The monthly Bureau of Labor Statistics jobs report offered good news with 242,000 new jobs created in February, while headline unemployment remained at 4.9 percent. February marked a record 72 months of private sector jobs growth, with some 12.5 million more jobs now than at the official end of the recession in June 2009.
We’ve come a long way, but have far to go. There are 15.6 million Americans still in need of fulltime work. The Hamilton Project estimates that at current rates, we won’t reach the 2008 level of employment – factoring new entrants – until mid-2017. The labor force participation rate – the percentage of the population either employed or actively looking for work – ticked up to 62.9 percent, but remains near 1970s levels when women first began to enter workforce.
More tellingly, Americans are still waiting to feel the rewards of growth. Wages are barely stirring; the average hourly wages of non-supervisory private sector workers remained unchanged from the previous month and is up little more than 2 percent (2.2 percent) over the year. The wealthiest 1 percent continue to capture virtually all of the income growth in the society.
Worse, what growth we enjoy faces growing global tempests. Trade deficits have widened as exports have fallen, with weak global demand and a strong dollar. The oil glut has devastated investment in energy. Business investment is lagging in the face of weak demand for goods.
America faces a world of slowing growth and spreading misery. The conservative global economic institutions – the Organization for Economic Co-operation and Development (OECD) and the International Monetary Fund, often peddlers of austerity – warned the G-20 Shanghai meeting of the world’s largest economies of the urgent need to “act now.” The IMF urged “bold multilateral action,” warning of “higher risks of a derailed recovery” at a moment when the global economy is “highly vulnerable to adverse shocks.” For the IMF, this language is the equivalent of a full-throated scream.
The central banks have exhausted monetary policy, with interest rates lurching into negative territory in Japan and the European Central Bank barely able to keep the economy from sinking. What’s needed, as Martin Wolf of the Financial Times wrote, is a break from the “lunatic” obsession with austerity, with Germany and the U.S. and others increasing public investment. It is time to get ready for “helicopter money,” with the Federal Reserve directly financing an infrastructure bank to rebuild the country.
The children at risk from the water in Flint, Michigan dramatized how dangerous our aging and decrepit public infrastructure—water systems, rail lines, bridges and dams, schools and more. There is work that desperately needs to be done. Yet, at last night’s clown revue of Republican presidential contenders, all recited the same failed formula of top-end tax cuts, spending cuts, deregulation and throwing millions off health insurance (repealing Obamacare) as the key to growth. But the rich have more money and the corporations more profits than they know what to do with. Investment lags from lack of demand amid a savings glut. And we’ve seen what deregulation can do from the financial collapse in 2008 to the failures in environmental protection in Flint.
The administration, intent on selling progress, raises no alarms. Treasury Secretary Jack Lew told the G-20, “Don’t expect a crisis response to a non-crisis situation.” Apparently the Treasury Secretary thinks there’s no need to start paddling hard against the downward currents until we go over the cliff.
This should be at the center of our debate. Presidential candidate Bernie Sanders has called for a major – $1 trillion over five years – initiative to rebuild America. Hillary Clinton has offered up even less than President Obama’s budget. Republicans remain wedded to trickle-down voodoo. It would be nice if the moderators of the presidential debates on Fox News and CNN could forego asking insipid “gotcha” questions on occasion, and challenge candidates about what they would do to meet the growing threat of a renewed global economic crisis.