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We Can’t Wait That Long

Nov 08, 2010 | By: Mr_Blue | Tags: unemployment, jobs, job guarantee

On Friday the Bureau Labor Statistics released October job numbers. The numbers showed slow job growth and high unemployment. It doesn’t have to be this way.

Here is the latest report: LINK

Before we review the numbers let me explain why jobs created number (or payrolls) increased and the unemployment rate remained unchanged. The difference is because of the source of the information - surveys. The jobs created/payroll number is derived from a survey of businesses and governments (Establishment Survey). The unemployment rate is derived from a survey of individuals (Household Survey). The problem is that the surveys are not taken from related samples - meaning that individuals may or may not have been (or are) working with those businesses surveyed.

Now the numbers.

+ Private sector jobs increased by 159,000 in October.
+ Temporary jobs increased by 35,000.
+ Most of jobs created in October were in health care, retail trade, restaurants and mining.
+ Unemployment rate held steady at 9.6%.
+ 6.2 million people were considered long-term unemployed (jobless for 27 weeks or more).
+ 2.6 million people were marginally attached to work force (an increase) of those 1.2 million were discouraged workers (given up looking for job)
+ U6 unemployment rate - Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force was steady at 17% for October.

This was a good jobs report compared to past months but we still have a long way to go to dig ourselves out of this Jobs Hole. Economic Policy Institute provided some eye-opening context to the Jobs Hole:

+ Labor market is 7.5 million jobs below where it was at the start of the recession in December 2007.
+ To get down to the pre-recession unemployment rate within five years, the labor market would have to add around 300,000 jobs every month for that entire period.
+ If the rate of job growth were to continue at October’s rate, the economy would achieve prerecession unemployment rates (5% in December 2007) in roughly 20 years.

20 years! We can’t afford to wait that long. It will be very painful to wait five years. The social costs of high unemployment are piling up. But it doesn’t have to be this way. History tells us what may work for us again. Yes, a direct jobs program but it’s time to make a direct jobs program permanent. It’s time for a Job Guarantee.

Good luck.