A thought about official reports of employment “increases”…

July 15, 2005


http://www.counterpunch.org/roberts07162005.html">Economic Treason
What Kind of Country Destroys the Job Market for Its Own Citizens?


By Paul Craig Roberts

The June payroll jobs report did not receive much attention due to the July 4 holiday, but the depressing 21st century job performance of the US economy continues unabated.

o Only 144,000 private sector jobs were created, each one of which was in domestic services.

o 56,000 jobs were created in professional and business services, about half of which are in administrative and waste services.

o 38,000 jobs were created in education and health services, almost all of which are in health care and social assistance.

o 19,000 jobs were created in leisure and hospitality, almost all of which are waitresses and bartenders.

o Membership associations and organizations created 10,000 jobs and repair and maintenance created 4,000 jobs.

o Financial activities created 16,000 jobs.

This most certainly is not the labor market profile of a first world country, much less a superpower.
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http://www.epi.org/content.cfm/webfeatures_snapshots_20060126">Sluggish private job growth indicates failure of tax cuts

Snapshot for January 26, 2006.

Sluggish private job growth indicates failure of tax cuts
Changes in tax law since 2001 reduced federal government revenue by $870 billion through September 2005. Supporters of these tax cuts have touted them as great contributors to growth in jobs and pay. But, in reality, private-sector job growth since 2001 has been disappointing, and a closer look at the new jobs created shows that federal spending—not tax cuts—are responsible for the jobs created in the past five years.

If tax cuts have created jobs at all since 2001, it will have happened in the private sector. Assuming that job growth in 2006 matches the Bush Administration's projections, the economy will have added about 2.0 million jobs to the private sector from FY2001 through FY2006. But how many of these two million jobs actually can be attributed to tax cuts and how many to increased government spending—particularly increased defense spending—in this period?

Based on Defense Department estimates of the number of private-sector jobs created by its own spending, we project that additional defense spending will account for a 1.495 million gain in private sector jobs between FY2001 and FY2006. Furthermore, increases in non-defense discretionary spending since 2001 will have added yet another 1.325 million jobs in the private sector, for a total of 2.82 million jobs created by increased government spending. Increased mandatory government spending—which is not even included in these estimates or the accompanying chart—would account for even more job creation. The mere fact that the projected job growth resulting from increased defense and other government spending exceeds the actual number of jobs projected to be added to the economy through 2006 clearly indicates that the tax cuts hardly seem plausible as the engine of the modest job growth in the economy since 2001.

This Snapshot was written by EPI research director Lee Price with research assistance from David Ratner.

August 9, 2005

http://www.pkarchive.org/economy/MSNBCHardball080905.html">Hardball: Paul Krugman debates Larry Kudlow on the state of the U.S. economy

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(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The economy is growing faster than any other major industrialized country. Job growth is strong. We added over 200,000 new jobs in July. This country added nearly four million new job since May of 2003. The unemployment rate is 5 percent, which is below the average of the 1970s, 1980s and 1990s. Americans have more money in their pockets. And that is good news.

(END VIDEO CLIP)
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GREGORY: Paul Krugman, let me start with you. Do you see the same economic portrait that the president does?

KRUGMAN: No. I mean, look, some job growth is better than none. It is -- you want to put these in perspective. That -- last month was a pretty good month for this administration. It would have ranked 69 out of 96 in terms of job growth during the Clinton years. So, it is not -- it is not really terrific news. And it`s a recovery that is not really delivering. There`s not a whole lot trickling down to wages. It is -- it is a disappointing recovery, although it`s a lot better. Thing are certainly better than they were in the summer of 2003, when it was really depressing.
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GREGORY: Larry mentions last week, a CBS News poll found 50 -- found 52 percent disapprove of the president`s handling of the economy.

KRUGMAN: Well, remember, the facts aren`t that good. Even Larry, in his attempt to spin it, is saying, well, it`s pretty good when you consider recession, stock market crash, the war. The fact is that, you know, by normal standards, this is a subpar recovery, by any standard. The Congressional Budget Office had a study out just yesterday talking about how much below the typical this recovery is in terms of job growth. It is not just not -- it is not great. It`s not -- don`t want to make it doomsday, but it is not great, very little shared by -- recent study by Congressional -- sorry -- Center on Budget and Policy Priorities said, you know, you can look at seven indicators of strength of a recovery. On six of them, this is just way subpar. It`s the worst of the postwar period. The only one that is really above par is corporate profits. Well, that doesn`t mean anything to most people. People are not feeling good about their job prospects or their wages.
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KRUGMAN: A lot of people are going to find themselves with mortgages they can`t handle. They are going to find themselves -- you know, personal bankruptcy will go up, except, of course, the laws have been tightened on that now, quite brutally. But the main thing, I`m just -- we -- you know, this -- this economic recovery, I`ve been complaining about it, but at least it is a recovery. And it is driven, it is driven mostly by housing.
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KRUGMAN: It`s the increase in housing construction. It is the increase in wealth, which leads people to spend more. I`ve done the numbers, say about that three-and-a-half to 4 percent of GDP is housing. The tax cuts are around 1 percent. This is much more a housing story than a tax-cut story.
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GREGORY: Final -- final question on this. If people are too leveraged, if they are putting too much of their money into real estate and the values don`t hold up, aren`t they in for a rude awakening?

KRUGMAN: Yes. I mean, that -- this is exactly what we are worried about. We are worried that there will be a rude awakening, that people will find themselves in trouble. And it`s not just the people who are, you know, heavily leverage and bought real estate. But, again, the economy -- we`ve got a real-estate-driven economy right now. It is all -- you know, if you ask, where`s the growth coming from, the answer is, the bubble did it. And if the bubble bursts, it actually -- as I said in "The Times," it sort of deflates slowly. But then we are in a lot of trouble, all of us.