The danger in a blip of good news is that it’s simply that: a blip. It is certainly a good thing that the data shows that 162,000 jobs were added in March. But, the truth is that this is not much to celebrate. And it actually should be a siren to move dramatically to embrace a much more ambitious jobs program on the order of $1 trillion.
Here is the grim math, and it is laid out quite well in a briefing paper by the Economic Policy Institute. Because my EPI friends are a bit wonky even for me, let me cut to the basics: we are in deep, deep trouble.
The key point in the EPI analysis:
The U.S .economy has lost 8.4 million jobs since the recession began, while it should have added 2.7 million jobs simply to keep up with population growth. This means the labor market is now roughly 11.1 million jobs below what would be needed to restore the pre-recession unemployment rate.
And the EPI folks point out correctly that the numbers don’t reflect at least two other points:
First, a whole lot of people who gave up looking for work, and therefore aren’t counted among the 9.7 "steady" unemployment rate, will flow back into the labor market this year as they read the political analysis that the job market is improving. That will actually hike the unemployment rate.
Second, there is just a basic fact that has changed. Employers used to think–gee, I have these great workers and, yes, it’s a recession but I am going to hang on to as many workers as I can because when the recession ends, I want to be back in swing with these workers and it will cost me more to find the workers I want and train them to do the work that my great workers do now.
But, along with the mentality in the corporate executive office that led to gargantuan, obscene pay and benefits packages for the top few executives (leaving nothing on the table for the people who actually make companies run), out the window went any loyalty to workers, particularly during hard times.
Instead, it’s now common–and, I fear, the wave of the future for as far as the eye can see–to dump workers, bank any productivity gains registered by hard-working people and use those gains for the bottom line…which translates not into increased wages or benefits for the average Joe or Sally but larger pay and benefits and stock options for the top executives.
Ok, so what do we do? It seems to me that the atrocious, calamitous state of work in America calls for a state of national emergency thinking.
We need another $1 trillion invested in the economy now. Not in the form of inefficient tax cuts (and the $787 billion stimulus in 2009 was a third tax cuts–wasteful, in my view). But, in direct creation of jobs–which means infrastructure and direct aid to states and municipalities to prevent the layoffs of hundreds of thousands of workers.
If you doubt that our infrastructure needs this investment, just a few years ago, in 2005, the American Society of Civil Engineers estimated that $1.6 trillion was needed over five years just to bring existing infrastructure back into decent shape–let alone make the country ready for a reduced carbon environment. We invest a puny 2.4% of GDP in our infrastructure; China puts in 9 percent and Europe 5 percent. Other estimates peg our transportation infrastructure needs at $225 billion each year for the next 50 years.
We have two options. We can listen to the Washington insiders who are wringing their hands about the fiscal deficit and long-term debt.
Or we can say that the greatest crisis is the lack of good-paying work in America–a crisis that, aside from hurting revenues (people who don’t have work don’t buy things), will leave an indelible scar on millions of people for generations to come. People who don’t have decent work for prolonged periods of time adjust their lives–the way they think about themselves and the way they talk to their children about what to aspire to in the future.
It is a national emergency.