Daily Archives: May 11, 2011

Can We Create Enough Jobs?

I opined yesterday about the possibility that the USA will become a country of McWorkers. And even my gratuitous reference to Pippa didn’t create a firestorm among readers. Maybe we’ve given up on the notion of significantly reducing unemployment. And maybe we can’t create enough jobs — especially ones that provide some measure of security, benefits and adequate pay.

This just isn’t the early morning rant of a pajama-clad citizen journalist. Two writers with big megaphones — Arianna Huffington and Katrina Vanden Heuvel — shouted about the same issue in separate opinion pieces yesterday and this morning.

Here’s from Heuvel’s WaPo article, “Why aren’t the powers that be tackling the job crisis?“:

Washington is the only city in America where housing values are going up. That may help explain why the political class is so divorced from the nation’s agonies. Sure, the entire nation celebrated the dispatch of Osama bin Laden, but when it comes to the economy, the Beltway is a world unto itself.

Two years from the official beginning of the “recovery,” America continues to suffer a deep and punishing jobs crisis. One in six Americans of working age is unemployed or underemployed. College students, laden with record levels of debt, are graduating into the worst jobs market since the Great Depression. Long-term unemployment is at unprecedented levels. At current rates of job growth, we won’t return to pre-recession employment levels until 2016. And the jobs that are being created — largely in the service industry — tend to have lower pay and benefits than the jobs that were lost.

Then she criticizes leaders in both parties — Republicans first but with the Democrats taking a turn at bat as well — for doing just about everything but advancing realistic proposals to create jobs.

As Ezra Klein of The Washington Post noted, it is a measure of Washington’s remove from the country that the two plans were unveiled by the two bodies with the least power to make anything happen — the minority House Democrats and the minority Senate Republicans. Those who do have the power — the White House, the House Republican majority and the Senate Democratic majority — remain silent about jobs. Instead, they are locked in a macabre dance to the death on deficits — oblivious to the human casualties caused by mass unemployment.

This might be diversionary, at best, were America not in such dire straits. Home values are falling again. Wages aren’t keeping up with prices. States and cities are laying off more employees. The trade deficit is rising, despite the lower dollar. Masked by the statistic of 9 percent unemployment are 25 million people in need of full time work. Mass unemployment, particularly in a society like ours with such a limited safety net, is a tale of misery, one that resounds across the country and goes virtually unheard in our capital. Americans think Washington isn’t listening — and they are right.

Next up, Arianna Huffington, writing “If American Can Do Whatever We Set Our Mind To, How Come Our Leaders Won’t Set Their Minds On Jobs?

“We do big things,” President Obama said during his State of the Union speech in January. And, in fact, we do. Sometimes. Finding and dispatching Osama bin Laden certainly qualifies. “We are once again reminded,” the president said after announcing the terrorist’s death, “that America can do whatever we set our mind to.”

But if that’s true, why are our leaders so accepting of a stagnant economy? If they really focused on the havoc it is wreaking on the lives of tens of millions of Americans, they would, in the memorable words of Richard Clarke, be running around with their hair on fire.

But they’re not. Instead, they express concern but resign themselves to the fact that, as White House economic adviser Austan Goolsbee put it in an interview with HuffPost, the economy has “a long way to go.” Meanwhile, we’re being asked to accept years of underemployment, low growth and draconian cuts to America’s social safety nets as the “new normal.” Or, as Bill Clinton put it in a different context, the “tyranny of low expectations.”

It’s a testament to these low expectations of our leaders that we’re supposed to take recent economic figures as some kind of good news. In March, the economy added 216,000 jobs and the unemployment rate fell from 8.9 percent to 8.8 percent. Not bad. But not good, either. And if you take a closer look at the numbers, you’ll want to keep that celebratory champagne on ice. Because while adding jobs is obviously better than shedding them, even if we continue to add 200,000 jobs a month, it would take until 2019 to achieve the employment level we had when the recession started. “There are still five unemployed workers per job opening,” Heidi Shierholz, economist with the Economic Policy Institute, told HuffPost, “far worse than the worst month of the early-2000s recession.”

What’s more, much of the downturn in the unemployment rate was actually caused by people giving up and leaving the workforce. As the New York Times noted, participation in the workforce fell to 64.2 percent, the lowest mark in 25 years. If you were to factor those who have stopped looking for work into the official unemployment rate, it would be 9.8 percent. If you were to include those working part-time who would rather be working full-time, it would be 15.7 percent. “Being happy with the falling unemployment rate right now,” said Wells Fargo’s Jeremy Ryan, “would be like being happy that your team won because the other team’s bus broke down on the way to the field.”

And the point?

How are these not hair on fire numbers?

Yet our leaders, who are supposed to be doing big things, seem instead to have made their peace with “the new normal.” Take the Fed: it could be doing a lot more to create jobs, but instead it’s guarding against the phantom bogeyman of inflation. “Why has Mr. Bernanke decided to accept widespread unemployment for years on end, even though he believes he has the power to reduce it?” asked David Leonhardt. “After all, does the economy feel as if it’s on the verge of overheating?” Hardly.

At the New America Foundation’s conference about the Federal Reserve, the Peterson Institute’s Joe Gagnon said that the Fed’s timidity is responsible for the loss of 1 million jobs. “Apparently,” writes Mark Thoma, “the millions and millions of people who are unemployed, some of whom won’t be reemployed until years from now if we do nothing to help, are supposed to be patient because people with power over policy are worried about inflation and higher interest rates.”

Our elected leaders aren’t any better — less focused on the job crisis than on arguing about how to best divvy up harsh cuts to the social safety net and programs that benefit the middle class. Meanwhile, profits for the Fortune 500 jumped by 81 percent in 2010, to $318 billion. Clearly big things aren’t out of reach for everybody.

OK. I know that we have a number of important issues — none with easy answers — that we have to deal with: federal debt and spending, taxes, health care, education, immigration, and the threat to our nation’s security at home and abroad among them.

But I hope the elites Inside the Beltway and elsewhere haven’t given up on the need to create enough jobs to get our country back working again.