The March unemployment report showed the jobless rate falling slightly to 8.8% with the addition of 216,000 jobs. In her analysis of the latest report, EPI Economist Heidi Shierholz argues that while progress has been made, much more is needed.
At the current rate of job growth, it would still take until around 2018 to get back to the pre-recession unemployment rate, Shierholz notes. She also points out that labor force participation remains at its lowest point in 27 years. This means that the millions of workers who dropped out of (or never entered) the labor force during the downturn have yet to return.
“As a snapshot, this report looks quite good, but given where we are, we need to see this and more in the coming months,” Shierholz says. A New York Times editorial underscored the labor market’s limited progress:
Republicans often justify their antirelief, antitax stances by saying that businesses aren’t hiring due to uncertainty about the effects of government spending and regulation. The numbers don’t support that. A research note last week from the Economic Policy Institute pointed out that in March, the length of the average workweek remained stuck at 34.3 hours, far below where it was before the recession and not far off its low point of 33.7 hours in mid-2009. If employers had work that needed to be done but were skittish about hiring, hours would have been ramped up to meet the need.
See the latest labor market numbers, updated every month as new data becomes available, on State of Working America.
Budget proposals fail to address job creation
In March, 24.5 million workers were unemployed or underemployed, a fact that Republican leaders in Congress failed to address in their recent budget proposals. EPI produced extensive analyses of these proposals, showing that they would prematurely cut federal government spending, weakening the fragile economic recovery and prolonging the jobs crisis.
–In Cutting spending and burning the middle class: Competing proposals from Congress jeopardize the recovery and our future, Federal Budget Policy Analyst Andrew Fieldhouse shows how five proposed budget plans would jeopardize economic recovery while disproportionately placing the burden of spending cuts on working families. He also finds that none of the proposals address insufficient government revenue or rapidly growing health-care costs, which are the real medium- and long-term fiscal challenges confronting the United States.
–Paul Ryan’s budget would undermine economic security, by policy analysts Rebecca Thiess, Ethan Pollack, and Andrew Fieldhouse, details how the proposed Republican budget would not only hinder job creation but also reverse the gains the United States has made in health and economic opportunity. “This resolution would deny millions of middle- and low-income households access to the American Dream,” they write. They explain that if the plan were passed, Medicare, Medicaid, Social Security, and other vital federal government programs would be significantly weakened or nearly eliminated.
–Magical thinking won’t create jobs: Heritage forecasts for Ryan plan are fantasy by EPI Vice President Ross Eisenbrey, emphasizes the catastrophic effects continuing failed tax policies will have on the fragile recovery. Eisenbrey challenges Rep. Paul Ryan’s claim that his plan to continue the failed tax policies will almost erase unemployment. “The chances that this plan would drive the U.S. economy to 2.8% unemployment are near zero, but the chances of it repeating the mistakes of the Bush tax cuts and driving the economy into a ditch are very real,” Eisenbrey writes.
-Matt Yglesias of the Center for American Progress Action Fund referenced Our Fiscal Security’s budget report, produced by EPI, Demos, and The Century Foundation, calling it “a good look at the basic shape of what a progressive dream budget ought to look like.”
Expansionary fiscal policy is still the best tool for boosting jobs
In the briefing paper Abandoning what works (and most other things, too), EPI Economist Josh Bivens shows that policies that boost demand for goods and services, such as investing in infrastructure and unemployment insurance, are the best tools for lowering unemployment, while tax cuts for the wealthy or for corporations have much smaller benefits.
The false promises of ‘right-to-work’
In the briefing paper ‘Right-to-work’: Wrong for New Hampshire, EPI Research Associate and economist Gordon Lafer further debunks the myth that right-to-work (RTW) laws boost employment growth in the states in which they are enacted. In the paper, Lafer exposes the faulty methodology used to bolster RTW claims and details the harm the laws could have on New Hampshire’s economy. He also reveals how—without RTW—New Hampshire already has a higher median household income and lower poverty rate than all 22 states with RTW laws.
International trade and American jobs
On March 30, EPI International Economist Robert Scott testified before the U.S. China Economic and Security Review Commission about the growing U.S. trade deficits with China, which he said had cost the United States 2.4 million jobs between 2001 and 2008 alone. Scott said that more than two-thirds of the jobs displaced were in the manufacturing sector, and growing trade deficits with China are the greatest threat to the future health of U.S. manufacturing. His full testimony is available here. On April 7, Scott also issued a brief commentary warning that a pending free trade agreement with Colombia would remove any leverage the United States had to negotiate better labor rights in that country.
EPI in the news
The New York Times quoted EPI Research and Policy Director John Irons when exposing the lack of practicable details in recent Republican budget proposals.
The Hill quoted EPI Federal Budget Policy Analyst Rebecca Thiess in a story about Rep. Paul Ryan’s budget plan.
Daily Kos cited EPI’s recent release on wealth disparity in a post about budget negotiations and the factors that must be considered, including the concentration of wealth in the hands of the few.