An Awful Juxtaposition On Jobs

Last night, Vice President Biden spoke about an incident where his father had to leave home to find a new job, but reassured his young son that everything was going to be fine.  “For the rest of our lives, my sister and my brothers — for the rest of our lives, my dad never failed to remind us that a job is about a lot more than a paycheck,” Biden said.  “It is about your dignity. It’s about respect. It’s about your place in the community.  It’s about being able to look your child in the eye and say, ‘Honey, it’s going to be OK,’ and mean it and know it’s true.”

I think Biden is right — jobs are about self-worth, pride, and much more than a paycheck.  That is why today’s very bleak jobs report numbers are such a devastating blow for President Obama.  Only 96,000 new non-farm jobs were created in August, and the already poor jobs numbers for June and July were revised downward.  Even worse, 368,000 people who had been looking for a job stopped looking, and the total number of people in the workforce dropped to its lowest level in 31 years.  The unemployment rate fell slightly, to 8.1 percent, but only because of the huge number of people who have stopped looking for a job.

Consider:  368,000 people — more than enough to fill Ohio Stadium three times — have just stopped looking for work.  Those people won’t know the dignity, respect, and sense of community that a job can bring, and they won’t be able to confidently reassure their worried young children that everything will be okay.

Last night, President Obama and Vice President Biden sought to reassure us that things will get better through their efforts.  This latest jobs report makes those efforts to reassure seem empty and baseless — to those unfortunate folks who have given up, and to the rest of us who have been praying for an economic rebound.  If anything, the devastating and depressing jobs report says that things are going from bad to worse.

Looking For A Job, Any Job, In Cleveland

Times are tough in Cleveland.  How tough?  Today a story gave us some sense of the distress felt by many people.

The times in Cleveland are so challenging that, when the Horseshoe Casino Cleveland announced that it was accepting applications for table game and poker dealer jobs that pay between $17 and $22 per hour, 11,800 people applied for 500 openings.  Some applicants even took special coaching classes at a nearby community college to try to improve their interviewing skills and show the dazzling personality that casinos apparently are looking for in table game dealers.

In 2009, when Ohio voters approved the constitutional amendment allowing casino gambling in our state, it was sold as a way to create jobs — and at least that promise is being kept.  Two years later, the economy still stinks, and former construction workers, machinists, and medical billing technicians who have been out of work for months are so desperate that they have flooded a not-yet-open casino with applications and even taken classes in hopes of improving their slim chances of landing a job dealing blackjack.  In my view, that painful reality says a lot more about the true extent of our economic problems than cold statistics ever could.

 

The Power Of Zero

The August jobs report was released today, and it showed that the American economy created no net jobs in August.

That’s right:  a big, fat zero.  Nada.  Zilch.  A goose egg.  Naught.  Zippo.  What could be a more apt and powerful description for the moribund state of our economy?  Neither up nor down.  Dead in the water and becalmed.  Not really doing anything.  It’s the first time since 1945, 66 years ago, that the government reported a net job change of zero.

This result comes as no surprise to those outside the Washington Beltway who are looking desperately for jobs that don’t exist or are trying to find their way during this time of economic standstill. We’ve seen the listlessness, the lack of growth, and the lack of confidence firsthand and all around us.

Next week, President Obama will give a speech to a joint session of Congress to spell out his latest plan to jump start the economy.  If another speech could help, shouldn’t it have been given long ago?  If the Administration had new ideas on what to do, shouldn’t they have been proposed already?  The zero reported today seems to reflect a lack of ideas and a lack of urgency as much as a lack of economic growth.

Looking On The Bright Side

Today’s announcement of the latest unemployment figures was bad news all around — only 18,000 jobs created, the unemployment rate up to 9.2%, more than 270,000 out-of-work Americans who have just stopped looking for a job, and growing fears that our lingering recission is going to get worse before it gets better.  One economist quoted in the linked article said it was “an employment report with no redeeming features whatsoever.”

My grandmother told me, however, that I should always look on the bright side.  I’ve tried to do that about the current sad state of the American economy, and have come up with the following possible silver linings:

*  We’re kicking Greece’s ass!

