After the Bureau of Economic Analysis report this month that the nation’s economic output declined 1 percent during the first quarter of this year, we welcome Friday’s report by the Bureau of Labor Statistics that the economy added 217,000 jobs in May.
Indeed, it marked 51 straight months of job growth, during which the private sector has created 9.4 million new jobs. It also meant that the U.S. economy has, at long last, recovered the jobs lost during the so-called Great Recession.
But let’s not declare a national day of celebration just yet. Because, while job growth is trending in the right direction — with nonfarm payroll employment exceeding 200,000 each of the past four months — it, frankly, has been disappointing since the recession officially ended five years ago this month.
Josh Bivens, director of research and policy at the liberal Economic Policy Institute, notes that the economy has created 113,000 net new jobs since the Great Recession began in December 2007.
“It needed to have created around 7 million,” he estimates, “to keep pace with potential growth in the labor force and return overall labor market health back to what prevailed immediately before” the recession.
That “jobs gap” of nearly 7 million is what should command the attention of policymakers in Washington. It’s “the real, nontrivial benchmark to monitor,” Mr. Bivens contends.
Indeed, EPI on Friday posted data on the large pool of what it calls “missing workers,” the nearly 6 million “potential workers who, because of weak job opportunities, are neither employed nor actively seeking a job.”
Counting those people, the 6.3 percent jobless rate the BLS reported for May would be more like 9.7 percent, according to EPI’s calculation.
What particularly troubles is that roughly half of missing workers are of prime working age, 25 to 54. They are a big part of the reason the nation’s labor participation rate was 62.8 percent in May, the lowest level since the late 1970s.
In a blog post Friday pegged to the May jobs report, Jason Furman, chairman of President Obama’s council of economic advisers, said his boss believes that “more can and should be done to strengthen economic growth and expand economic activity.”
And toward that end, said Mr. Furman, the president will “press ahead using his executive authority” to “take action to improve college affordability and support working families.”
Well, we’re all for improving college affordability and supporting working families, but we don’t see how they have anything to do with shrinking the economy’s jobs gap. The nation’s 6 million missing workers are to be forgiven for thinking the Obama administration has forsaken them.
— From the Orange County Register