Last month the unemployment rate dipped below the eight percent mark for the first in 2012 – much to the delight of media pundits and President Obama’s Administration. We can all agree that the most important fix for our economy is more jobs and that meaningful declines in the unemployment rate are comforting proxies. However, the unemployment rate can be misleading when viewed in the abstract. A closer look at the employment report paints a very different picture and begs the questions – how bad do things need to get before economic development becomes a priority in this country?
The headline figures from last month’s September Employment Situation Report were a 0.3 percent drop in unemployment and a 7.8 percent unemployment rate; I would offer a different set of numbers that paint a dissimilar picture. The number of persons not in the labor force increased 3.1 percent year-over-year last month. The number of persons not in the labor force who want a job increased 8.4 percent year-over-year, and the participation rate has <em>sustained decade</em> lows in every month of this year, including September.
Before we jump the gun again in looking at October’s job market, we have to get to the bottom of these numbers. When you take a closer look at more inclusive estimates, it is clear that our economy still needs to generate more jobs…
Both President Obama and Republican Nominee Romney have plans to address the lingering jobs deficit. Romney’s plan calls for tax reform and tax cuts, in addition to reduced government spending and regulation. Romney’s plan also includes efforts to retain American workers and solidify their education and workplace skills. President Obama’s economic recovery plan includes eliminating tax breaks for companies that outsource jobs, maintaining new financial regulations, and tax increases for the top tax bracket. President Obama has also put forth a budget-balancing plan that includes investments in education, manufacturing and infrastructure.
I would urge both candidates to also revisit one of the unsung heroes of the U.S. economy – the housing market. Despite the minimal coverage the housing market has received in this election, the Bipartisan Policy Center estimates that a housing market simply operating at historical averages could double the U.S. economic growth rate and create nearly three million jobs.