*  “Quantative easing” would be a good phrase to use in a laxative commercial.

*  When you think about it, owning your own home really is kind of a hassle, anyway.

*  Look, a squirrel!

If those don’t do the trick, how about the classic song of unbridled optimism from Monty Python’s Life of Brian:

 

Bleak, Bleak, Bleak

I haven’t written about the economy for a while, and there is a reason for that:  I am trying to maintain a positive attitude this summer, and the economic news has been unrelentingly bad.  Avoidance therefore is the only path to optimism.

Of course, it is impossible to fully ignore the news, which is discouraging.  The latest report on unemployment, which came out yesterday, is a good example.  Every month, millions of Americans remain out of work, as the economy continues to be mired in a recession.  And when the bad economic news is combined with the reports on the lack of progress toward a political agreement that would meaningfully address our national budget and deficit issues, it becomes hard to put on a happy face.

As a lifelong Cleveland sports fan, I am used to pessimism and disappointment.  As a country, however, we sure could use some good economic news for a change.

The Stubborn Problem Of Consumer Confidence

The Conference Board Consumer Confidence Index fell in May to a recent low, causing some to fear that we may be on the cusp of the dreaded “double-dip” or “W” recession.  Economists expressed surprise at the news.

The only thing surprising about this news item is that some economists are still expressing surprise that American consumers aren’t more bullish about things.  Seriously, what world do these guys live in?  Leaving apart the weird notion that you can gauge something intangible like “confidence” with anything approaching scientific accuracy, what has happened recently that would encourage anyone to feel more upbeat about the economy?

For those who live in ivory towers or in the canyons of Wall Street, here is what those of us out in the country are seeing.  We know people who are out of work and have been out of work for a very long time.  We know college graduates who have gotten their degrees from fine institutions and can’t find even an entry-level job.  We know that gas and food prices have gone up since last year.  We’ve watched businesses close.  We’ve seen houses in the area sold at foreclosure and other houses in the neighborhood that seem to have been on the market forever.

So don’t tell us that some arcane leading economic indicator should cause us all to be doing handsprings.  We’ll believe the economy is getting better when our nephew can find a job and the house down the block gets sold.  Until then, understand that we are going to be cautious, and careful — and don’t be “surprised” that we are staying that way.

Still, No Jobs

We keep getting told that economic recovery is underway, but the evidence remains stubbornly to the contrary.  The most recent bit of bad news is the November jobs report, which showed the unemployment rate increasing from 9.6 percent to 9.8 percent.  According to the report, only 50,000 private sector jobs were created — a puny number by any measure, and far below the kind of robust growth that is needed to make an appreciable dent in the unemployment rate.

Many people are citing general economic uncertainty as the reason for the failure of employers to hire, and I am sure there is truth to that.  The fact that the federal government hasn’t acted on tax rates probably hasn’t helped, either; it leaves some small business owners wondering how much money they will have in the budget for new employees, and they aren’t going to hire before they know they can afford to do so.

I also wonder, however, whether the tough economic sledding over the past three years has permanently reduced employer confidence.  Whereas before employers might have made new hires on the expectation of future growth, now employers may wait until the growth has actually occurred, and been sustained, before they break down and hire more workers.  If that is the case, then we may be waiting a long time before the politicians’ constant promises of a job-filled recovery are realized.

A (False) Choice Election

The Obama Administration and the Democratic Party have decided that the 2010 election should be about “choice.” That is, the President and his Democratic comrades don’t want to have the election be a referendum on how the country is currently doing under their stewardship.  Therefore, their goal is to make this election about “choice,” and they define the choice as being between the current policies and the “failed policies of the past” when Republicans controlled the White House and the Congress.  President Obama says it is like disciplining a teenage driver who has just driven the family car into a ditch and now says he wants to get behind the wheel again.

For a person who speaks often about rejecting “false choices,” the President and the Democratic Party seem to be presenting voters with precisely that.  No one is arguing that we should go back to the days when Republicans in control of Congress spent like drunken sailors.  If that were really the choice, most Americans would be suicidal, because the choice would be between the failed policies of the past and the failed policies of the present.  I think many Americans, whether the Democrats admit it or not, recognize that the economic policies of the Obama Administration have failed.

