Monday, July 11, 2011

June's Terrible, No Good, Very Bad Jobs Report

From the American Prospect:

According to the actual jobs report, the economy added 18,000 jobs and the unemployment rate rose to 9.2 percent. Employment in most private-sector industries was stagnant, and public-sector employment dipped down, with a total loss of 39,000 jobs. Unemployment for blacks and Latinos remained at a respective 16.2 percent and 11.6 percent, and 272,000 people dropped out of the labor force and thus out of the calculation for unemployment – keeping the overall rate lower when it should be a bit higher. Finally, as icing on the cake, job growth for May was revised down from 54,000 to an abysmal 25,000 jobs created.

In a sane country, a jobs report like this would send lawmakers into a deep panic as they scrambled to do something for the growing mass of unemployed people. As it stands, Democratic lawmakers aren’t willing to expend energy on new efforts to reduce unemployment, and Republican lawmakers have staked their ground against federally funded job creation. Instead, the entire political class is trapped in a fantasy world where deficits are the greatest threat to the health of our republic, and spending cuts are the necessary cure. Even President Obama has taken leave of reality; in his most recent weekly radio address, the ostensibly Democratic president endorsed the worst of right-wing economic fallacies:

Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.
More here.

So things aren't getting better. Things aren't going to get better because all of Washington is headed in the opposite direction. That is, our leaders are hell-bent to make things worse.

A few notes about the notion of unemployment:

The rate of job creation has to keep a certain pace in order to simply keep up with population growth. Because a number of new workers enter the economy every month, and eighteen thousand new jobs doesn't even come close to employing the people who are already in the economy but not working, cutting government spending, which necessarily entails cutting government jobs and private contractors, does nothing but compound the problem.

We're going backwards. But wait. It's actually worse than you think. Remember that unemployment numbers are massaged by two important glossings-over: official jobless statistics don't count people who have stopped looking for work, usually due to despair; official jobless statistics don't count people who are working, but for well below the pay that their skill sets earned from previous jobs, you know, accountants working as cashiers at Walgreen's and the like. In short, the 9.2 percent figure makes it look like only a tenth of Americans are desperate: indeed, when you add in people who aren't looking for work anymore and people who have taken shit jobs just to keep a roof over their heads, the real number likely doubles the "official" number, as this report from last year suggests. It's more like eighteen percent unemployment, a fucking fifth of the population in dire straits.

So the government not only isn't going to do anything about it, but they're also working hard to make it much, much worse. All for fixing the deficit. But guess what? When people don't work, they're not paying taxes. That means unemployment makes deficit spending worse. Indeed, the biggest factor running up the deficit recently is, you guessed it, unemployment. And it has a sort of magnification factor. Out of work people not only don't pay taxes: they also buy a whole hell of a lot less stuff. And when people are buying less stuff, business must necessarily scale down and lay off workers, who, as the new jobless, don't pay taxes, either. Furthermore, when businesses are selling less, they are necessarily making less profit, which, in turn, means that they're paying less taxes. Suddenly, the government is having to borrow much more simply to keep up the spending they're already doing.

In short, what we need to do, to both reign in the deficit, and put people back to work is, well, put people back to work. But no one in Washington is even considering this. Welcome to the continuing collapse, compounded and abetted by our wise leaders.

Really, we're ruled by fucktards. I mean, it's pretty sick and twisted that I, a humble restaurant server, get this shit better than most of the political class. We should all be very afraid.