The February Bureau of Labor Statistics jobs report – 175,000 new jobs with unemployment remaining at 6.7 percent – is better than many feared, but reveals a slow-growth economy that is failing to reach the more than 20 million Americans still in need of full-time work.
The jobs figures will be blamed in part, no doubt, on the harsh winter, but Mother Nature is far less at fault than feckless politicians. (The BLS largely discounts the impact of the weather: see question 8).
As The Bondad Blog details, the termination of jobless assistance to 1.3 million long-term unemployed workers in January (reaching 2 million by the end of February) is a significant hit to consumer demand (cutting $1,200 a month to 2 million people), economic growth and employment. Its effects will be felt throughout the year, but are front-loaded to the first months as over a million have lost essential support.
For all the hoopla about the budget deal, the federal budget continues to follow a course of austerity. Deficits are dropping faster than any time since the demobilization after World War II. This costs public jobs directly – federal government employment was down 6,000 in February – and private jobs through the squeeze on contractors, declining grants to states and localities, and more.
Our unsustainable trade policies continue to rack up deficits of over $1 billion a day, while our unimaginable tax policies continue to provide corporations with multimillion-dollar incentives to ship jobs and report profits abroad. It is the purest measure of Washington corruption that the $2 trillion corporations have stashed abroad to avoid taxes is not being taxed to pay for rebuilding our decrepit infrastructure and put people to work.
Underneath the headline unemployment number, the underlying trends remain bleak. The number of long-term unemployed remains at a near-record 37 percent of the unemployed (and increased in February). The labor force participation rate (63 percent) and the employment-population ratio (58.8 percent) were unchanged from a month ago, and little changed for the year. We are not generating the jobs we need to put America back to work.
This week, incoming Federal Reserve Chair Janet Yellen warned that “too many Americans still can’t find a job or are forced to work part-time.”
“The goals set by Congress for the Federal Reserve are clear: maximum employment and stable prices,” Yellen went on. “It is equally clear that the economy continues to operate considerably short of these objectives.”
With the Federal Reserve slowly rolling back its extraordinary purchases of securities, this is an implicit plea for Congress to step in. But Republicans in Congress continue to staff roadblocks to recovery for partisan gain. The president’s modest budget plan for an investment package paid for by progressive tax reforms has already been scorned as dead on arrival. Millions of Americans pay the price of this folly in unemployment, smashed hopes and stagnant wages.