As the unemployment rate moves closer to double digits, new jobs data released on July 2 highlighted another troubling trend: The loss of 467,000 additional jobs in June means that the United States has fewer jobs today than it did nine years ago, in May of 2000. In a recession that continues to stand apart as the worst, by many measures, since the Great Depression, the latest unemployment numbers earned it yet another dubious distinction. As EPI economist Heidi Shierholz noted in an in-depth analysis of the monthly jobs data, “this is the only recession since the Great Depression to wipe out all jobs growth from the previous business cycle, a testament to both the enormity of the current crisis and to the extreme weakness of jobs growth over the business cycle from 2000 to 2007.”
What the stimulus couldn’t touch
The relentless pace of job loss, which in June was worse than most economists had forecast, sparked fresh discussion about the $787 billion economic stimulus Congress passed last winter. Once a debate over whether such a seemingly large amount represented reckless spending has shifted to a question of whether that amount is sufficient to make a dent in a downturn that is far more severe than most people believed just a few months ago. Following the latest jobs report, EPI President Lawrence Mishel argued that more aid is needed to support families affected by job loss and wage stagnation and to create new jobs. One problem with the stimulus as it was originally designed, said Mishel, is that at the time of the presidential elections last year, the consensus among economists was that unemployment would peak at 7.7% at the end of 2009, significantly understating the rapid rise of unemployment ahead.
Widespread media coverage
Both Shierholz’s exhaustive analysis of the jobs data and Mishel’s discussion of the need for more stimulus dominated news coverage of the fragile economy, including a growing call for more stimulus. “The economy took away everything they put on the table,” Mishel told the Associated Press. A Wall Street Journal story exploring the need for further stimulus also quoted Mishel explaining how rising unemployment would impact even those people who managed to hold onto their jobs. “When we hit 10% unemployment, which we will within months, even those who don’t lose a job will be affected by the squeeze on wage growth, furloughs, and the cutbacks in retirement plans,” he said. Shierholz’s analysis showing that the economy has fewer jobs today than in 2000 was cited by multiple major news outlets including The New York Times, the Los Angeles Times, and the Huffington Post. National Public Radio’s Weekend Edition also cited EPI’s analysis of the growing problem of long-term unemployment, which showed that 4.4 million people had been unemployed for at least six months.
Also in the news
A San Jose Mercury News story on the challenges recent college graduates faced finding jobs cited EPI’s recent Economic Snapshot showing that, while the unemployment rate for people under 27 was well below the overall unemployment rate, it was nonetheless the highest level seen in 26 years.
On Wednesday, July 15, EPI’s Bailout Analysis Project director Nancy Cleeland will moderate The Federal Reserve’s Expanded Role: Is Greater Transparency Needed? The second in a series of forums on the financial crisis, the event will feature a keynote address from Vermont Senator Bernie Sanders. The event will run from 9:30 A.M. to 11:30 A.M. at EPI’s office in Washington. For more information, or to RSVP, click here.