The Reverend Al Sharpton and various labor unions have announced a March for Jobs. But I'm afraid we'll need more than marches to get jobs back.
Since the start of the Great Recession at the end of 2007, America's
potential labor force -- that is, working-age people who want jobs -- has
grown by over 7 million. But since then, the number of Americans who
actually have jobs has shrunk by more than 300,000.
In other words, we're in a deep hole and the hole is deepening. In August, the United States created no jobs at all. Zero.
America's ongoing jobs depression -- which is what it deserves to be
called -- is the worst economic calamity to hit this nation since the
Great Depression. It's also terrible news for President Obama, whose
chances for re-election now depend almost entirely on the Republican
party putting up someone so vacuous and extremist that the nation
rallies to Obama regardless.
The problem is on the demand side. Consumers (whose spending is 70%
of the economy) can't boost the American economy on their own. They're
still too burdened by debt, especially on homes that are worth less than
their mortgages. In addition, their jobs are disappearing, their pay is
dropping, their medical bills are soaring.
Consumer spending slowed again in August as incomes dropped.
Businesses, for their part, won't hire without more sales. So we're in a vicious cycle. The question is what to do about it.
When consumers and businesses can't boost the economy on their own,
the responsibility must fall to the purchaser of last resort. As John
Maynard Keynes informed us 75 years ago, that purchaser is the
Government can hire people directly to maintain the nation's parks
and playgrounds and to help in schools and hospitals. It can funnel
money to help cash-starved states and local government so they don't
have to continue to slash payrolls and public services. And it can hire
indirectly -- contracting with companies to build schools, revamp public
transportation and rebuild the nation's crumbling highways, bridges and
Not only does this create jobs but also puts money in the hands of
all the people who get the jobs, so they can turn around and buy the
goods and services they need -- generating more jobs. Not exactly rocket
But congressional Republicans are firmly opposed. Why don't
Republicans get it? Either they're knaves -- they want the economy to
stay awful through next election day so Obama gets the boot. Or they're
fools -- they've bought the lie that reducing the deficit now creates
Republicans claim businesses aren't hiring because they're uncertain
about regulatory costs, or their taxes are too high, or they can't find
the skilled workers they need. But if these were the reasons businesses
weren't hiring -- and consumer demand were growing -- we'd expect
companies to make more use of their current employees. The average
number of hours worked per week by the typical employee would be
In fact, the length of the average workweek has been dropping. In
August, it declined for the third month in a row, to 34.2 hours. That's
back to where it was at the start of the year -- barely longer than what
it was at its shortest point two years ago (33.7 hours in June 2009).
Republicans say America can't afford to spend more. In truth, we'll
be in worse shape if we don't. If the economy remains dead in the water,
the ratio of public debt to the total economy balloons.
Besides, the United States can now borrow money from the rest of the
world at fire-sale rates. Interest on the 10-year Treasury bill is now
under 2%. That's an almost unprecedented deal. With so many Americans
unemployed and so much of our infrastructure in disrepair, this is the
ideal time to get on with the work of rebuilding the nation.