Nov. 7, 2009: Thoughts on the October Employment Report
On Friday, the Bureau of Labor Statistics released another shocking report on the labor market, presenting the results of the October household and establishment surveys. The headline numbers were 190,000 payroll jobs lost and a jump in the unemployment rate to 10.2%, up from 9.8% in September. The job losses reported in the household survey, which includes self-employed and workers at smaller and newly established firms was a shocking 589,000, not quite as bad as September’s loss of 785,000, but quite sobering when the adminstration is claiming that the $787 billion Stimulus Bill has "saved or created" 600,000 jobs; this suggests either (i) we need an $800 billion stimulus every month, or (ii) fiscal stimulus is a very expensive way to "save or create" a job. A total of 15.70 million workers are now looking for, but unable to find, a job.
Men continued to fare more poorly than women: the unemployment rate among men rose from 10.2% to 10.7% while the unemployment rate among women rose from 7.8% to 8.1%. Teenagers suffered the most, with their unemployment rate rising from 25.9% to 27.6%; but most teens are not supporting themselves and a family. (Do keep in mind that the Federal government recently boosted the minimum wage; what a novel way to create new entry-level jobs during the worst recession of our lifetimes!)The civilian labor force declined by 31,000 while the number of potential workers not in the labor force grew by 259,000. This means that, as the adult population is growing, none of this growth in going into the labor force. The broader "U6" measure of unemployment, which includes discouraged workers who are no longer looking for work as well as part-time workers who would like to be working full-time, reflects this. This statistic jumped from 17% in September to 17.5% in October, representing 26.9 million workers who are unemployed or underemployed.
How can this happen in America, that almost one in five workers is unemployed or underemployed? Perhaps it is because the current administration and Congress are focused on political goals, including health insurance reform and cap-and-trade, rather than on creating jobs. Should these politicians succeed in these two major efforts during the coming year, millions of more jobs will be likely be lost, as employers adjust to the added cost burdens of these two new massive programs.
President Obama, Harry Reid and Nancy Pelosi are sounding more and more like Marie Antoinette in their understanding of the plight of the unemployed. Instead of “let them eat cake,” their mantra appears to be “Let them eat carbon-tax credits.”
Bill Clinton had it right: "It's the economy, stupid."
Right now, Americans need jobs, not hard-ball politics.
