The unequal reality of Friday’s jobs report
Today’s U.S. Labor Department report on jobs confirms what we’ve known for more than a year: We have entered a new normal for jobs, with marginal gains, marginal losses and higher levels of unemployment becoming the unfortunate norm.
It also confirms that where you live, what you do, what race you are and what level of education you’ve attained profoundly shape your employment prospects. In spite of claims of a youth unemployment crisis and ample anecdotes about a punishing job markets for recent college grads, there is – statistically – no job crisis for the college-educated, with their unemployment rate hovering around 4 percent. That contrasts with the national average of 7.9 percent and an average in the mid-teens for those with a high-school degree. For African Americans of any education level, the rate is 14.3 percent; for Hispanics, 10 percent; for Asian Americans, 4.9 percent. If you live in Nebraska or North Dakota, the jobless rate is less than 4 percent, thanks to robust prices for grains and corn and the oil and gas of the shale revolution. If you live in Oklahoma, Iowa, Minnesota or Kansas, the rate is below 6 percent. But in California, Nevada or New Jersey, it is at or above 10 percent.
Above all, the jobs report confirms that the campaign rhetoric about what the next president and Congress will do to “get jobs moving again” is hollow at best. As the numbers starkly demonstrate, the notion of an evenly distributed national jobs crisis is a fiction. Yet all the vague plans touted by Barack Obama and Mitt Romney treat the challenge of employment in 21st century America as a shared national dilemma. Unemployment is a shared affliction the way Hurricane Sandy is a shared affliction. People who live in the Northeast and Northwest may be linked by common citizenship and a shared sense of community (at least in crisis) but not by equivalent pain and suffering. Same goes for unemployment.
A genuine and realistic set of government promises would first acknowledge that any long-term approach to jobs in America should start with identifying the unemployment problem as what it is: a regional one that affects certain industries and skills and workers much more than others. The reason that hasn’t happened is because our national and state politics for the most part avoid discussing issues such as class, education and race, unless it’s in highly coded fashion. The debate about taxing the wealthy is about as close as America comes to discussing class, and that doesn’t even approach a clear-eyed discussion about who is thriving and who is not. Romney’s dismissal of the 47 percent who receive benefits from the government and pay few taxes is another way of talking about the problem, and not the most constructive.
Even more, the notion that the government can “solve” the jobs problem is a classic example of over-promising and under-delivering. The only way an administration can create 12 million jobs in four years, as Romney has promised, is if the millions now receiving unemployment benefits are turned into government employees, in the style of the New Deal-era Works Progress Administration. You could make a persuasive case for that – after all, if people are being paid not to work, why not instead pay them to work, especially given that many of those unemployed are men ‑ yes, gender plays a role, given that male unemployment is higher ‑ who have construction and heavy labor skills that would be perfectly suited to infrastructure projects that America needs. Given that neither party nor candidate has floated that idea, we are left with the hope that higher growth and better government policies will spur employment.
Republicans trumpet the idea that lower taxes, less regulation and end to uncertainty will restore the trajectory of growth and hiring. Democrats place more faith in better programs and spending. Neither is a long-term fix. It’s possible that higher growth will come without much higher employment. As economists have come to realize, the models that correlate growth to employment have broken down largely because of technology and globalization. Manufacturing renaissance? That boosts growth and the gross domestic product, but the same factory that employed thousands in the 1960s employs hundreds today; it produces more because of robotics and inventory software that allows the company to calibrate demand and supply much more tightly. In short, more GDP doesn’t lead to nearly as much labor-force growth.
As for spending and government programs, even Keynes well understood that those work as short-term supports only if they lead to long-term self-sustaining activity. They are training wheels. You cannot endlessly stimulate your way to a sustainable economy and high employment.
An honest approach to jobs would cease to discuss the problems as a ubiquitous crisis. The challenge of tens of millions unemployed, underemployed and employed in jobs that barely pay a subsistence wage is juxtaposed with a larger slice of the population that is thriving, entrepreneurial and moving forward with or without the benefits (or harms) of old and new policies. The U.S. economy is not living up to expectations, but it is providing fertile ground for a significant majority of people to live their lives and attempt to fulfill their dreams. That is less than it was doing in the mid-20th century, but less true is not the same as untrue.
A relentless focus on problems is only constructive if it’s balanced by a reasonable recognition of underlying strengths. The United States has a structural unemployment issue that is new and unfamiliar, and constructive responses are being delayed because of a collective inability to acknowledge the nature of the challenge. There is zero evidence that the current situation is simply a cyclical response to a difficult time that will magically dissipate if government does things differently or stops doing things at all. Nor is there any evidence other than blind faith in past patterns that the business cycle will heal itself in the form of widespread and well-paid jobs. The U.S. and the global economic systems of the early 21st century are remarkably fluid, uncharted and daunting. Those systems are also truly brave new worlds of remarkable wealth creation and opportunities. Whoever wins the election next week will have to grapple with that. It will be in our collective interest if it is faced realistically.
PHOTO: Applicants fill out forms during a job fair at the Southeast LA-Crenshaw WorkSource Center in Los Angeles November 20, 2009. REUTERS/Mario Anzuoni