The Bureau of Labor Statistics reports a net gain of 162,000 jobs for July, somewhat below the slow growth we’ve witnessed over the past months. The decline of the official unemployment rate to 7.4 percent will be celebrated – as were “higher than expected” reports that the economy grew all of 1.7 percent in the second quarter of the year. But this is a report, like previous ones, that reveals a slow growth economy that offers no relief to working families.
Job growth surely is better than job loss. But this rate of growth isn’t lifting working families. We still have more than 22 million people in need of full-time work. While the official unemployment rate edged down, the BLS reports that the percentage of potential workers in the labor force – the labor force participation rate – remained low at 63.4 percent and the employment-population ratio was unchanged. Things aren’t getting worse, but workers will find no relief in this rate of growth.
Once again, more of the net jobs being created were part-time rather than full-time. The number of people forced involuntarily to work in part-time jobs – more than eight million – edged up marginally in seasonally adjusted figures. Average weekly earnings dropped slightly from June, and this will insure continued downward pressure on wages.
What slows the recovery? Jobs growth occurred in many sectors of the economy, but was still led by low-pay areas of retail trade and food and services. For all the talk about “insourcing,” manufacturing showed no net gain, and, in the words of the BLS, “has changed little, on net, over the past 12 months.”
Local government has begun to hire again, but both state and federal governments – still pursuing an austerity policy proven bankrupt in practice and in theory – continue to shed jobs.
We need faster growth and more jobs. In a rational world, Washington would get the message. It would respond to the pleadings of the Federal Reserve, the International Monetary Fund, the G-20, and end the austerity regime. It would repeal the mindless sequester cuts and invest in areas vital to our future — from inescapable repairs and modernization of our transportation, sewage and other infrastructure to education, from preschool to affordable college. It could pay for those investments with measures that would help generate growth at home – from closing the loopholes that lead corporations to move jobs and stash over $1.2 trillion in tax havens abroad to a financial transaction tax that would slow destabilizing high-speed gambling in financial markets.
At the very least, it would stop being a drag on an economy that is not generating the jobs we need. Yet, Washington is headed into another brutal self-manufactured crisis over the budget and debt ceiling. Once more, Republicans are threatening to hold the economy hostage for deeper cuts – and a repeal of Obamacare. American families pay the price of this posturing.