Saturday, December 16

Is The U.s. Job Market Improving?

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The numbers the government hands us about unemployment specifically and jobs in general are, at best, misleading. The headline will say that jobless claims dropped or some impressive numbers of new jobs were created in the past month. They use the number of claims for unemployment benefits as part of the algorithm to determine the unemployment rate. The banner will say something like “Jobless claims drop to 465,000.” We are somehow expected to believe that if “only” 465,000 people lost their jobs, it is good news. Often on the same page there will be another story with a banner proclaiming “76,000 new jobs created.” What they do not tell you in that news article is that we need 176,000 new jobs created every month just to stay even with population growth. Which means 76,000 new jobs translates into a net loss of 100,000 jobs.

The people who have struggled to find work for so long that they have given up looking do not count as unemployed. The marketing manager who works 16 hours a week at Burger King does not count as unemployed. The real unemployment rate is not the 9.7% that pundits cite. It is closer to 17%, which is close to Great Depression levels. The media tell us the situation is pretty bad, but it is actually worse than they say. If you are more than 50 years old your chances of finding any kind of job are slim. Sure, it is illegal to discriminate in hiring because of age but everybody does it.

Republicans tend to blame federal government policies, especially taxes, for the lack of jobs. They claim that somehow more tax cuts and more tax credits for businesses will inevitably result in a wave of new hiring. We tried that and it did not work. Bush signed off on huge tax cuts for wealthy individuals and claimed those who received the tax cuts would use the extra money to hire new people. Most did not hire any new people, and those who did create new jobs created them in Indonesia and Panama and Thailand.

Corporations are currently sitting on more than $1.5 trillion in cash. They have not used their profits to hire more people because, they claim, future government policy is uncertain. That is nonsense. Some executives admit they have not taken on more employees because consumer spending is lower than they would like. Of course spending is low; people do not have jobs. Those who do have jobs are very nervous about their future.

Some Republicans now say the way to put a lot of people back to work is to abolish the minimum wage. Oh sure, folks making $3/hour will really pump up the economy. What we need to do is stop all tax cuts and tax credits that go to corporations for sending jobs overseas. We need to arrest and impose a heavy fine on anybody who hires an illegal immigrant. When jobs are no longer available they will go home; we will not have to deport very many. That should free up more than 10 million jobs and maybe we can be prosperous again someday.


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