About those new jobs in February’s jobs report | #Economy on Blog#42

On the surface, February’s jobs report would seem like “breaking news” on America’s TV screens. It wasn’t, and aside from a few economic reporters’ articles in the business sections of their publications, you won’t find much in the way of analysis on the front pages. Last month’s jobs report shows a lot of jobs were added and January’s figures adjusted up. The report is neither rosy nor dark. How come? Let’s take a tour of what’s been written:

After some effusive characterizations about unemployment trends in recent years and then qualifying them with a mention of older workers retiring after 2008 and job-seeker disengagement, Neil Irwin of the New York Times writes:

“There is some interplay between the growth in the number of workers and the most disappointing signal in the February jobs numbers, which was a step down in average hourly earnings. Over the last year, this number has risen 2.2 percent, which amounts to a modest rise in pay for American workers thanks to very low inflation. But it hardly suggests the kind of booming economy indicated by the low unemployment rate.”

The kernels of truth in this entire piece are in this paragraph. Everything else in the piece is written to project a much rosier picture than reality.

After seven years of unemployment, people who’ve had to use up their life savings have no choice but to take minimum wage jobs and are returning to what little work they can find in order to stave off homelessness. They are also returning to work because, for the vast majority of those who were eligible for welfare and unemployment benefits are no longer, thanks to the the time limits and requirements of the 1994 Welfare Reform Act. As I reported in a previous post, the loss of vital food assistance at the same time as wages are falling is devastating to the elderly and families alike, as well as single childless individuals.

Economist Jared Bernstein writes:

“Payrolls were up 242,000 last month and the unemployment rate held steady at 4.9% in another solid jobs report from the the Bureau of Labor Statistics. Job gains over the prior two months were revised up slightly, adding 30,000, such that the average monthly gains over the past year were well above 200,000 (223K, to be precise). The closely watched labor force participation rate ticked up to 62.9%, as over 500,000 entered (or re-entered) the labor force, another sign of improving conditions.

Other signs, however, were more moderate. Average weekly hours fell by two-tenths of an hour, a significant drop, driven by the ongoing weakness in extraction industries (as well as utilities). Hourly wages, after adding a strong 12 cents in January, fell 3 cents in February (this is a common pattern with “high frequency” data–a strong month followed by a weaker one). The combination led weekly earnings to fall $6 (-0.7%) in February, though they’re up 1.6% over the past year.

Factory employment, which added 23,000 in January, gave back 16,000 in jobs last month, as our manufacturers continue to struggle with the effects of the strong dollar, which make our exports less price competitive. More manufacturing sub-industries lost jobs than added jobs, and over the past year, factory jobs are up only 12,000–0.1%, compared to 1.9% for total payrolls.”

Robert Reich’ analysis is far more sobering than Irwin’s or Bernstein’s:

Angry politics, indeed! As I wrote in my essay examining whether James Baldwin might have endorsed Bernie Sanders, I describe the palpable anger in every imaginable group of voters:

“For tens of millions of voters, this election is the expression and culmination of a deep personal existential crisis. For many a million of a new underclass, the precariat, it comes at the end of everything, and the precipice of a nothingness never previously experienced. For tens of millions of Americans who have experienced centuries-long oppression, a history of abiding disappointment is getting in the way of a renewed excitement and dedication to civic activism in the wake of 2008.”

That anger manifests itself differently in each group, ranging from seeking the authoritarianism of the likes of Donald Trump all the way to complete disengagement on the left, with deep distrust for both Democratic candidates and a resignation to a continuation of the status quo.

The truth lived by those who’ve been taking these jobs can be assessed in the comment sections of many a newspaper. New York Times readers were especially poignant in their comments. There is a dichotomy between how things are reported and the realities of the life Americans currently live that is no longer being addressed in economic writing in the mainstream press.  Paul Krugman, who hasn’t specifically written about jobs in almost two years, wrote this in connection to Donald Trump hinting at starting a trade war:

“All around the world, capital is fleeing troubled economies — including, by the way, the euro area, which these days tends to run bigger trade surpluses than China. And much of that flight capital is heading for the United States, pushing up the dollar and making our industries less competitive. It’s a real problem; U.S. economic fundamentals are fairly strong, but we risk, in effect, importing economic weakness from the rest of the world. But it’s not a problem we can address by lashing out at foreigners we falsely imagine are winning at our expense.”

I agree that lashing out at foreigners is no way to cure a problem and also agree that Trump’s analysis of trade imbalances comes from a very dubious, self-interested perspective that is based on flawed thinking. However, it remains true that much of the suffering by our nation’s working and middle classes is due to trade deals from the 1990’s on that have worked against working Americans and for corporations. That NAFTA, CAFTA and, now, the TPP, are trade deals that favor the wealthy is no secret. It is also no secret that Liberals who favor them hail from the neoliberal contingent of the Democratic party. Progressives and trade union members have always opposed them outright.

We not only need more higher-wage jobs, but we need to bring back jobs lost to bad trade negotiations by a leadership that has catered to the moneyed elites. This will require making changes to fiscal and monetary policy to force US corporations to “bank American,” rather than Cayman or Bermudan. Parking money overseas should come with heavy penalties, including taking back the cash equivalent of business incentives from those who took them out of country.

Restoring the balance and shrinking inequality means we need to reverse the trend we’ve seen over the last decades, of money siphoned up. That means much bigger taxes on corporations and the wealthy and greater investments in our nation . If we are serious about going back and striking a new New Deal, then we need to effect bold changes. Bold and incremental are mutually-exclusive terms.

This and the previous months’ reports make the case for beginning to call the class of workers they describe, precariat. These new jobs are, for the most part, low wage, part-time and, generally, not the kinds of jobs one should want the US economy to be based on. Are they preferable to no jobs, under the current political circumstance? Yes, but only slightly.

If we – and I mean America – want to bring back the middle class, then nothing less than a political revolution will do – the kind where the face of Congress is changed and we depart from neoliberalism’s self-imposed incremental progress. We’ve fallen too far for policies based on curtailed aspirations and lowered expectations to suffice. We owe it to our children, and ourselves, to finally tackle the enormous job of reversing inequality.

Message to readers:  My family is at-risk of becoming homeless and I am still very far from meeting my goal for the GoFundMe campaign to help save my family. Any support you are able to provide is deeply appreciated. Thank you.

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