Labor market numbers give little hope
With Americans still reeling from the needless debt ceiling fight and Standard and Poor’s credit downgrade, America’s job crisis continues to be on the backburner for policymakers. Maybe the recent economic indicators released by the Bureau of Labor Statistics will encourage lawmakers to focus on a labor market clearly in distress.
In her analysis of last Friday’s BLS Employment Situation report, Dr. Heidi Shierholz explained how the decline in the unemployment rate in July was not a sign of an improving labor market but rather the result of would-be workers dropping out of the workforce. The unemployment rate dropped from 9.2% to 9.1%, almost entirely because the labor force participation rate also dropped to 63.9%–its nadir in the downturn. In other words, there are 700,000 fewer workers in the labor force compared to December 2007. Further complicating matters, there are 2.8 million “marginally attached” workers—individuals who want jobs and are available to work but no longer actively seek employment because of their weak job prospects.
Wednesday’s Job Openings and Labor Turnover Survey provided further evidence that for most of these job seekers there are no jobs to be found. June’s ratio of unemployed workers to job openings was 4.5-to-1, a slight decline from May’s ratio of 4.6-to-1 but still far too high. Putting the numbers into context, Shierholz noted that the job seeker’s ratio has been above 4-to-1 for two-and–a-half years.
“Given the dire employment situation, Washington should be focused like a laser on restoring the economy to its potential and generating jobs. Instead lawmakers have crafted a debt ceiling deal that will slow growth further and make joblessness worse,” said Shierholz. She discussed the reports in further detail with reporters, and her analyses were cited by numerous major news outlets including Marketplace Radio, the Los Angeles Times, PBS Newshour, and Reuters.
Shierholz discussed the labor market with Mitchell Hartman of Marketplace Radio and noted that the numbers were far too low to get the country back to its prerecession unemployment rate. “117,000 jobs added—it’s just barely enough to keep up with normal growth in the working-age population, not enough to start putting the backlog of unemployed workers back to work,” she explained. Listen to the full interview.
To Don Lee of the Los Angeles Times, Shierholz said the recovery and labor market are “just hanging on, with no real improvement.”
Loss of construction employment in the Great Recession hit immigrants particularly hard
In the new EPI Briefing Paper, The Contraction in construction squeezed immigrants hardest, Shierholz looks at how the Great Recession has impacted the construction sector of the labor market, finding that nearly three million construction workers were displaced, with immigrant construction workers facing particularly steep job loss.
Shierholz explains that certain areas of the construction sector suffered more than others, with the residential construction subsector losing the most jobs after the housing bubble burst. Because immigrant workers largely occupy residential construction jobs, they were disproportionately affected by the job losses and accompanying wage decreases. From 2007 to 2010, construction employment among immigrant males fell 30.1%, compared with 21.6% among native-born males.
Construction jobs outside of the residential subsector experienced somewhat less steep declines than they otherwise would have because the infrastructure projects funded by the American Recovery and Reinvestment Act of 2009 created and saved jobs.
Highest-income households can afford to pay more in taxes
In this week’s Economic Snapshot, “Highest-income households can afford to pay more in taxes,” federal budget policy analyst Andrew Fieldhouse explains why the highest income households can afford to contribute more in taxes.
Between 1979 and 2007, the share of after-tax national income going to the top 1% of households more than doubled, jumping from 7.5% to 17.1%, while the middle 20% of households have seen their share of total national income slide from 16.5% to 14.1%. Rather than push against widening income inequality, tax policy exacerbated this trend. Now more than ever, the highest-income households have the means to contribute more.
Fairer tax policies could raise the revenue for the nation to have the “resources to support public investments and economic security programs that are currently in danger of being cut by the ongoing budget negotiations,” he concludes.
EPI in the news
In the past week EPI’s experts have been cited in over 200 television, radio, and print media outlets. Some of the highlights include:
EPI President Lawrence Mishel discussed the possibility of the U.S. experiencing a double dip recession on CNN’s The Situation Room.
From the Wall Street Journal: “According to the Economic Policy Institute, a Washington D.C. think-tank, between 1979 and 2006 (the latest year of available data), the top 1% of earners in the U.S. more than doubled their share of national income, from 10% to 22.9%. The top 0.1% did even better, increasing their shares by more than three times from 3.5% in 1979 to 11.6% in 2006. Despite getting such a bigger share of national output, the rich in the U.S. have failed to increase the growth rate.”
In the article, “With debt-limit deal, Dems likely made their jobs agenda tougher,” The Hill cited EPI’s analysis of the debt ceiling agreement’s effect on the economy and labor market.