As bad as the economy was at the end of the Bush Administration, the record of President Obama and his supporters doesn’t exactly shine by comparison.  The President has presided over a sustained spike in the unemployment rate, a lingering recession that is teetering on the brink of the dreaded “double-dip,” a pork-laden “stimulus” bill that failed of its essential purpose of providing jobs and has saddled our children with unnecessary debt, bailouts of failing businesses and industries to no appreciable positive effect, budget forecasts that project massive, unsustainable deficit spending far into the future, a moribund housing market, and a host of phony programs like “cash for clunkers” that have done nothing except waste tax dollars.

Unless you were one of the lucky people who got a bailout, cash for a “clunker,” or some other form of government booty, the policies of the Obama Administration and its allies in Congress have accomplished nothing that is positive.  In the meantime enormous government interventions in the economy, through social engineering programs like the “health care reform” legislation, promise to bring new intrusions into our daily lives.  When average Americans look at the dismal record of the economic policies  enacted so far — all of which have failed to live up to the earnest promises of their proponents — they understandably must envision the impending impact of the “health care reform” legislation with fear and loathing.

The only good news for the President and the Democrats is that the American people are no more fooled by the Republicans than they are by the Democrats.  Both parties have let us down; neither has any store of credibility when it comes to governing and spending and taxing responsibly.  If the 2010 election goes favorably for the Republicans and they suck at the job of running the country, no one is going to have the slightest hesitation in voting them out of office and turning to some new alternative.

To borrow the President’s car metaphor, the Republicans may have driven the economy into the ditch, but many of us believe that the President and Congress, like Thelma and Louise, are driving us pell-mell toward a cliff.  I’m hoping that the Republicans will act like sober adults behind the wheel, but I’d even hand the keys to a teenager rather than sit idly in the rear seat and watch as apparently suicidal drivers hopelessly attempt to evade the consequences of their bad decisions and irresponsible policies.

U, V, Or W (Cont.)

The most recent economic news is pretty darn grim.  The number of people filing new claims for unemployment benefits has increased, the housing market in America is depressed, and the stock market has just experienced its worst quarter in some time, with the Dow down more than 10 percent.  When you combine that with the sharp drop in consumer confidence, you get a recipe for the dreaded “W”, or double-dip recession.

Let’s hope that the current bleak outlook doesn’t continue; we don’t need the 401(k) plans and net worths of Americans to take yet another hit.  The tenuousness of the American economy, however, just indicates how important it is that our political leaders focus on getting our economy out of the dumper and back to serving as an engine of job creation.  We shouldn’t be concerned with “cap and trade,” or “green jobs,” or new tax burdens to finance other policy initiatives right now.  Bill Clinton’s reminder has never been truer than it is now:  “It’s the economy, stupid.”

Summer Help Not Wanted

I posted recently on the impact of the recession on the summer job market for teenagers.  Now USA Today has written a feature piece on the extent of the downturn in jobs for teenagers.   Ten years ago, about half of all teens had jobs; this year it is only about 25 percent.  The story notes that teens now are in competition for scarce jobs with older workers, immigrants, and former blue collar workers.  In addition, increases to the minimum wage have hurt the number of jobs available for teenagers, and have had a disproportionately harsh impact on jobs for minority teens.  One potential solution — a special, lower minimum wage for teenager workers — doesn’t seem to have much support in Congress.

Whatever the cause, I think few would argue against the proposition that having a bunch of unemployed teenagers laying around this summer is not a good thing.  Summer jobs provide crucial learning experiences for teenagers and help to ingrain habits of hard work and thrift.  In addition, there is truth to the old adage that “idle hands are the devil’s workshop.”  Teenagers who are working at a pool, a Dairy Queen, a golf course, a grocery store, or on a lawn crew don’t have as much time to be “bored” and engage in risky behavior with their friends.

There has been a vigorous debate about whether increasing the minimum wage has been helpful or harmful.  If the price of higher wages is fewer teenage jobs, I am not sure that it was a price worth paying.

Redefining “Improving” (Cont.)

