What Jobs?

The jobless recovery chugs along. That’s the conclusion we draw from today’s very poor jobs report from the government. Total non-farm payrolls dropped by 95,000 in September, which was much worse than the consensus and August’s loss of 57,000. This is simply not good enough. The fact that private sector employment edged up by 64,000 was swamped by the loss of 159,000 government jobs. Some of the loss in the public sector was the reduction of temporary census workers and was thus entirely expected. The really bad number came from state and local governments who are cutting their budgets rapidly in order to met artificially imposed limits. Most states have to run balanced budgets, so when tax revenues fall they start to cut services. That means workers are fired. In September this process cost us 76,000 jobs. That some analysts were surprised by this is astonishing: we have seen the wave of state level austerity measures picking up steam for a while. I doubt we have sen the worst yet.

Amidst this gloom was a small ray of light: the unemployment rate stayed constant. Unfortunately this resulted from a slowdown in people entering the workforce. The ratio of workers to population continues to shrink as more and more people of working age simply stop looking for work and drop out. This is a sad and damaging trend for the economy. The implication is that our potential to generate wealth is becoming more limited as people decide not to participate in the economy. Long term this places a limit on growth. Skills atrophy and motivation disappears.

Also buried in the report were other down notes.

The average workweek has stalled. It remained unchanged overall and the factory workweek actually fell. Obviously businesses are not picking up steam. Plus the average weekly wage was unchanged in September, which means that wages have grown only 1.7% in the last year.

None of these numbers is a disaster in itself. But none are good either.

Add them together and we paint a very weak picture. Far too weak for an economy ostensibly in the throes of a recovery. Something is amiss and needs fixing fast. Otherwise we will linger in this muddle for a long time.

How long?

I am shocked at the variation in the predictions of the projected length of our malaise. It seems every week another economist tries to outdo the record for pessimism. Now it is commonplace for analysts to speak of a decade or so before we return to full employment. Some talk of two decades. No one argues for a quick return to normalcy.

As I have stated here endlessly: we have the means to fix this. It doesn’t have to be this way. Yet there is no political will to implement the policies needed. This is not a just failure of economic theory. It is a failure of national willpower.

And that’s just sad. Why would we want to wallow in misery when we can recover if we want?

You tell me.