Don't Laud the Jobless Drop
November’s dip in the official unemployment rate is nothing to clap about. Scrutiny of the details reveals that the new figure of 8.6 percent is due mostly to 315,000 Americans dropping out of the search for work, and most of the newly created positions were low-paying ones. That includes temporary jobs created to support the spike in commerce that comes with the holiday season.
You can rest assured, however, that those facts won’t stop a spin-savvy Obama administration from taking credit for a job well done as the 2012 campaign season kicks off.
Interestingly, The New York Times offered two different takes on the new numbers. “Somehow the American economy appears to be getting better,” the author of an optimistic article began, before suggesting that the European debt crisis, instability in the Middle East and the slowdown of Chinese industry were greater concerns than domestic joblessness, and that November’s decline was a “welcome relief.”
Elsewhere, the paper’s editors were less sanguine. –ARK
The New York Times:
Most of the decline in November’s unemployment rate was not because jobless people found new work. Rather, it is because 315,000 people dropped out of the work force, a reflection of extraordinarily weak demand by employers for new workers. It is also a sign of socioeconomic decline, of wasted resources and untapped potential, the human equivalent of boarded-up Main Streets and shuttered factories.
The job growth numbers also come with caveats. More jobs were created than economists expected, but with the job market so weak for so long, that is a low bar. It would take nearly 11 million new jobs to replace the ones that were lost during the recession and to keep up with the growth in the working-age population in the last four years. To fill that gap would require 275,000 new jobs a month for the next five years. That’s not in the cards. Even with the better-than-expected job growth in the past three months, the economy added only 143,000 jobs on average.
And most of those new jobs are low-end ones. In November, for example, big job-growth areas included retail sales, bartending and temporary services. Teachers and other public employees continued to lose jobs, and job growth in construction and manufacturing were basically flat. Indeed, work — once the pathway to a rising standard of living — has become for many a route to downward mobility. Motoko Rich reported in The Times recently on new research showing that most people who lost their jobs in recent years now make less and have not maintained their lifestyles, with many experiencing what they describe as drastic — and probably irreversible — declines in income.