Total employment in the U.S. labor market is currently more than 600,000 jobs below where it was when the Great Recession officially started in December 2007, and it likely won’t surpass its December 2007 level for several months.

But private sector employment is another story. The private sector is currently “only” 126,000 jobs below where it was when the Great Recession started, which means it is poised to surpass its pre-recession peak when the March jobs numbers are released on Friday.

That makes this a good time to note that re-attaining pre-recession employment levels is a pretty meaningless benchmark economically. Because the working-age population (and with it, the potential labor force) is growing all the time, the private sector should have added millions of jobs over the last six-plus years just to hold steady. That means that even when the pre-recession employment level is re-attained, there will still be a huge jobs gap. Every month when the employment numbers are released, we update the total gap in the labor market (which includes both the public and private sector). The figure below shows that gap just for the private sector, with a current shortfall of 5.9 million jobs. When the March numbers are released on Friday, that gap may drop to 5.8 or even 5.7 million, but we are still far, far from healthy labor market conditions.

Conventional wisdom holds that the American workforce lacks the specialized skills that employers are looking for, and that this “skills gap” is the main, if not the only, explanation for our persistently high unemployment rate—especially our long-term unemployment rate. Paul Krugman helpfully exploded this idea in his New York Times column on Monday, making these key points:

• The ratio of unfilled jobs to unemployed workers today is quite low by historical standards. There are always unfilled jobs, because workers leave and employers have not yet had time or opportunity to hire replacements. This is a frictional, not structural, phenomenon. There are very few, if any, jobs today that remain unfilled because employers cannot find workers with the needed skills.
• Today’s long term unemployed have skills comparable to those of recently laid-off workers “who quickly find new jobs.” The long-term unemployed face a shortage of demand for their labor, not skill requirements beyond their education and training.
• If there really were a skills shortage, we would expect to see wages increasing in job categories where skills are allegedly in short supply. But such wages are not increasing.

Nor have wages increased for quite a while. It is especially telling that wages of college graduates, not just those of non-college educated workers, have been flat for a decade, and that young college graduates have been faring poorly, even prior to the 2008 recession. According to a recent report of the New York Federal Reserve Board, the percentage of recent college graduates “who are unemployed or ‘underemployed’—working in a job that typically does not require a bachelor’s degree—has risen, particularly since the 2001 recession. Moreover, the quality of the jobs held by the underemployed has declined, with today’s recent graduates increasingly accepting low-wage jobs or working part-time.” In other words, “skills gaps” are responsible for neither our unemployment problems nor our wage problems.

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In a post last month I compared nondefense discretionary spending (NDD) in three budget proposals: the Murray/Ryan budget deal, the administration’s budget, and the Congressional Progressive Caucus’s (CPC) budget. Nondefense discretionary spending is the part of the budget containing much of our spending on infrastructure, education, and public research and development—the part concerned with investments in the future.

House Budget Committee chair Paul Ryan released the House GOP fiscal year 2015 budget proposal today. The chart below shows nondefense discretionary spending as a percent of GDP in FY2007 (the year before the onset of the Great Recession) as a historical comparison to the various budget proposals.

For FY2015, the House GOP budget would adhere to the Murray/Ryan budget deal with NDD equivalent to 2.7 percent of GDP; the president’s NDD proposal is slightly higher at 2.8 percent of GDP and the CPC’s would be 3.8 percent of GDP. However, beginning in FY2016, the House GOP proposes to start slashing NDD spending. By FY2024 they propose that NDD spending shrink to 1.7 percent of GDP—almost half of what it was in 2007, and half of what it was during the Reagan Administration.

Earlier today, House Budget Committee Chair Paul Ryan (R-Wis.) unveiled the House Republicans’ fiscal year 2015 budget resolution. Like Chairman Ryan’s FY14 budget, this year’s model (again called “The Path to Prosperity”) aims to balance the budget within a decade—an economically nonsensical goal during a slow recovery, and one that requires damaging austerity to achieve.

In many respects, the austerity Chairman Ryan calls for this year is even more painful than in previous years. This is because Ryan is stubbornly hanging on to his goal of balancing the budget amid changing economic and political conditions, including a downward revision of $1 trillion in projected revenues over ten years and a deal he made with Senate Budget Committee Chair Patty Murray (D-Wash.) to not change discretionary spending levels in FY15 (creating the need for more draconian cuts throughout the ten-year “budget window”), as well as an unbending refusal to increase revenues.

