The unemployment rate in the Eurozone [3] was reported Thursday to be 11 percent, a record high. Governments imposed a harsh regime of government budget cuts in an effort to lower deficits, and all those cuts did was put people out of work, making it even harder for those governments to close those deficits.

With congressional Republicans continuing to vow that they would oppose any effort to increase government spending to put people back to work—House Majority Leader Eric Cantor dismissed any new government initiatives this morning on CNBC [4]—we are in effect repeating the Eurozone failure. It's not to the same degree, but it is still the same wrong direction.

At the beginning of the year I set a goal of 5 percent unemployment [5] by the end of 2014. Meeting that goal would require the economy to produce on average 400,000 jobs a month. As of this month, we're more than 1.1 million jobs behind.

If we had in place the measures outlined in the Congressional Progressive Caucus' budget [6] for investing in the economy, including a six-year transportation and infrastructure program, aid to put laid-off state and local public servants back on the job, and projects ranging from fixing school buildings to stepping up investments in renewable energy, most if not all of those 1.1 million people would be working today, and we would be having a very different conversation about the state of the economy.

When Republican presidential candidate Mitt Romney says today's jobs report reflects the failure of Obama administration policies, remember that even the Recovery Act that President Obama did get through the Congress was mortally compromised: It was not nearly big enough to address the crater left in the economy by the Great Recession (or as Paul Krugman calls it, the Lesser Depression) and half of the stimulus took the form of tax cuts that had less stimulative effect than the direct spending.

Today's real lesson is that the de facto austerity that is the fruit of conservative obstruction is choking our economy just as it has choked the Eurozone. The faster that America can end the trip down this conservative austerity road, the better.