Posted by: SWL | September 8, 2012

Biden Needs New Economic Road Map in Wake of August Jobs Report

In his speech to the Democratic National Convention Thursday night, VP Joe Biden said America “has turned the corner” in the economic recovery. I’m sure he meant that in a positive way. But the unemployment/jobs created numbers that came out Friday morning say we have stayed on the same straight road to mediocrity.

Unemployment went down, from 8.3% to 8.1%. But that is not good news, because the report said the rate was lower because 368,000 people quit looking for work in August. (If everyone who has given up hope of finding a job during the last 3.5 years were added to the unemployment calculation, the rate would be 11.2%!)

From Friday’s report, President Obama has focused solely on the 96,000 jobs created in August. CNN reported that at least 150,000 new jobs are needed each month just to keep up with population growth, so over the last six months we have lost ground. Mr. Obama touts the 4.1 million jobs created during his term, but fails to mention that in the first 13 months of his term, 4.15 million jobs were lost, putting us about even right now. Most significantly, average monthly job growth is down in 2012 to an average of 139,000 per month, from 153,000/month in 2011.

I have to wonder how much the President really cares about jobs. He has not met with his own hand-picked Jobs Council since January. And before that he ignored most of their suggestions.

Mr. Obama promised to create good paying jobs, but the National Employment Law Project estimates that 58% of the jobs created during his term are low paying positions, mainly in retail and food service sectors. NELP’s analysis also found that in better paying job sectors such as construction, manufacturing and finance (all sectors that received significant bail-out or Stimulus money) growth was virtually non-existent.

Even for better paying jobs, employers are finding ways to cut costs, often at the expense of employees. For many years my sister worked at a major resort on the Las Vegas strip. About 2 years ago they finished an expansion project. Then they laid off most permanent employees involved in those types of projects since additional expansion was not planned because of the poor economy. My sister ran out of unemployment benefits earlier this year. She was fortunate that recently a former coworker mentioned my sister to her employer who was looking to hire.

My sister is now in a similar position at similar salary, but her status is very different. Although the job has no end date, it is categorized as temporary. (Her friend has been in her “temporary” position for over a year.) Because of that designation, the employer (another major resort) does not provide any health benefits. My sister does not have unemployment tax deducted from her paycheck, which is a couple of extra dollars for her. But the employer does not pay their share into the unemployment system either and if/when my sister is laid off, she cannot collect any unemployment benefits.

The jobs picture remains bleak for the 22 million Americans out of work and tenuous for many with jobs. The net worth of American families has gone down an average of $4000. Consumer prices, for food and fuel especially, are rising. A record number of Americans are receiving food stamps. The World Economic Forum has lowered the US from fifth to seventh on their list of business competitiveness among 144 world nations. Joe Biden needs a new road map!