Last Friday, the US Bureau of Labor Statistics once again released its latest Employment Situation Summary for January, 2011. Once again the number tell some interesting stories: though the unemployment rate fell by what appears to be a healthy 0.4 percentage points, the decline is in large part due to the Bureau’s practice of trimming off unemployed persons after they’ve been out of work for more than 99 weeks (5 weeks less than two years). If the long-term unemployed are factored back into their numbers, the situation is basically unchanged.
What’s really important right now is job creation, because without new jobs, the unemployed can’t get back to work (nor can we absorb our full output of new graduates or other workers entering the ranks of the full-time employed for the first time). Those numbers are not too encouraging just yet, whether you look at the average since last February (2010) of 93,000 per month, or the most recent month at 36,000.
As lots of economists have observed, job growth right now is sufficient only to absorb population growth, or those new workers seeking to enter the workforce for the first time. It is nowhere near enough to absorb the 14 to 18 million unemployed (depending on whether you count those out of work for more than 99 weeks: I do, because those people would return to work if jobs were there for them to fill). Nor is it enough for the 8.4 so-called “involuntary part-time workers” to convert back from part- to full-time employment as they would like to.
We really need to see job growth in excess of 200,000 new jobs per month for an extended period of time (and 300,000 or more would be even better) to whittle away at the huge balance of unemployed or underemployed workers currently looking for some or better employment before things can really start to improve. I’m starting to wonder just how we’re going to pull that off as a country. I sincerely wish the Republicans and Democrats would stop bickering about the declining tax base that we do manage to collect, and start thinking more and harder about ways to restore that tax base to its proper levels. That is I’d like to see them mount a concerted effort to bring unemployment back down to its “normal” range between 4.5-6.0 percent. That would probably do more to fix the deficit and help the budget than fighting over “job-killing Obamacare,” or engaging in the kind of mental gymnastics required to simultaneously balk at raising the federal debt ceiling and cutting entitlements.