How Slow Can It Go?
An editorial from the June 2, 2012 New York Times.
There are two unavoidable conclusions from the May jobs report: The slow economy is getting slower, and there is no help on the way.
Republicans in Congress seem more determined not only to block any boost that President Obama wants to give the economy, but they are preparing to take the nation’s credit rating hostage again over the debt ceiling. Mitt Romney, the Republican presumptive presidential nominee, has no new ideas.
The statistics on Friday were daunting. Only 69,000 jobs were created last month, far lower than what’s needed just to keep up with population growth. The job tallies for March and April, shabby to begin with, were revised down, for an average monthly tally of 96,000 over the past three months, versus 252,000 in the prior three months.
The weakness was not only displayed in job growth. Average weekly wages declined in May, to $805, as a measly two-cents-an-hour raise was more than clawed back by a drop to 34.4 hours in the length of the typical workweek.
Similarly, the rise in the number of people looking for work is normally considered a sign of optimism, but, on closer inspection, it appears to be simply the reversal of a drop in job-seekers in April.
Granted, it is better for jobless workers to be actively looking for work than sitting on the sidelines. But without enough jobs to go around, the inevitable result is higher official unemployment. The jobless rate ticked up from 8.1 percent in April to 8.2 percent in May, or 12.7 million people. Of those, 42.8 percent, or 5.4 million people, have been out of work for more than six months, a profound measure of personal suffering and economic decline.
There’s no sign that Washington is prepared to shoulder this responsibility. President Obama’s last big push for job creation, the $450 billion package proposed last fall, would have created an estimated 1.3 million to 1.9 million jobs by providing aid to states for teachers and other vital public employees, investments in infrastructure and tax breaks for new hiring. It was filibustered by Senate Republicans and not brought up for a vote in the Republican-dominated House, with Republican lawmakers claiming that deficit reduction was more important. Since then, they have balked at even smaller administration proposals, like modest investments in clean-energy projects.
Blocking constructive action is bad enough, but it’s not the worst of it. Recently, the House speaker, John Boehner, has ratcheted up economic uncertainty by pledging to force another showdown this year over legislation to raise the debt ceiling. A debt-ceiling debacle would come on top of the expiration at the end of 2012 of the Bush-era tax cuts and the onset of some $1 trillion in automatic spending cuts. If allowed to take effect as planned, those measures would take a huge bite out of growth, further weakening the economy.
More uncertainty means less consumer and business confidence — and less hiring.
In response to the jobs report, Mr. Romney scoffed at Mr. Obama’s campaign slogan, “forward,” saying the president was leading the nation backward. In fact, the way forward has been blocked, time and again, by Republicans pushing the same tax-cut and deregulatory policies, now espoused by Mr. Romney, that have failed in the past to spur the economy.
In the meantime, millions of Americans need jobs.
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Click here to read the original editorial in The New York Times, June 2, 2012.