Unfortunately for us all, the bad news about the economy just keeps coming.  Today the Labor Department announced that new claims for unemployment benefits rose (as always, “unexpectedly”) to the highest level in a month.  472,000 new claims for unemployment benefits were filed last week.  The total number of people receiving benefits increased to 9.7 million.

Equally bad, the summer job market apparently is the worst it has been in decades.  As a result many American teenagers aren’t getting the opportunity to hold down a job, to learn the value of a dollar by earning their own spending money, and to develop good work habits and ethics.  That fact also is likely to cause long-term problems in our society.  Summer jobs are important learning experiences for new entrants to the work force; the new workers deal with their first boss, learn to get along with co-workers, and perhaps get a meaningful lesson or two in the school of hard knocks.  We should be as concerned about the lack of employment opportunities for young people as we are about any of our other economic problems.

Redefining “Improving” (Cont.)

Redefining “Improving” (Cont.)

Redefining “improving”

Redefining “Improving” (Cont.)

Today we got more economic news that indicates that the economy that we keep hearing is “improving” is, in reality, not doing much along those lines.  The May jobs report showed that the economy added 431,000 jobs last month, but that number is not considered very good news for two reasons.  First, economists were expecting the creation of significantly more jobs; estimates ranged as high as 750,000 new jobs, and the average estimate was well above 500,000 jobs.  Second, the vast majority of the jobs — more than 90 percent — were temporary government jobs related to the 2010 census.  In all, 411,000 of the new jobs were temporary census positions that will end later this summer, and when that happens all of those people will be back on the pavement.

The stock market plummeted on the bad employment news, as well as the unsettling debt news from Hungary.  Anyone who pays much attention to the stock market these days is likely to get whiplash; the market is bouncing like a yo-yo.  I think the reason is that the market is simply reacting to the daily news without much direction from underlying fundamentals.  No one knows whether the recession is really over, whether the European debt crisis will be successfully resolved, or whether wars will break out in the Middle East or on the Korean peninsula.  The uncertainty makes the market lurch up and down as investors try, unsuccessfully, to read the news each day as an indicator of long-term trends.

What is clear is that the economy is not “improving” — at least, not in a way that is very noticeable for the average citizens who care mostly about jobs.  We would all be better served if economists kept their thoughts about the “improving” economy to themselves until we get several months of strong employment news.

Redefining “Improving”

Redefining “Improving” (Cont.)

Redefining “Improving”

How many times have we seen this story since the recession began and President Obama took office?  We get more bad economic news, and economists express surprise at the crappy news in view of the “improving” economy.  Is anyone but economists surprised that we are getting more bad economic news?  Does anyone other than academics actually believe that the economy is significantly improving?

Consider the linked story, which reports on news released today.  The unvarnished truth is that 471,000 people filed new claims for unemployment benefits last week, up by 25,000 from the number of new claims filed the week before.  The index of leading economic indicators dropped.  The stock market plummeted, down more than 300 points.  The unemployment rate is 9.9 percent. The article reports that 4.63 million Americans are receiving regular unemployment benefits, and another 5.3 million Americans are receiving extended unemployment benefits paid by the federal government.  By my math, that is about 10 million unemployed people.  And Congress is now rushing to extend unemployment benefits — which already have been extended to 99 weeks — still further.

And yet the article refers to “an improving economy” that “has lured those who had given up looking for work back into the labor market.”  By what measure is our economy improving?  Are we just comparing the current situation to the point in the recession where the most jobs were being eliminated, and concluding that although thousands of new people are losing their jobs and looking for help, not as many are losing their jobs as were losing their jobs in March 2009?

This country has fallen far, indeed, if its citizens consider an economy with 10 million unemployed, a frozen credit market, an ongoing foreclosure crisis, and unprecedented governmental budget deficits — among many other problems — to be improving.  I’d bet most people don’t agree with such silly happy talk.

