Jobs report shows why job growth trumps deficit reduction
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Robert Reich Guest blogger
Today鈥檚 jobs report shows an economy that鈥檚 still moving in the right direction but way too slowly, which is why Washington鈥檚 continuing obsession with the federal budget deficit is insane. Jobs and growth must come first.
The cost of borrowing is so low 鈥� the yield on the ten-year Treasury is near historic lows 鈥� and the need for more jobs and better wages so high, and our infrastructure so neglected, that a reasonable government would borrow more to put more Americans to work rebuilding the nation.
Yes, unemployment is down slightly and 146,000 new jobs were created in November. That鈥檚 some progress. But don鈥檛 be overwhelmed by the hype coming out of Wall Street and the White House, both of which would like the public to believe things are going quite well.
The fact is some 350,000 more people stopped looking for jobs in November, and the percent of the working-age population currently employed continues to drop 鈥� now at 63.6%, almost the lowest in 30 years. Meanwhile, the average workweek is stuck at 34.4 hours.聽
The slowness of the jobs recovery isn鈥檛 because of Hurricane Sandy, which it turns out had very little impact on November鈥檚 job numbers (the hurricane鈥檚 negative effects were more than offset by a Thanksgiving earlier than normal, and an early start to the Christmas buying season). And it鈥檚 not because of any uncertainty over the looming 鈥渇iscal cliff.鈥� Most consumers in November remained oblivious about any pending cliff.
The reason the economy is still under-performing is overall demand is inadequate. Businesses won鈥檛 create more jobs without enough customers. But consumers can鈥檛 and won鈥檛 spend because they don鈥檛 have the money. Unless or until the private sector 鈥� businesses and consumers 鈥� are able to boost the economy, government must be the spender of last resort.
But the nation has bought into the Republican frame of thinking that we have to 鈥済et our fiscal house in order鈥� before the economy can get back on track. Although Barack Obama was reelected and Democrats gained seats in the House and Senate, that frame is still dominating debate.
And even though we鈥檙e near a fiscal cliff that illustrates how dangerous deficit reduction can be when so many people are still unemployed, the White House and the Democrats seem incapable of changing the frame of debate.
But remember: Jobs must come first. Job creation must be our first priority.
