Wanted: Leadership on Jobs

NYT, 10/4/09. By every meaningful measure, the weak job market deteriorated further in September. Federal stimulus spending has prevented an even worse decline. But that is cold comfort for the tens of millions of working men and women for whom conditions are bleak and getting bleaker, and for the millions more who are destined to lose their jobs — or to have their hours and compensation cut — in the months and years to come. Congress must enact emergency unemployment benefits without delay. Equally important, the Obama administration must flesh out its commitment to ensure that economic recovery does not leave middle-class and low-income families behind. September was the 21st straight month of job loss — the longest unbroken stretch of losses since record-keeping began in 1939 — bringing to 7.2 million the number of positions that have been axed since December 2007. And that understates the damage. During the recession, the economy has failed to create another 2.7 million jobs that were needed simply to employ new workers — like high school and college graduates, immigrants and stay-at-home parents who want to go back to work.

The unemployment rate for September — 9.8 percent — also understates the damage. It would have been higher but for the fact that 571,000 people dropped out of the work force last month — in general, it’s assumed, because they’ve despaired of finding work. If they had kept looking, they would have been counted as unemployed.

The combination of a rising unemployment rate and a quickening pace of labor-force dropouts is especially worrisome. In September, the employment rate for all workers — defined as the share of the population with a job — fell to 58.8 percent, its lowest level in more than 25 years. For adult men, who have been particularly hard hit by job loss in this recession, the employment rate fell to 67 percent, its lowest level since the government began keeping track in 1948. Before this recession, that rate had never dropped below 70.5 percent.

A shrinking labor force represents a tremendous waste of talent and potential, a loss of value that will not be entirely retrievable. Widespread joblessness among men is particularly devastating for the economy and many families, because men tend to earn more than women and to have jobs offering health insurance.

To make matters worse, unemployment among men and women is proving relentless. Of the 15.1 million people who are now officially counted as unemployed, over a third have been out of work for 27 weeks or longer, the highest percentage of long-term unemployment on record. By the end of the year, benefits will expire for more than one million unemployed workers. The House has passed a bare-bones extension of benefits; the Senate has a better bill, covering more long-term unemployed workers, and should pass it first thing this week.

The real work, however, lies ahead. Economic recovery will not automatically replace the jobs that have been lost so far in this recession. Nor will higher levels of learning and skill — necessary as they are — magically create jobs, especially in the numbers that are needed.

If successful, ambitious goals like health care reform and energy legislation may generate jobs, but officials have not persuasively linked them to job growth. Congress and the administration also have not done enough to directly create jobs. That could be done with more stimulus to spur job creation, or a large federal jobs program, or tax credits for hiring, or all three. Or surprise us. Just don’t pretend that the deteriorating jobs picture will self-correct, or act as if it is tolerable.