Two More Points on Today’s Jobs Report

August 5th, 2011 at 10:32 am

First, someone asked me this morning, “wouldn’t it have been better if the jobs report were terrible, so as to force policy makers to do something?”

I don’t think so.  Even after yesterday’s crash and the spate of weak reports—and this jobs report is really not that much better, btw–I seriously doubt a worse report would have moved these folks, and frankly, we really need the jobs.

The federal government right now is like a fire truck outside a burning building, with the firefighters leaning on the truck looking at the flames and saying, “what a shame…too bad we can’t help.”

And don’t try to tell me they can’t help because they don’t have any water in their tanks…they do, and they can borrow more at very low rates right now.  At this point, the best way to reduce the deficit is to get more people back at work, earning paychecks and paying taxes.

Second point: I noted in my earlier post that state and local employment continues to tank.  Though this month was made worse by the partial state government shutdown in Minnesota—hey, state legislators do the self-inflicted wound thing too!—the long-term trend is clear, and in stark contrast to the private sector jobs trends (state/local employment is on the right axis).  Private sector job growth is too slow, as I noted earlier, but at least its moving the right way.

(Graphic by CBPPs Hannah Shaw)

This X is a function of the fact that states and towns are still cutting and laying off teachers, cops, sanitation workers, etc., because they must, by law balance their budgets.  Two lessons here: 1) they need federal help, and 2) that line going down: this is your job market on a balanced budget amendment, another great Republican idea.

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5 comments in reply to "Two More Points on Today’s Jobs Report"

  1. Jim In Panama says:

    “The federal government right now is like a fire truck outside a burning building, with the firefighters leaning on the truck looking at the flames and saying, “what a shame…too bad we can’t help.”

    Actually, some of the firemen are denying the fire truck exists and the others are stripping it down for parts


  2. logan says:

    My friend, who I disagree with, saw this and asked if “cutting Govt. spending is spurring private sector growth and this chart is evidence of that”. Something’s not right with that argument. I have my theories to dismiss his theory(where is the evidence of crowd-out?), but I wonder what everyone else’s thoughts are about this….


    • Jared Bernstein says:

      Nope.
      a) actually, it goes the other way…the states and locals actually contract out a lot of work to the pvt sector, so as they shrink, it leads to slower, not faster job growth in the pvt sector.
      b) as public sector job losses have accelerated, pvt sector job gains have slowed…your friend’s theory predicts the opposite.


  3. James says:

    Re: “this is your job market on a balanced budget amendment, another great Republican idea.”

    Instead of the use of irony and sarcasm, maybe it is time for responsible persons with any kind of platform come out and say “another very dangerous Republican idea.” Eh?

    Republicans and low information people don’t really “get” that kind of humor. Seriously.


  4. Sanchit Kumar says:

    I’m seeing a few people express the ‘we need to see really bad numbers to force policy makers into drastic action’.

    The trouble with this view is that these bad numbers are measures of real things, as you point out. You can only get bad numbers in the jobs report if people lose jobs – that’s a terrible thing to wish for.

    There’s also little logic to this. Nobody would make the argument ‘we can only get good GDP growth if we let GDP tank, because then we can force in some good policy to push the growth rate back up’. If we’re at the point where we have to look for adverse events to elicit action from legislators, then our decision making process has become far too reactionary.

    We shouldn’t have to wait for adversity to demand action.


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