Uncertainty, Jobs, And The Economy

There’s been a lot of hand-wringing about the most recent joblessness report, which provided unemployment statistics for December.  The report indicated that business cut 85,000 jobs in December, whereas many economists had forecast there would be no jobs loss.  Even worse, hundreds of thousands of frustrated, unsuccessful job seekers — 661,000 of them — apparently quit looking for work, which is the only reason the unemployment rate stayed steady at 10 percent.  These facts, and the presence of many workers who are working at less than full capacity due to furlough days and reduced hours, indicate that it likely will take a while for the unemployment rate to improve dramatically.  Even as the economy picks up, businesses will first fully engage their current underemployed workers, and then as job growth begins the disaffected workers who have stopped looking for work will come back to the labor market and begin to be counted as unemployed again.

I’ve written before about whether the overwhelming focus in Washington, D.C. on “health care reform,” rather than the economy and reform of our financial sector, may ultimately have a political cost.  The theory is that even voters who might otherwise support efforts to reform our health care system may conclude that our elected officials have misplaced their priorities and have failed to address jobs, which is the most fundamental, bread-and-butter issue for many American households. Reelection campaigns based on claims of as-yet-unrealized improvements in our health care system may not have much appeal to people who have been out of a job for months and are frantic about feeding their families.

I also wonder, however, whether the legislative agenda has actually hindered the normal creation of jobs in the economy.  As the Washington Post article linked above indicates, businesses obviously are being cautious in their hiring practices, apparently due to uncertainty about what the future may bring.  Most attribute the guarded actions of employers to uncertainty about the future course of the economy generally, but I think it may well be that some of the tentativeness is due to uncertainty about what the current legislative agenda in Washington, D.C. might produce.  If businesses are unsure about whether “health care reform” legislation will saddle them with increased monetary contributions and regulatory compliance requirements for each employee, whether “cap and trade” legislation will substantially increase and complicate the cost of heating and powering their businesses, and whether new taxes will be imposed to finance other initatives, they logically might decide to hold off on hiring new employees until the additional costs and regulatory burdens become known.  Which raises a question:  why is our Congress considering legislation that would impose new costs on businesses during a time of economic struggle and thereby discourage job creation?

Double Digits

The U.S. unemployment rate has risen again, to 10.2 percent, according to figures released today by the Labor Department. The economy lost another 190,000 jobs in October, which was more than expected. Even more discouraging, the total unemployment rate, including people who have given up looking for work (and who therefore are not counted in the misleading “official” statistics) has reached 17.5 percent. The Reuters chart attached to this posting tells the sad tale in graphic form.

I heard an economist discuss the statistics on NPR today, and she said the results were encouraging because the rate of job loss has slowed. Only an economist could find the loss of 190,000 jobs to be an encouraging sign! To many people, I think, the continuing loss of hundreds of thousands of jobs is the exact opposite — a sign that the economy is very sick and is not getting better, that employers are retrenching, that more people will be out on the pavement competing for the few job openings that may occur, and that there currently is no end in sight. In view of the millions of jobs that have been lost since the recession began, how many more jobs will be be eliminated before we top out on the unemployment rate? If you are going off a cliff, does it really matter that you are going 25 m.p.h. instead of 30 m.p.h.?

In my view, the unemployment statistics tie neatly into the election results on Tuesday. Many of the pundits who have talked about the election results are missing the point. I doubt that voters in Virginia and New Jersey believed they were sending some kind of message to President Obama with their ballots. I’ve voted for governor in Ohio many times, and I don’t recall ever thinking that my choice would make a difference to the occupant of the White House. Instead, I think the results in those two states reflect significant discontent with the fact that the party in power has not been able to return people to work. Because the Democrats were the party in power in both Virginia and New Jersey, voters turned to the Republicans. This means that the Democrats are in trouble in 2010 unless things turn around.

I continue to believe one other fact is true — compared to the concern about the economy and unemployment, “health care reform” seems like a total frolic and detour. I think that many people, including the 190,000 unfortunates who lost their jobs last month, will be wondering why Congress is spending so much of its time talking about health care when the economy and unemployment are more immediate and stark problems.  If Congress’ attention is seen as being improperly focused on health care during this time when jobless people are so desperate, I think angry voters will remember those misplaced priorities the next time they vote.

A final point: Everyone understands that businesses hire people around the holidays. If the holidays come and go without any positive blip in employment statistics, and the holiday shopping season is a bust, I think we will see angry voters unlike any ever seen before.