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NationofChange / Op-Ed
Published: Saturday 6 October 2012
“In political terms, headlines are everything – and most major media are leading with the drop in the unemployment rate.”
The Politics of the Jobs Report
The White House is breathing easier this morning. The Bureau of Labor Statistics reports the unemployment rate dropped to 7.8 percent – the first time it’s been under 8 percent in 43 months.
In political terms, headlines are everything – and most major media are leading with the drop in the unemployment rate.
Look more closely, though, and the picture is murkier. According to the separate payroll survey undertaken by the BLS, just 114,000 new jobs were added in September. At least 125,000 are needed per month just to keep up with population growth. Yet August’s job number was revised upward to 142,000, and July’s to 181,000.
In other words, we’re still crawling out of the deep crater we fell into in 2008 and 2009. The percent of the working-age population now working or actively looking for work is higher than it was, but still near a thirty-year low.
But at least we’re crawling out.
Romney says we’re not doing well enough, and he’s right. But the prescriptions he’s offering – more tax cuts for the rich and for big companies – won’t do anything except enlarge the budget deficit. And the cuts he proposes in public investments like education and infrastructure, and safety nets like Medicare and Medicaid, will take money out of the pockets of people who not only desperately need it but whose spending is necessary to keep the tepid recovery going.
Romney promises if elected the economy will create 12 million new jobs in his first term. If we were back in a normal economy, that number wouldn’t be hard to reach. Bill Clinton presided over an economy that generated 22 million new jobs in eight years – and that was more than a decade ago when the economy and working-age population were smaller than now.
Both Obama and Romney assume the recovery will continue, even at a slow pace, and that we’ll be back to normal at some point. But I’m not at all sure. “Normal” is what got us into this mess in the first place. The concentration of income and wealth at the top has robbed the vast middle class of the purchasing power it needs to generate a full recovery – something that was masked by borrowing against rising home values, but can no longer be denied. Unless or until this structural problem is dealt with, we won’t be back to normal.
This article was originally posted on Robert Reich's blog.
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ABOUT Robert Reich
ROBERT B. REICH, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at www.robertreich.org.
Top Stories
By Tara Culp- Ressler
6 comments on "The Politics of the Jobs Report"
October 09, 2012 3:23pm
Why does the liberal mainstream media and people on the far left continue to spout off empty rhetoric and blatant lies about republicans and tax cuts for the “super rich”? It’s getting old. Conservatives don’t want to lower taxes for the super rich, they want to lower taxes for everyone. Reich keeps trying to hammer home this misnomer time and time again – “Romney says we’re not doing well enough, and he’s right. But the prescriptions he’s offering – more tax cuts for the rich and for big companies – won’t do anything except enlarge the budget deficit.” When has Romney ever said he wants to cut taxes for just the rich and big companies? He advocates lower taxes in general for ALL citizens. Why would you people oppose that? And adding to the budget deficit?!? Obama has added $6 Trillion to our national debt in under 4 years!!! Do you think the government takes too little of what you earn? What is the magic number . . . 50%? 70%? 90%? The author’s main argument here is founded on the crux that republicans want to cut taxes only for the super rich, which is a complete inaccuracy, therefore his argument is logically flawed. The far left is just so good at breaking people up into groups (rich, poor, middle class, black, Hispanics, young, elderly, gay, straight, etc) and then they demonize a certain percentage of the population and pit people against each other – instead of understanding we are ALL citizens and respecting the power and uniqueness of the individual, not what group they happen to fall in to. More taxes is not the answer. More government is not the answer. Limiting federal governmental authority, upholding personal freedoms and liberty, honoring the constitution, and upholding our courts and judicial system is the only way for America to prosper. The day we allow the rampant growth of government to choke out the last vestiges of personal freedom and liberty will be the day that we have truly lost our way.
October 06, 2012 1:51pm
The economy is a circle. When you cut jobs, anywhere, you take money out of the circle. The circle thus becomes smaller. As the circle becomes smaller, it shrinks as a natural result of the first job cuts, with more following. The wealthy are not in the circle. They are on the side, skimming the cream. The circle of any one particular nation does not worrry them. That is the beauty of global economics. When you do bad in the U.S. you usually do well in another country. And, only the truly wealthy benefit from this arrangement.
October 06, 2012 11:51am
Robert Reich the Economist who advised President Bill Clinton to establish Policiesw that created one of only three Budget Surpluses.
Romney says we’re not doing well enough, and he’s right. But Robert Reich says that the prescriptions he’s offering – more tax cuts for the rich and for big companies – won’t do anything except enlarge the budget deficit.
Robert Reich says that the concentration of income and wealth at the top has robbed the vast middle class of the purchasing power it needs to generate a full recovery – something that was masked by borrowing against rising home values, but can no longer be denied.
To have a really Healthy Economy all of the Sectors that make up the Economy must be relatively balanced as to the portion of the Economy that they provide. We MUST have a Manufacturing Economy that is Strong and providing 40% of the total Economy.
We would be much better off as a Country if we did the following: [1.0] Repeal the Entire Income Tax Code, all of the Exceptions, Exemptions and Deductions. [2.0] Treat all Income exactly the same no matter how it is earned, where it is earned and from what it is earned. [3.0] Have Three Income Tax Rates, (A) 20% Personal Income Tax rate for those who earn less than one million dollars. (B) 35% for those who earn over one million dollar. (C) 15% for all Corporate Income Tax rate.
Reform Social Security by doing the following: [1.0] Remove all Caps on Social Security Taxable Incomes. [2.0] Make every form of Income be covered by the Social Secfurity Income Tax. [3.0] Make receiving Social Security Benefits be Income "MEANS TESTED". [4.0] Remove the cost of Medicare from Social Security Administration and put it in the General Budget, because the Republicans did not fund it when they created it.
October 06, 2012 11:23am
A Question for Prof. Reich:
Was the American prosperity of the 50’ and 60’s due strictly to being the world’s dominant manufacturing economy or did the high top tax rates play a part by skewing wealth towards the middle class?
October 06, 2012 11:14am
One comment that no one has yet made: Even assuming that Mitt Romney can achieve his preposterous lie that his tax plan would be revenue-neutral, it could not create a single new job under those circumstances. Revenue neutral means that for every dollar he cuts taxes by lowering the rates, he increases taxes by a dollar by closing loopholes and deductions. If you believe his assertions in the debate that this would not reduce taxes on the wealthy, it means that the "job creators" would have the same amount of disposable income to create jobs under his new plan as they do now; all that would change is the mathematical calculations used to get to the same bottom line. If that is the case, where is the stimulation to the economy? How does that create any new jobs?
October 06, 2012 10:17am
I know what would build the infrastructure, put people to work, pay down the National debt, and allow people to believe in their government again. Tax the rich like our Great Leaders of the past . From 1936 to 1941 we had 33 Tax Brackets ranging from 4% for income up to $64,000.(adjusted for inflation) all the way up to 79% for income over $80Million. That's a Hell of a lot more than the mere 6 Tax Brackets we have today that doesn't even reach into the incomes of the rich or super rich. The top marginal bracket tops out at 35% for incomes over $380,000. That number is a slap in the face of the Middle Class. Especially since these super rich have bought our politicians to change the Tax Code to allow for loop holes, that they can dodge paying their taxes at all. We need a New Party that works exclusively for the Middle Class, which would bring our country back in No Time at All. God Bless the Middle Class, because our politicians obviously don't.