Well, not quite. The strike at Verizon reduced the labor force by
45,000. Minnesota government employees returned to work, adding 22,000.
So in reality, America added 23,000 jobs. Almost zero.
In reality, worse than zero. We need 125,000 a month merely to keep up with population growth. So the hole continues to deepen.
Since this Depression began at the end of 2007, America's potential
labor force -- working-age people who want jobs -- has grown by over 7
million. But since then, the number of Americans with jobs has shrunk by
more than 300,000.
If this doesn't prompt President Obama to unveil a bold jobs plan next Thursday, I don't know what will.
The problem is on the demand side. Consumers (whose spending is 70
percent of the economy) can't boost the economy on their own. They're
still too burdened by debt, especially on homes that are worth less than
their mortgages. Their jobs are disappearing, their pay is dropping,
their medical bills are soaring.
And businesses won't hire without more sales.
So we're in a vicous cycle.
Republicans continue to claim businesses aren't hiring because
they're uncertain about regulatory costs. Or they can't find the skilled
workers they need.
Baloney. If these were the reasons businesses weren't hiring -- and
demand were growing -- you'd expect companies to make more use of their
current employees. The length of the average workweek would be
But 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).
It's demand, stupid.
So what does a sane nation do when the consumers and businesses can't boost the economy on their own?
Government becomes the purchaser of last resort. It hires directly (a
new WPA and Civilian Conservation Corps, for example). It helps states
and locales, so they don't have to continue to slash payrolls and public
services. (The help could be structured as a loan, to be repaid when
unemployment drops to, say, 6 percent.)
And it hires indirectly -- contracting with companies to rebuild our
crumbling infrastructure, including school buildings, to take another
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.
Get it? Not exactly rocket science.