The unemployment rate dropped again—but don’t bust open that champagne yet, the reality of the jobless data is more complicated than ever.
FROM THE DAILY BEAST | FEBRUARY 3, 2012
Friday’s jobs report proved what has been increasingly clear these past months: Unemployment remains stubbornly high, has stopped getting appreciably worse, appears to be getting better, and will be a chronic issue even as the overall economic picture has brightened considerably.
The headline report was unequivocally positive. The unemployment rate dropped to 8.3 percent, 243,000 jobs were created, and all of the growth was created by the private sector rather than government. Such a report should give joy to Republicans who have decried the expansion of government under Obama; but the fact that reports such as these will so boost Obama and the Democrats in an election year (“see, the stimulus and our policies are working after all!”) will temper that theoretical enthusiasm.
These numbers are statistical constructions, always provisional, and subject to subsequent revisions. Even though we know that these numbers are loose and often not quite right, they frame how we collectively assess how we are collectively doing, and this recent jobs number is only the latest in a series that show the momentum is moving forward at a much more rapid clip than most expected or even currently believe.
In the past two months, almost every indicator of economic activity has pointed upward. In fact, statistically, the U.S. economy is doing more than OK. Manufacturing surveys show strong expansion; exports are surging; overall output is increasing, and while wages and productivity are stuck in neutral, many areas of the country are seeing robust activity, ranging from Texas and Nebraska to Silicon Valley and the massive Facebook IPO looming.
The euro zone’s avoidance of its feared meltdown—care of a European Central Bank that has quietly bailed out the financial system while pretending not to—has been absolutely essential in calming markets and allowing the world to get on with what it has been focused on in the past years: the massive emergence of a global middle class of billions, needing and desiring food, clothing, shelter, jobs, and entertainment and at a price they can afford. For the first time since early last year, financial markets are behaving with a semblance of moderation and rationality, as non-Greek sovereign debt returns to more reasonable rates and companies that are providing meaningful solutions and compelling products (Starbucks, IBM, anyone?) see their shares go up while those that don’t see their market value shrink.
But then there are still challenges, starting with the high U.S. unemployment rate and the much higher underemployment issue. Even more problematic is an American body politic that is convinced that the country is on the wrong track and ill-served by a federal government that accumulates debt and by an economy that is benefitting a very few enormously and leaving far more (not quite 99 percent but certainly 25 percent) struggling, insecure, and hanging on by a thread to homes, jobs, and whatever dreams remain. The presidential primaries are dominated by a Republican base that is angry and disillusioned, convinced that the country is being led to destruction by the Democrats, while the Democrat base is increasingly convinced that the plutocrats of the 1 percent are hoarding limited riches while the rest of the country languishes and suffers. As Gary Rivlin wrote on The Daily Beast on Thursday, there are close to 50 million Americans living in poverty, and most of them have jobs. It’s just that the jobs they have don’t pay them enough to live even minimally—hence a variety of government programs to close the gap.
Into that fray comes a jobs report that offers just enough proof of all of these realities. These monthly numbers show that indeed, this may be an economy that is statistically doing well but which isn’t serving the needs of tens of millions citizens. They show that the gap between haves and have-nots continues to yawn wide, especially between educated woman with a college degree (for whom there is no employment crisis) and high-school-educated minority men who are suffering a jobless situation that is of nearly epidemic proportions. The number of long-term unemployed (more than six months) is stuck at 5.5 million—and that doesn’t count those who have stopped looking for work. Average hourly wages are up 1.9 percent over the past year, which is just enough to cover the increased costs of goods and services overall.
The real challenge—especially in an election year—is to square the drive toward “keep it simple stupid” stories with the tapestry of American realities. We have one unemployment rate but not one unemployment reality. Having a job alone is no guarantee of an ability to maintain or create a life in this country, given how little many jobs pay. That said, for all of the hand-wringing, the American economic system provides more jobs and more income for a significant majority of the population than most societies ever have. Political debate is currently ill-suited to holding both truths as self-evident, and the media world that demands even shorter bursts and ever more catchy pegs does not celebrate headlines such as, “Things are sort of good, could be better, could be worse and no one knows how to change that.”
So this report will be embraced by Democrats and send shivers through Republicans (how sad of course that in an election year, the contesting party will welcome bad news and fear good). It will be used by Republicans and others to refute the mantra of the 1 percent doing well at the expense of the 99 percent. But none of that will alter the fact that today’s new dollop of data confirms what we should already know: this is an economic system in flux that is in much better shape than our fears and disappointments say and which is a far cry from the balance, affluence, and harmony that so many of us continue to crave.