Media clips
-
Here’s a roundup of reactions to Friday’s report from the Labor Department showing that the U.S. added 192,000 jobs in March and the unemployment rate held steady at 6.7%. Read MarketWatch’s story about the March jobs data.
“6.7% unemp rate means nothing when we include missing workers- including them increases unemp to 9.8%.” — Hilary Wething, senior research assistant, Economic Policy Institute. @hilweth
MarketWatch April 8, 2014 -
“The U.S. economy is trending close to our multi-year labor market target, but the underlying long term narrative remains decidedly negative,” Guy LeBas, chief fixed income strategist at Janney Capital Markets, wrote in a client note Friday. “In fairness, this numbers/narrative dichotomy exists in large part because the quality of jobs created have fallen a few sandwiches short of a picnic.”
As Heidi Shierholz, an economist at the liberal Economic Policy Institute, noted in a blog post Thursday, “re-attaining pre-recession employment levels is a pretty meaningless benchmark economically.” We’re back to where we were, but not back to where we should be. “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,” Shierholz wrote. She puts the jobs gap at nearly 6 million.
The Fiscal Times April 8, 2014 -
“We’ll be eclipsing the prior peak [for private sector jobs], and finally entering the expansion part of this recovery,” Simons said. “We think this is a very significant milestone.”
So why doesn’t it feel like a recovery?
Given it took four years to get this point, this jobs recovery has been the slowest on record since the Labor Department started tracking the data in 1939.
The private sector data also misses an important piece of the puzzle: It does not factor in the growing population.
For that reason, Heidi Shierholz, a labor economist with the liberal-leaning Economic Policy Institute, calls the private sector jobs number little more than a “psychological milestone.”
“I think it’s an economically meaningless benchmark,” she said. “We need so many more jobs to have the same job market conditions.”
CNNMoney April 8, 2014 -
Economist Bill Rodgers has a name for the recovery — and it’s not a very nice one.
Rodgers, a professor at Rutgers University, calls it “bifurcated” because people who have college degrees are getting hired, but those who didn’t finish school are sitting on the sidelines. Many have given up on their search for work.
“This horrible recession, combined with this weak recovery, has lead to this bifurcated set of outcomes,” he says.
The nation’s unemployment rate fell slightly in March to 8.8 percent; more than 200,000 jobs were added to the payroll. But the unemployment rate leaves out many people — including those who have stopped looking for jobs and have dropped out of the labor force.
“One of the things that I think is sort of an intuitive idea is that if the unemployment rate is improving, that’s really only good news if we see a bigger share of the labor force that’s working,” says Heidi Shierholz, an economist with the Economic Policy Institute.
Shierholz says she thinks the employment-to-population ratio, which measures the share of the U.S. population that has a job, is a more accurate reflection of the unemployment picture. The ratio has hardly budged over the past year. That means the percentage of people working in this country hasn’t changed though the unemployment rate has ticked down.
NPR April 8, 2014 -
The good news in the report, by Daniel Aaronson and Scott Brave — sort of — is that fewer jobs will be required in the future because fewer people are participating in the labor force (either working or actively looking for work). They said that the economy would need only 80,000 jobs a month — far less than the 150,000 to 200,000 needed in the 1980s and 1990s, when millions of women were entering the labor force. In a couple of years, the number of jobs needed to stay on trend would fall to 35,000. That augurs a future of low growth. Another estimate, based on Congressional Budget Office projections, says 90,000 jobs a month are needed.
But, they acknowledge, that is based on a number of assumptions about which there is high uncertainty, such as the extent to which the decline in participation is driven by demographic changes like aging Baby Boomers, as opposed to discouraged people who would like to have jobs dropping out. Right now, there are 6.1 million people who are not in the labor force but “want a job now,” lower than last year’s average of 6.4 million. As the job market improves, those people tend to re-enter the labor force.
The Economic Policy Institute has a chart showing where the economy would be if job growth had continued on trend (that is, if the recession had never happened). The gap stands at 7.3 million jobs.
The New York Times April 8, 2014 -
REPORT: TO FIX THE TAX CODE, DON’T DEFER. Economic Policy Institute’s Thomas Hungerford will release a paper this morning focusing on how Congress can reform corporate taxes — and he’s offering a simple fix.
It wouldn’t take wholesale tax reform to solve the problem of corporate income taxation, he argues. All it would take is ending deferral, which allows multinational corporations to delay paying U.S. taxes on income held abroad as long as the companies keep those profits offshore. Economic Policy Institute is a left-of-center think tank. It’s an idea likely to make many friends among Democrats as the White House and some Democrats on the Hill support limiting corporate tax deferral. Republicans, for their part, promote moving to a territorial system, which would only tax the U.S. income of a corporation, largely exempting foreign income from domestic taxation.
The Hill April 3, 2014 -
The Obama administration’s decision to restrict tire imports from China, they contend, “saved a maximum of 1,200 jobs” at “the total cost to American consumers from higher prices” of $1.1 billion in 2011. “The cost per job saved was at least $900,000 in that year. Only a very small fraction of this bloated figure reached the pockets of tire workers. Instead, most of the money landed in the coffers of tire companies, mainly abroad but also at home.”
Back on the other side of the trade issue, the pro-labor Economic Policy Institute has a comprehensive set of proposals, “New Trade Policies for a New Era,” that would radically alter United States trade policy. The proposed policies include the abandonment of congressional “fast-track” approval of trade agreements, the initiation of sanctions against China for currency manipulation, the renegotiation of free trade agreements, and the replacement of the Office of the U.S. Trade Representative and the Commerce Department with a new department of industry and trade with a mandate to support job creation in the United States.
The New York Times April 3, 2014 -
“People often think that severe weather will hurt employment, but it rarely has a measurable impact,” says Diana Furchtgott-Roth, a former chief economist at the Labor Department. “Any person who is paid — even if just for one day — during the reference period, will be counted as on the payroll,” she added.
As Heidi Shierholz, an economist at the Economic Policy Institute, explained, “the seasonal adjustment factors already take bad weather into account, so the weather would have to be extremely bad across a wide swath of the country” for it to have a measurable impact on the employment data.
The Washington Post April 3, 2014 -
Maybe it has led employers to add tens of thousands of jobs. Or perhaps it has caused the loss of 700,000 jobs. Maybe it has been “a bonanza for U.S. farmers and ranchers,” as the United States Caanhamber of Commerce has said. But perhaps it has depressed wages for millions of working families. Then again, maybe all sides are wrong: “Nafta brought neither the huge gains its proponents promised nor the dramatic losses its adversaries warned of,” wrote Jorge G. Castañeda in an essay for Foreign Affairs this winter. “Everything else is debatable.”
The New York Times April 3, 2014 -
Upworthy April 3, 2014