Robert Reich: “No Jobs Recovery”
Posted by Larry Doyle on April 5, 2010 8:29 AM |
Where is the jobs growth? If we listen to many in Washington or the general media, Friday’s employment report (indicating +162k in non-farm payroll) was a turning point in our labor markets. Was it really? Let’s listen to former Labor Secretary Robert Reich and get his take.
Although I have a decidedly different point of view than Reich on many economic and political topics, I do believe that Reich speaks from his heart and presents what he believes to be the truth as opposed to sugarcoating data to further promote a political agenda.
While Reich was in Washington as President Clinton’s Secretary of Labor, he may have been forced to drink the kool-aid and push the agenda but he certainly is not doing that now. Why am I praising Reich? As a dyed in the wool Democrat, Reich is not blindly falling in line with his liberal brethren to tout the Obama administration’s policies and programs. I see further evidence of Reich’s independence in his review of the Friday jobs report. Reich writes, No Jobs Recovery:
The US economy added 162,000 jobs in March. Great news until you look more closely. In March, the federal government began hiring census takers big time. These are six-month temp jobs, and they tell us nothing about underlying trends in the labor market. It’s hard to gauge precisely how many were hired — probably between 100,000 and 140,000, although some estimates put the hiring as low as 48,000. Almost a million census workers will need to be hired over the next few months. Subtract these, and today’s job numbers are good but nothing to write home about.
There are some positive signs. Manufacturing payrolls expanded a bit, heath care employers added 27,000 jobs, and about 40,000 private-sector temp jobs were added. But payrolls continue to be slashed in financial services and the information industry.
Two big things to bear in mind:
First, government spending on last year’s giant stimulus is still near its peak, and the Fed continues to hold down interest rates. Without these props, it’s far from clear we’d have any job growth at all.
Second, since the start of the Great Recession, the economy has lost 8.4 million jobs and failed to create another 2.7 million needed just to keep up with population growth. That means we’re more than 11 million in the hole right now. And that hole keeps deepening every month we fail to add at least 150,000 new jobs, again reflecting population growth.
A census-taking job is better than no job, but it’s no substitute for the real thing.
Bottom line: This is no jobs recovery.
Robert Reich may not be making many friends amongst his Democratic brethren and his fellow economic advisors at 1600 Pennsylvania Avenue, but here at Sense on Cents he receives growing admiration for providing further insights, details, and transparency on our nation’s ‘walking pneumonia’-type economy.