The Bad Job Numbers and the Secret Second Stimulus
The Labor Department reports that 85,000 jobs were lost in December. The official rate of unemployment (which measures how many people are looking for jobs) held steady at 10 percent nonetheless. That’s because so many more people have stopped looking. Reportedly, 661,000 Americans dropped out of the labor force last month, deciding there was no hope of finding a job. Had they continued to look, the official unemployment rate would have been 10.4 percent.
These statistics mask an even more troubling reality. Since the start of the recession in December 2007, around 8 million jobs have been lost. But this doesn’t include all the people who, in a growing national population, would have entered the labor market had there been jobs for them. These “never entereds” amount to an estimated 2.5 million. So, in truth, the national economy is down by 10.6 million jobs overall. There’s no way to make this up for years.
The most painful political truth for Democrats is the nation won’t possibly be out of this jobs hole by the presidential election of 2012, even if the recovery is vigorous. Do the math. In order to get out of the hole, we’d need an average monthly increase of 400,000 jobs between now and then. But even at the peak of the 1990s jobs boom, the highest we ever got was 280,000 jobs a month. At the peak of the last recovery, in 2005, we got no higher than 212,000 jobs a month. Bottom line: Obama will be going into an election year with a higher total level of unemployment than before the Great Recession. He will have to argue that, were it not for his policies, things would be even worse. Counter-factuals like this do not sit well on bumper stickers.
Almost 40 percent of the jobless have been without work for over six months. That’s a record. People who have been out of the labor force for more than six months have a particularly hard time getting back in. Many never do.
[Read more at Truthout]
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