The August job numbers — a disappointing 96,000 net new jobs for the month – only reinforce the need for greater action on jobs. At this rate, new job creation is not sufficient to cover the people coming into the jobs market.
Worse, the economy faces severe hurdles ahead. Manufacturing employment is down by 15,000, and the deepening recession in Europe and downturns in China and elsewhere are only beginning to be felt. Government employment is down (state and local governments shed 10,000 jobs in August), and the cuts at the federal level have only begun to be made.
Still worse, Washington is headed into a jobs cliff after the election, with the impending negotiations over the sequester and the scheduled expiration of extended unemployment insurance, the payroll tax cut and the Bush tax cuts.
Any notion of a “grand bargain” must begin with action on jobs. Putting people to work is the first and necessary step to deficit reduction. Europe’s growing miseries provide clear warning of the folly of inflicting austerity on an economy scarred by mass unemployment.
The election campaign makes action unlikely. But when it convenes this month, Congress would be well advised to take up the Obama administration’s American Jobs Act, and to take bold steps to put people back to work.