Excerpts
JEFFREY BROWN (Newshour): Private sector hiring accounts for most job creation, but it was anemic, at best, last month. Businesses added just 57,000 jobs. That was the smallest increase in more than a year, and much of it was offset by a loss of 39,000 government jobs.
All told, 238,000 teachers and civil servants have lost their positions over the last eight months, as state and local government revenues shrink. In addition, unemployment among minorities remains far higher than among whites.
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DIANE SWONK, Mesirow Financial Holdings, Inc.: Well, I think the magnitude of the losses in the state and local government sector. We're continuing to see that as a headwind. It's a headwind that will abate over the next year, but not soon enough to make a real difference in terms of the handoff to the private sector, which just hasn't been there.
There is some good news, some light at the end of the tunnel that is not a train, and that is the fact that manufacturing is picking up, and not all of that was reflected in today's data, and we will see more of it in July. That is some good news. We're also seeing a lot of IPOs out there, and some of that will turn into job creation down the road.
But down the road is just too long to wait for all those who have been so long unemployed. The number of long-term unemployed in particular is disturbing. And the low rate of participation, the fact that people don't even have enough hope to throw their hat in the ring and actually participate in looking for a job, is particularly disturbing right now.
JEFFREY BROWN: Well, Cecilia Conrad, how far do you take it? Do you see these anemic numbers as suggesting that whatever recovery was under way really has stalled?
CECILIA CONRAD, Pomona College: I think it has stalled.
And there -- it -- there are several pieces of evidence for that. First of all, when we think about the numbers, there's evidence that we are seeing a falloff in temporary help. And temporary help is one of the ways in which a business might sort of put its toe in the water in terms of expanding employment if it has some optimism about the future.
The other things that's disturbing, we have talked a bit about the government employment and the shrinkage in that sector, which is not entirely surprising, given the fact that the recovery -- the stimulus package, which funneled some funds to help keep afloat the school districts and to keep teachers employed, has largely expired.
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JEFFREY BROWN: So, what -- what -- what disturbing trends do you see fit into what Cecilia Conrad was just talking about?
DIANE SWONK: Well, certainly dovetailing on that, in terms of the unemployment rate among single heads of household that are women, that are women -- single mothers, essentially -- is running close to 13 percent, which is part of that problem where the African-American women have now become more unemployed with the loss in government jobs.
And the loss in educational employment, the loss of teachers, you think of robbing the human capital, the investment in human capital going forward, so you wonder about how much that is undermining us going forward. Also disturbing is the fact that teenagers' unemployment is now close to 25 percent. That's an area where they are not getting critical skills.
And it could exacerbate the gap between minorities and whites going forward, because, if they're not getting critical job skills early on in life, they may not be as easy to reenter the labor force or enter the labor force later in life. So there's a lot of things that are really disturbing out there.
And, furthermore, in the wake of financial crises, one of the things that we do know from other financial crises, particularly in Europe, is 20 years later, early crises in the 1990s, we never saw the lows in unemployment before the crises, and the lingering effects were low rates of labor participation and long-term unemployment structurally high.
And that's 20 years out. And they did everything right to fix their financial crises, to structurally change their economies. And they weathered the recent financial crisis relatively well, had a V-shape recovery, and they still have -- 20 years out, have not gotten to those pre-crisis lows on unemployment.
And that is something that is particularly disturbing, because we clearly don't have the kinds of consensus that they had during those crises to fix the problem today in the United States.
Also note the following excerpts and the dates: (all open in a new page)
"Even in a Recovery, Some Jobs Won't Return" by JUSTIN LAHART, Wall Street Journal 1/12/2010
Excerpt
The downturn that started in December 2007 delivered a body blow to U.S. workers. In two years, the economy shed 7.2 million jobs, pushing the jobless rate from 5% to 10%, according to the Labor Department. The severity of the recession is reshaping the labor market. Some lost jobs will come back. But some are gone forever, going the way of typewriter repairmen and streetcar operators.
Many of the jobs created by the booms in the housing and credit markets, for example, have likely been permanently erased by the subsequent bust.
"Jobs That Aren’t Coming Back" by CATHERINE RAMPELL, New York Times 5/13/2010
Excerpt
I had an article today about structural unemployment — the idea that some people are out of work not only because demand is relatively weak, but because their skill sets don’t match what employers want (for example, they are highly specialized auto workers, but the only local job opening is for an oncologist). The typical causes of structural unemployment are the three T’s: trade, technology and changing tastes (e.g., consumers want more iPods and fewer C.D. players).
We care about structural unemployment because it means many of the jobs lost during the Great Recession may not come back in the recovery. And that has important implications for public policy, and how the government can or should be helping the jobless.
Finally....
"The bleak truth about unemployment" by Steven Pearlstein, Washington Post 9/7/2010
Excerpt
The loss of 8 million jobs reflects problems that are largely structural, not cyclical, which means they won't be brought back by fiddling with a magic dial in Washington that controls how much the government spends.
When I say that the problems are structural, I mean something more than what labor economists refer to when they talk about the mismatch between the skills of the people who of are out of work and the skills needed for the jobs that are being created - although that certainly seems to be a factor.
Since 2007, the manufacturing and construction sectors have each lost 2 million jobs, with finance, hospitality and retailing accounting for 2 million more. Those categories alone account for three-quarters of the nation's job losses, and while a fraction of those jobs might return as the economy recovers, it will be a long time before automakers or home builders or investment banks or retailers see the sales numbers they had at the height of the biggest credit bubble the world has ever seen. Some of those laid-off workers may have been in this country illegally and have now returned home, but most will be looking not only for new jobs but also new careers.
In other cases, the mismatch has more to do with geography than skill - the businesses with jobs are in one place, and the people with the necessary skills in another. But with many Americans living in homes they cannot sell, or can sell only at a price less than the value of the mortgages they took out to buy them, the willingness and ability of workers to move to a new city have been noticeably diminished.
One telltale sign of this mismatch is the number of job openings and the length of time it takes to fill them. As Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis, noted in a recent speech, those numbers have been going up over the last year, not down, as you would expect. Another sign, he said, was the widening gap in unemployment rates between the states with the highest rates and those with the lowest. Before the recession, it was just over four percentage points; now it is more than six.
The structural problems, however, go well beyond these mismatches. The reason there were 8 million additional jobs back in 2007 is that demand for goods and services was artificially - and unsustainably - inflated by cheap, plentiful credit. Between 2002 and 2007, household debt was increasing at the torrid pace of more than 10 percent annually, while business debt and the debt of state and local governments was growing at an average of 9 percent. Much of that money was used to finance present consumption.
There's a very hard truths here:
- The job market has NOT been good since 2007
- The government cannot do much to get jobs back
- Some jobs are NEVER coming back
We are just going to have to adjust to a new, hard reality, and stop listening to unrealistic political promises from ALL politicians.
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