Campaign 2010

Jun 11, 2004

Jonas Morris on the Employment Picture

Allow us to introduce Jonas Morris, who will be researching and giving us in-depth guest posts periodically.  He has more than thirty years as a reporter, analyst and writer, and has worked in many Democratic campaigns, including the presidential campaign of Lyndon Johnson.  This first installment fleshes out the reality of the employment picture, and although it does not include this last month’s numbers, it gives a much better feel for what is actually happening.  Enjoy.

No Rosie Scenario

Job growth isn’t as robust as the Bush Administration wants the public to believe. In fact, overall growth is essentially static and new jobs are being created primarily in the low-paying end of the service sector. The unemployment rate has been 5.6 - 5.7 percent since last December.

In April, even though non-farm payroll employment increased by 288,000, the unemployment rate was essentially unchanged at 5.6 percent and the number of unemployed persons, 8.2 million, was also essentially unchanged. The April increase followed a gain of 337,000 in March.

This is one of the first times that job growth has come close to the Bush administration’s July 2003 prediction of 306,000 new jobs per month– the prediction has failed 8 out of the past 9 months.

Further, unemployment rates in April and March for the major worker groups, namely adult men (5.0 percent), adult women (5.0 percent), teenagers (16.9 percent), whites (4.9 percent), blacks (9.7 percent), Hispanics or Latinos (7.2 percent), and Asians (4.0 percent) - were little changed over the previous month. The number of persons marginally attached to the labor force - those available for work but not looking for it - remained at 1.5 million, about the same as a year earlier, which shows that discouraged unemployed workers are not yet actively seeking jobs

The increase in jobs was primarily in the service sector, which added 230,000 new jobs, while the manufacturing sector continued to struggle with no net new jobs overall in the month.

Since January, manufacturing employment has edged up by 37,000.  Employment in this industry had declined each month from August 2000 through January 2004. In April, employment rose in construction and the manufacture of durable goods, which added 20,000 jobs, primarily fabricated metal products and machinery. Since March 2003, the construction industry has added 213,000 jobs, bringing construction employment slightly above its most recent peak in March 2001.
Job growth in April in other industries includes a 30,000 increase in health care and social assistance, with an increase of 252,000 jobs in the last year. In comparison, the industry added 381,000 jobs from April 2002 to April 2003.  Much of this increase occurred in hospitals and in ambulatory health care services.
The food services sector added 34,000 jobs in April.  Since December, growth in this area has averaged 28,000 per month, about twice the average monthly gain of 2003.

While these numbers are encouraging, employment is still more than 2 million jobs below the peak in March 2001, and even more behind the levels needed to simply keep up with population growth. Employment is 6.6 million short of where the economy would have been if employment had grown at the rate starting from the end of the recession in November of 2001. Measuring from the start of the recession in March of 2001, the economy has lost 10.2 million jobs.

Finally, The loss of manufacturing jobs in the US isn’t the result of consumers wanting more foreign goods or the result of improved productivity in the manufacturing sector, as claimed by some. To the contrary, trade imbalances in manufacturing have accounted for only 34 percent of the decline in that sector since 2000. This translates into about 1.78 million jobs since 1998 and 935,000 jobs since 2000 that have been lost due to rising manufactured imports.

Sources: DOL May unemployment survey
Federal Budget» Economy and Jobs Watch, 04/05/2004
EPI Briefing Paper #149, By Josh Bivens, April 8, 2004

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