Unemployment and economic distress

Unemployment and economic distress

July 17th, 2011 in Opinion Free Press

Not since the Great Depression of the 1930s has unemployment in the United States remained so high for so long. Today, we are in our 29th month of unemployment above 8 percent.

So surely the last thing most Americans wanted to hear when the latest report on unemployment came out was that joblessness has risen again. After all, we have been told that the U.S. economy has been in a "recovery" for many months now. But with unemployment having gone up again in June, it is getting hard to distinguish the so-called "recovery" from "recession."

Analysts thought the new unemployment report would show a big jump in job creation. But it showed the opposite. Joblessness was 9.1 percent in May, but it rose to 9.2 percent in June. Not nearly enough jobs were created to keep up with population growth, let alone to begin actually reducing the rate of joblessness.

Manufacturing hiring remained weak, and there were job losses in construction and financial services. Meanwhile, average work hours and hourly earnings both dropped in June, which means that even people who are fortunate enough to have jobs are hardly home free in this economy.

The unemployment figure would have been even worse, except that almost 300,000 Americans gave up looking for work in June and are no longer technically counted as jobless - though they clearly are. When those who need full-time work but can find only part-time employment are added in, the so-called "underemployment" rate jumped from 15.8 percent in May to an even more painful 16.2 percent in June.

"It's just an across-the-board retreat," Heidi Shierholz, an economist at the Economic Policy Institute, told Tribune Newspapers. She pointed out that the discouraging jobs report came on top of similarly bad economic news a month earlier.

"This is two months of really scary reports," she said.

The latest report "raised doubts that the economy will rebound in the second half of the year after hitting a spring slump," The Associated Press reported. In fact, respected analysts have already sharply downgraded their expectations of growth for the rest of 2011.

We can see why they would do that. By this point after the last three recessions that America went through, unemployment averaged only 6.8 percent - far lower than today's 9.2 percent.

What makes these numbers more frustrating is that the Obama administration and the president's Democrat allies in Congress are doubling down on the very policies that are making things worse.

The $862 billion stimulus that Democrats enacted in early 2009 to "create or save" jobs was supposed to keep unemployment below 8 percent, the administration said. That obviously didn't work. And yet the president and Democrats argue that even more spending - and higher taxes - is the solution to our weak economy.

If all the government's "stimulus" spending hasn't worked over the past two years, why does the administration think that still higher federal spending now will turn things around and get people working?

What businesses - including the small businesses that provide so many of our country's jobs - need is the assurance that Washington is not going to raise their taxes. That would let companies hire more workers without having to fear that a suddenly increased tax burden would take away whatever financial gains they might earn from expanding operations.

And what all our people need is for Congress to put a brake on the wasteful and often unconstitutional federal spending that is contributing to high unemployment and expanding our disastrous $14.3 trillion national debt.