Send a Tweet
Most Popular Choices
Share on Facebook 7 Share on Twitter Printer Friendly Page More Sharing
OpEdNews Op Eds    H3'ed 10/1/11

The American Jobs Depression, and How to Get Out of It

By       (Page 1 of 2 pages)
(# of views)   4 comments
Author 47089
Follow Me on Twitter     Message Robert Reich
Become a Fan
  (129 fans)

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.

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 ports.

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 science.

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 more jobs.

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 increasing.

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.

Next Page  1  |  2

 

Must Read 3   Well Said 2   Interesting 2  
Rate It | View Ratings

Robert Reich Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

Robert Reich, former U.S. Secretary of Labor and Professor of Public Policy at the University of California at Berkeley, has a new film, "Inequality for All," to be released September 27. He blogs at www.robertreich.org.

Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Writers Guidelines
Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

STAY IN THE KNOW
If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEdNews Newsletter
Name
Email
   (Opens new browser window)
 

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Trump Cornered

The Republican's Big Lies About Jobs (And Why Obama Must Repudiate Them)

Paul Ryan Still Doesn't Get It

What Mitt Romney Really Represents

What to Do About Disloyal Corporations

The Gas Wars

To View Comments or Join the Conversation: