Another mediocre US jobs report
5 April 2014
The US Labor Department said Friday that the economy added 192,000 jobs in March, while the unemployment rate remained unchanged at 6.7 percent, in another month of tepid job growth. Economists had predicted the addition of 206,000 jobs and that the unemployment rate would fall to 6.6 percent.
The jobs report points to a continued slump following the economic collapse five-and-a-half years ago. It comes as the cutoff of federal extended jobless benefits enters its fourth month. The number of people who have lost benefits is now at 2.3 million, along with 1.2 million dependent children they support.
The White House responded predictably to Friday’s report, with Jason Furman, chairman of the Council of Economic Advisers, declaring that “today’s data indicates that the recovery is continuing to unfold.”
Furman added that Obama had urged Congress to reinstate federal jobless benefits and raise the minimum wage. This is a fraud. In fact, the White House and congressional Democrats bear responsibility for the cutoff of jobless benefits, having ensured their lapse by refusing to make the extension of jobless pay a precondition for the budget deal worked out with Republicans at the end of last year.
The cutoff of unemployment benefits is part of an overall policy, supported by both Democrats and Republicans, aimed at restructuring class relations through a historically unprecedented assault on the jobs and living standards of the working class.
The total amount of federal jobless pay that has been lost as a result of the December 28 cutoff is now more than $5 billion, according to an analysis by the National Employment Law Project. This income has come directly from the most vulnerable sections of the population.
There are officially 10.5 million people in the United States who are actively looking for work. One third of these, or some 3.7 million people, are considered long-term unemployed, having been out of work for more than six months.
The percentage of working-age adults who have a job or are seeking work, known as the labor force participation rate, edged up to 63.2 percent last month. However, it remains near the lowest level since the early 1980s, as millions of unemployed have fallen out of the labor force after giving up hope of finding work. According to the Economic Policy Institute, there are some 5.66 million such “missing workers.”
Congress continues to stall on legislation that would restore extended federal jobless benefits. The Senate announced a bipartisan deal to extend benefits more than two weeks ago, but it is not scheduled to vote on the agreement until next week.
The Senate deal extends jobless benefits for only five months (three of which are already retroactive). This extension is paid for by cuts to pension funding by corporations and increased user fees on airlines. Even so, the House Republican leadership has declared its opposition, meaning that, even if passes the Senate, the proposal is likely to stall in the House.
The average duration of unemployment is now about 36 weeks, or about 2.5 months longer than the amount of time that most states provide unemployment, set at 26 weeks. A recent survey by the Brookings Institution suggests that only ten percent of the long-term unemployed will have full-time work in a year.
The present rate of job creation will do nothing to change that situation. The US economy needs to create about 160,000 jobs per month to keep up with population growth, meaning that job growth is barely making a dent in the actual number of jobs available to the unemployed. Over the past three months, the US economy has created an average of 173,000 jobs per month, significantly lower than the average monthly job growth last year.
March marks the first month that the private sector has more aggregate jobs than just before the 2008 crash. This does not take into account the fact that the working-age population has grown by 6 million people in the intervening five-and-a-half years. “We haven’t really made up the losses,” Dean Baker, co-director of the Center for Economic and Policy Research, told the Los Angeles Times.
Most of the growth in jobs has been in part-time and temporary work, including in the retail and service sector. In March, there were nearly 3 million fewer manufacturing and construction jobs than there were before the crash.
Since 2008, the number of public-sector jobs has shrunk by more than half a million, as government bodies, at the local, state and federal level, slash payrolls in education and other sectors.
The March report expressed these trends. A “significant portion” of the jobs that were created were “in lower-wage sectors of the economy, like retail, temporary help services, food services and drinking places, and home health care that pay wages too low to sustain families,” noted the National Employment Law Project.
Manufacturing lost 1,000 jobs and the federal government slashed 9,000 jobs, while retail sales added 21,300 positions. The number of people working part-time for economic reasons likewise grew by 223,000 in March, while the number of temporary jobs grew by 28,500.