Five years after the end of the Great Recession, our economic recovery is plodding, not because of massive deficits (which are not currently massive—they have fallen faster than at any point in the last 60 years), but due to a lack of aggregate demand. In a demand-starved economy like ours, public spending has a high multiplier effect, meaning that for each dollar the government spends, more than a dollar is added to the economy. This is especially true when that public spending is allocated in such a way that it can circulate quickly throughout the economy—for example, through low-income support programs (which are automatic stabilizers) or infrastructure investments that would create jobs rapidly.

For that reason, pulling back spending in today’s economic environment, as Chairman Ryan proposes, would have a deleterious effect on the economy and jobs. On net, I estimate that the House budget resolution would decrease GDP by 0.9 percent and decrease nonfarm payrolls by 1.1 million jobs in fiscal year 2015, relative to CBO’s current-law baseline. The following fiscal year, when Ryan’s cuts to discretionary spending kick in, “The Path to Prosperity” would decrease GDP by 2.5 percent and cost 3.0 million jobs. And if the recovery remains sluggish, large job losses could continue under the Ryan budget in 2017 and beyond.

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Andy Puzder is the CEO of CKE Restaurants (Hardee’s and Carl’s Jr.). Bloomberg reported his 2012 salary and other compensation as $4.485 million, so he is doing well in what he likes to deride as the Obama economy.  His restaurant chain is doing well, too, apparently, since its profits reportedly rose more than 30 percent last year. (So much for overregulation!)

But Puzder is opposed to President Obama’s proposal to update the Department of Labor’s overtime rules, an update Puzder claims would turn CKE’s poorly paid assistant managers into “glorified crew members.”  Those rules have been updated only once in the last 39 years and are so obsolete that workers earning less than the poverty level can be considered “executives” and denied overtime pay even if they work so many extra hours that their pay falls below the minimum wage. But that helps Puzder make a bigger profit, so he says leave the rules alone.

One thing is certain: Puzder won’t let any rule change reduce the millions he takes home from CKE. He wants us to know he will take it out of his employees, one way or another. As Puzder says, “overtime pay has to come from somewhere, most likely reduced hours, reduced salaries or reduced bonuses.”

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On Wednesday, the National Labor Relations Board (NLRB) region 13 director, Peter Sung Ohr, granted the Northwestern University football players the right to join the College Athletes Players Association (CAPA) union. The petition by the Northwestern football players was filed by their quarterback, Kain Colter, and had the support of the United Steelworkers. Ohr’s decision establishes a precedent for athletes at private colleges and universities to form or join unions. At the very least, it will allow players to join together to voice their concerns with issues that affect their well-being such as injury risk and time commitment. As of January, CAPA’s stated goals for the petition were limited to seeking more medical protections for players and guaranteeing scholarships in the event of injury. This decision, however, could also fuel growing criticism of the thriving business of college athletics and encourage the idea that the players should be paid on top of their scholarships.

Northwestern University and the NCAA have criticized the decision, arguing that college athletes are amateur athletes and students, not employees. Yet, the facts of the current system indicate that by any definition, these athletes are woefully underpaid employees. Broadly speaking, an employee is one who is compensated for one’s work and is under the control of an employer. The players at the Northwestern football team were compensated in the form of grant-in-aid of about $61,000 each academic year to cover the costs of tuition, fees, room, board, and books required for their education. As for control, Ohr touched on several aspects of the Northwestern football program’s system that are typical of many college athletic programs, in which players are under the supervision of their coaches and must follow a special set of rules. Northwestern sets strict limits on players’ ability to pursue outside employment, post on social media, or profit from their “athletic ability or reputation.” Additionally, players are required to commit 40 to 60 hours of time for conditioning, meetings, and practice for the team. “Not only is this more hours than many undisputed full-time employees work at their jobs,” Ohr noted, “it is also many more hours than the players spend on their studies.”

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The Supreme Court is deliberating in a case that will decide whether in-home personal care and home health aides are allowed to unionize and bargain agreements with government agencies. The case will also decide whether their contracts can require every aide who benefits from the collective bargaining agreement to pay her fair share in agency fees (or dues, if she is a union member).  These collective bargaining agreements have made a huge difference in the lives of the overwhelmingly female and disproportionately minority workforce that cares for the sick and disabled, the frail elderly and small children in their homes or in the homes of the customers.

Until the 1990’s, when states and counties across the nation began creating public entities to act as employers and bargain collectively with the workers’ unions, the in-home care workers rarely were paid more than the minimum wage, they had no coverage for health or dental insurance and no pension or retirement plan. Even today, after almost two decades of progress, half of these workers have incomes less than twice the poverty level and they earn far less than workers in other occupations – even after taking into account gender, age, race, education, and geography.

