• Lisa Simpson
• Jul 12,2010
• In: Foreclosure

The Employment is Haunting the Democrats

It is the employment issue that is haunting the Democrats. Without jobs there is no money to spend, no money for mortgages and no money for paying taxes. But the employment report drew laudatory remarks from Christina Romer of the council of economic advisers of the president. She rattled off the increase by 83,000 of non-farm employment and the falling of unemployment figures to 9.5% in June – this being the 6th running month of increase of employment in the private sector. All this was interpreted to be “continued signs of healing”. And unemployment and foreclosure are directly related.

But not all are willing to buy this argument. Washington Post referred to it as “A brutal unemployment report this month”. It analyzed that the unemployment percentage dropped not because people were hired but because they ceased looking for jobs out of sheer despair. The figures are not always accurate. A drop of 652,000 might mean 752,000 current workers off and entry of 100,000 new ones.

The wages in reality dropped by 2 cents for all the workers and the labour numbers dropped nearly a million – it being lower than when the recession kicked off two a half years previously.

There was however a drop in the numbers working part time. The growth of jobs in the private sectors was better than the previous month. The overall picture is not as bad as a double-dip recession but of an economy that is badly wounded trying to stand up slowly.

Steve Benen reporting in Washington Monthly said, “A positive trend has been evident for the last year and a half – as stimulus efforts bolstered economic growth, the economy added jobs. This was especially evident since the new year, as the economy added jobs in each of the past five months, with each month better than the last … If there’s even the slightest bit of less-bad news in today’s BLS report, it’s that last point about private-sector hiring. While those 83,000 new jobs are hardly sufficient, the total exceeded expectations and represented an improvement over May”.

Benen makes it clear that given the circumstances the next step would be investing to create more jobs – something the policy makers are not thinking about doing. By cutting down on spending and stressing on deficits, as the Republicans are demanding might prove to be disastrous.

The stimulus programme is being exposed as the paper tiger and nothing more; the potholes are showing up as all that is done is postponing house sales and operating some beneficial programmes that just skim the surface.

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