Today’s jobs report—120,000 new jobs created in March—underscores what we have been arguing for months: We must have a dramatic increase in the investments we need to make in infrastructure, education and other fundamentals of economic growth. The right-wing effort to keep this from happening is stalling our recovery.
“The March jobs report should set off alarm bells,” says Robert Borosage in his reaction to today’s report. “Yes, the economy continues to grow which is a good thing. But growth at this rate barely keeps pace with new people coming into the labor market.”
We’re falling farther behind the pace at which we should be creating jobs. To get the unemployment rate down to 5 percent by the end of 2014, we needed to have created 563,000 more jobs than we have since January. (Using the “jobs calculator” developed by the Federal Reserve Bank of Atlanta, we estimate that the economy will have to create an average of about of about 400,000 a month in order to lower unemployment to 5 percent by the end of 2014.)
Also, the most current Job Openings and Labor Turnover Summary from the Labor Department, released March 13, reported 3.5 million job openings in January. With 12.7 million unemployed (5.3 million unemployed for more than 26 weeks), there is still only one job opening for every four unemployed people. No one can claim that in today’s economy there are enough jobs for people who want them.
Thanks to a 164,000 decline in the number of people counted in the labor force, the unemployment rate declined to 8.2 percent in spite of the anemic jobs growth. The combined unemployment and underemployment rate, which includes people working part-time who actually want full-time work and persons marginally attached to the labor force, is 14.5 percent.
Borosage goes on to say:
“Washington should be focused on jobs, not cuts. Yes, the stock market is up, corporate profits are up, CEO pay is soaring. But wages are losing ground, housing values continue to sink, and foreclosures are rising. The recovery has come for the few, but not for most Americans. And with youth unemployment at 25%, the young are graduating from school into the worst jobs market since the Great Depression.
“Federal Reserve Chair Ben Bernanke was right last week when he said the economy does not have the foundation for growth at a rate that we want – and these disappointing jobs numbers illustrate that. We need action now; instead we see a Republican Congress intent on stifling the little recovery we have. With interest rates near record lows, the construction industry on its back, and our decrepit infrastructure increasingly costly, we should be launching a major project to rebuild America and put people to work. Instead, the Republican Congress can’t even pass a modest transportation construction bill. With young people idled at the beginning of their work lives, we need direct government programs – a jobs corps, a green corps, an urban corps – to put them to work.
“Washington seems dangerously close to repeating the mistakes of 1937, moving prematurely to reduce deficits and constrict monetary policy, when the economy has not yet gained sufficient momentum to continue to grow. In 1937 that folly pushed the economy back into recession. In today’s Europe, austerity has had the same effect. We should not ignore the lessons of history and experience.”
Dave Johnson earlier today posted a challenge to House Republicans “to show they aren’t just sabotaging the economy to improve their own election prospects.” They should move on a long-term transportation and infrastructure bill—at a minimum, the two-year spending authorization the Senate passed in March—that has stalled in the House all year.
The consequences of that stalling are clear: There were 7,000 jobs lost in the construction industry in March, in spite of unusually warm late winter/early spring weather in much of the country. One reason is the inability of state transportation departments to move forward on long-range construction projects as federal funding gets snarled in an ideological dispute between Tea Party and establishment factions among House Republicans.
As Dave notes, “investing in infrastructure costs less than the cost of high levels of unemployment: the lower tax revenues, loss of business activity, and all of the forms of government spending resulting from slow growth and increased joblessness.” But the House Republican budget by Rep. Paul Ryan would actually reduce the funding available for infrastructure spending and other investments key to job creation and economic growth.
“Show me a business leader who wouldn’t profit if more Americans could afford to get the skills and education that today’s jobs require,” President Obama said earlier this week in an address to newspaper editors. “Ask any company where they’d rather locate and hire workers—a country with crumbling roads and bridges, or one that’s committed to high-speed Internet and high-speed railroads and high-tech research and development?”
That’s why a Progressive Caucus proposal that would have committed $556 billion in transportation and infrastructure projects made sense, and is overdue. That, in combination with other initiatives that totaled about $2 trillion, would have created millions of jobs over the next three years. The multiplier effect—as more people are employed through government spending, their increased income supports even more private-sector job creation—would likely have been enough to close the gap between where we are today and where we need to be to dig out of the economic hole created by the economic crash.
What we have to reject is the kind of conservative austerity, embodied in Ryan’s House Republican budget and supported by virtually the entire House Republican caucus, that would cost the economy millions of jobs. The need to make that case is now more urgent than ever.
Updated 9:55 a.m. with statement from Robert Borosage and additional links.