But where in-home aides have been permitted to unionize and bargain collectively they have improved pay and benefits, training, retention, and the safety of clients and workers alike. In Illinois, where the Supreme Court case challenging unionization arose, the latest contract includes $13.00 an hour pay, health and dental insurance, a grievance procedure, and paid training hours – a huge improvement over what was formerly minimum wage work with no benefits and no respect.

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In the context of a lost decade of wage growth for women, two recent proposals—to increase the federal minimum wage to $10.10 per hour (including increasing the separate minimum wage for tipped workers), and to increase the threshold salary for overtime pay to $50,000 annually—can provide much needed relief to women.

Increasing the minimum wage requires that Congress pass a law. The current minimum wage of $7.25 was set in 2007 and went into effect in 2009, but President Obama has already acted by executive order to require firms that hold contracts with the federal government to pay their workers a minimum of $10.10 per hour. In contrast, increasing the salary threshold for receiving overtime pay does not require congressional action, but does require action by the Secretary of Labor. The Fair Labor Standards Act sets the overtime pay premium at 50 percent more than the regular wage or salary, also known as “time-and-a-half.” Currently, if workers are classified as executive, administrative, or professional, and they earn more than the salary threshold of about $23,000 a year ($455 per week), they do not need to be paid overtime. President Obama recently directed Secretary Perez to consider how to update the rules so that workers are paid fairly for their overtime hours.

Because women earn less than men on average, it is not surprising that women are the majority—64 percent—of those who earn the minimum wage and would thus benefit disproportionately from an increase in the minimum wage. Economists expect that employers will also increase the pay of workers earning somewhat above the minimum, in keeping with past experience of minimum wage increases. An EPI analysis shows that 15.3 million women—9.6 million directly and 5.7 million through the spillover effect—would receive a pay increase were the minimum wage to be raised to $10.10 per hour. EPI also finds that nearly one-third of all working single mothers—or 2.3 million women—would receive a direct or indirect pay increase. Overall 55 percent of workers who would benefit from the increase are women.

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Twice a year, the Institute for Women’s Policy Research (IWPR) updates its fact sheet, “The Gender Wage Gap,” to report the latest data as they become available from the Bureau of Labor Statistics and the Census Bureau. This year, we noticed something new when we added the latest figure for median weekly earnings for men and women who work full-time—a virtual standstill in women’s real wages for the past ten years. This was true when looking at trends in both usual weekly earnings and annual earnings for those who work full-time, year-round.

For several decades, as new Fed chair Janet Yellen notes, women have been the success story in the economy. Women increasingly pursued higher education, eventually surpassing men in college graduation rates. Women also joined the labor force in larger numbers, worked more throughout their lives, and entered a variety of occupations that had been formerly virtually closed to them, becoming bus drivers, mail carriers, fire fighters, police officers, bankers, lawyers, doctors, and many others.

These gains in education and work experience (what economists call human capital) contributed to narrowing the wage gap, and the equal opportunity legislation of the 1960s and 1970s helped too. The gender wage gap closed from 40 percent in 1960 to 23 percent in 2012 (in terms of annual earnings). Women’s real earnings—meaning wages adjusted for inflation—grew as well, from $22,418 in 1960 to $28,496 in 1970, $30,136 in 1980, $34,247 in 1990, $37,146 in 2000, and $38,345 in 2012.

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This commentary first appeared in Spotlight on Poverty and Opportunity.

The pressing importance of jobs and economic growth – rather than the misplaced obsession with austerity – finally seems to be gaining recognition inside Washington. President Obama illustrated this renewed focus in his State of the Union address, emphasizing the need to “do more to make sure our economy honors the dignity of work, and hard work pays off for every single American.” The president’s fiscal year 2015 budget, released this month, builds off these ideas. It provides a robust vision for building a sustainable platform for economic growth with shared prosperity and security.

These priorities are front and center in the budget. The president proposes an additional $28 billion in nondefense discretionary funding (plus $28 billion in defense spending) in 2015. Much of this new spending – offset by the closing of tax loopholes – would focus on improving the well-being of low- and middle-income Americans through job creation and making work pay (wages have been stagnant since 2000).

A major budgetary focus is getting people back to work, with a particular emphasis on helping the long-term unemployed re-enter the workforce. Such assistance is desperately needed. Research by the Boston Federal Reserve showed that employers were extremely unlikely to call back job seekers who had been out of work for at least six months, even if their qualifications were better than other applicants’.

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