EPI economist Josh Bivens cautioned against reacting too optimistically to today’s data release from the Bureau of Economic Analysis.
“Gross domestic product grew in the fourth quarter of 2011 at the fastest rate since the first half of 2010—but any celebration should be muted,” Bivens noted. “The 2.8 percent growth rate for the quarter was well below expectations, and the year-round growth rate for 2011 was only 1.7 percent, a rate that would not generate reliable declines in unemployment should it continue.
“It seems clear that the sharp withdrawal of fiscal support currently embedded in law for 2012 would result in growth wholly insufficient to reliably lower the unemployment rate,” added Bivens. “At the very least, a year-long extension of extended unemployment insurance benefits and the payroll tax cut should be passed to keep 2012 from being a year of no improvement in joblessness.”
EPI’s right-to-work research influences national dialogue
With Tuesday’s 55 to 44 vote in the Indiana state House, so-called right-to-work legislation has passed both chambers of the state’s legislature—all but assuring Indiana will become the nation’s 23rd right-to-work state. Despite the recent media attention on right-to-work laws, many people are still unsure what such legislation means for them. As such, media outlets—including the Wall Street Journal, Huffington Post, and Christian Science Monitor—have turned to EPI to explain how right-to-work laws affect working families.
From the Wall Street Journal’s Law Blog: “A 2011 briefing paper from the Economic Policy Institute—a non-profit think tank that supports policies to improve economic conditions for low-wage workers—found that employees in right-to-work states had lower wages and reductions in health and pension benefits.”
And the Huffington Post: “Simply put, this legislation would make Indiana and its workers poorer. It is the ultimate transfer of wealth from the 99 percent to the 1 percent. It’s Robin Hood economics in reverse. A recent report by the Economic Policy Institute (EPI) found that this type of legislation would reduce wages by $1,500 a year and lower the likelihood that employees get health care coverage or pensions through their jobs.”
State unemployment trends: Every silver lining has a cloud
The Bureau of Labor Statistics’ release of state-level employment data on Tuesday appeared at first glance to confirm that most states are on a path to economic recovery, but closer inspection reveals the situation is far murkier. Since September 2011, 44 states have experienced reduced unemployment rates, and only four states (Hawaii, Indiana, Oklahoma, and Rhode Island) have experienced an increase in their unemployment rates. Meanwhile, seven states—Alabama, Michigan, Minnesota, Ohio, South Carolina, Tennessee, and Utah—all stand out with an unemployment rate reduction of one percentage point or more. However, in each of those seven states, a decrease in the size of the labor force is largely responsible for the decreased unemployment rates. In Minnesota and Ohio, the labor force has shrunk so much (-17,000 in Minnesota and -53,000 in Ohio) that the unemployment rate has gone down by more than one percentage point despite decreased employment since September 2011. (Click here for interactive state maps.)
This month’s data also showed five states and the District of Columbia hampered by unemployment rates at or above 10.0 percent (led by Nevada at 12.6 percent, California at 11.1 percent, and Rhode Island at 10.8 percent), while 14 states plus the District of Columbia have unemployment rates of 9.0 percent or higher.
A great deal could and should be done to spur economic growth in every state. As President Obama advocated in Tuesday’s State of the Union address, Congress must work with the president to invest in infrastructure and revitalize manufacturing, two keys to economic prosperity in many states.
Labor market still needs more than 10 million jobs
This week’s Economic Snapshot focused on the dire state of the labor market, as the jobs deficit left from losses in 2008 and 2009 remains well over 10 million jobs. Although December’s addition of 200,000 jobs was heralded as strong growth, the Snapshot shows that even at that rate, the United States will not return to full employment until 2019. The ongoing crisis in the labor market calls for substantial additional fiscal stimulus to generate jobs and bring down the unemployment rate.
EPI across the nation
Last week EPI’s Douglas Hall, director of the Economic Analysis and Research Network (EARN), joined a panel discussion on the importance of retirement security for working families before the Senate General Government, Consumer, and Small Business Protection Committee of the Oregon state legislature. Hall presented with Ellen Schultz, author of Retirement Heist and former news editor in the Health & Science section of theWall Street Journal, and community leaders Daniel Rodriguez and Kit Good.
EPI in the news
With graduation quickly approaching for college students across the country, reporters have turned to EPI to assess what the labor market holds for soon-to-be graduates.
- In “Landing a Job after a Year of Rejection,” NPR’s EmilyMcCord used an EPI graph to illustrate the significant impact the recession has had on the unemployment rate for college graduates.
- The New Republic’s Jonathan Cohn also cited EPI’s research to emphasize the staggeringly high unemployment rate for young college graduates. “As the Economic Policy Institute has pointed out, plenty of college graduates are out of work right now,” Cohn wrote in response to business owners’ claims that the labor market lacks skilled labor.
- And Fox Business: “Recent college grads could scarcely have chosen a worse time to enter the U.S. job market. First, there’s the jobs picture. In 2010, the unemployment rate for workers age 16 to 24 was 18.4%, the worst on record in 60 years, according to the Economic Policy Institute.”
Forbes magazine’s online personal investment resource, Investopedia, cited EPI’s minimum-wage research to explain the broad impact that increasing the minimum wage has on the workforce. “Having been woven into the fabric of modern society, minimum wage impacts a large percentage of the workforce. As of early 2012, about 70% of the 1.4 million minimum wage earners in the U.S. are full-time workers, according to the Economic Policy Institute,” the article explained.