February, 01 2013, 12:29pm EDT
For Immediate Release
Contact:
Michelle Bazie,202-408-1080,bazie@cbpp.org
Statement by Chad Stone, Chief Economist, on the January Employment Report
Employers continued to add jobs in January (see chart), but the economy must grow faster to bring unemployment down more quickly. Instead, the recovery apparently has hit a soft patch, and both growth and job creation could slow further if policymakers let the automatic across-the-board budget cuts (known as "sequestration") take effect on March 1 or replace them with other immediate budget cuts that further weaken demand for goods and services.
WASHINGTON
Employers continued to add jobs in January (see chart), but the economy must grow faster to bring unemployment down more quickly. Instead, the recovery apparently has hit a soft patch, and both growth and job creation could slow further if policymakers let the automatic across-the-board budget cuts (known as "sequestration") take effect on March 1 or replace them with other immediate budget cuts that further weaken demand for goods and services.
Economic growth has been modest throughout the recovery, which began in mid-2009. Consequently, the growth to date has not fully erased the huge jobs deficit that the Great Recession created and unemployment remains unacceptably high. With enough demand, the economy could be producing a trillion dollars more output and several million more people could be working.
Earlier this week, the Commerce Department reported that growth in demand for goods and services (measured by final sales) slowed to a modest 1.1 percent annual rate. (Gross domestic product, or GDP, was essentially flat since the growth in final sales was financed out of inventories rather than the production of new goods and services, and, notably, a sharp decline in defense spending took 1.3 percentage points from demand.) The slowdown may have arisen from "weather-related disruptions and other transitory factors," as the Federal Reserve said in this week's monetary policy announcement. But the Fed's decision to continue purchasing government securities in hopes of pushing down long-term interest rates and its expectation that it will keep short-term rates as close to zero as practicable for a considerable time suggest that it expects high unemployment to persist for some time.
The economy's ability to resume stronger growth this year will suffer from the expiration of the payroll tax cut, and could suffer even more from spending cuts due to sequestration or other congressional action -- all of which would further hinder demand. Indeed, part of the sharp decline in defense spending in the fourth quarter may have come from an anticipation of such cuts.
Policymakers missed an opportunity in the recent "fiscal cliff" negotiations to resolve the sequestration issue by adopting policies that achieved equivalent budget savings that were more balanced between taxes and spending and that did not take effect until the economy was stronger. They missed an opportunity to boost the recovery and brighten jobless workers' job prospects when they failed to extend the payroll tax cut. And they missed an opportunity to achieve more deficit reduction that didn't threaten the recovery when they did not end President Bush's tax cuts for more very well-to-do Americans.
They have to do a better job of resolving sequestration this time if they want to enhance prospects of a stronger economic recovery, more job creation, and balanced deficit reduction.
About the January Jobs Report
Job growth moderated in January and the unemployment rate remained just below 8 percent, as it has for the past five months. (Payroll employment data have been revised back to January 2008 to reflect the annual benchmark adjustment for March 2012 and updated seasonal adjustment factors; unemployment and other household survey data for January 2013 reflect updated population estimates and are not directly comparable to earlier data, which have not been revised to incorporate those estimates.)
- Private and government payrolls combined rose by 157,000 jobs in January. Private employers added 166,000 jobs, while government employment fell by 9,000. Federal employment fell by 5,000 and local government employment fell by 6,000, while state government employment rose by 2,000.
- This is the 35th straight month of private-sector job creation, with payrolls growing by 6.1 million jobs (a pace of 175,000 jobs a month) since February 2010; total nonfarm employment (private plus government jobs) has grown by 5.5 million jobs over the same period, or 157,000 a month. Total government jobs fell by 606,000 over this period, dominated by a loss of 423,000 local government jobs. (These data reflect substantial upward revisions to November and December and incorporation of the new benchmark data for March 2012.)
- Despite 35 months of private-sector job growth, there were still 3.2 million fewer jobs on nonfarm payrolls and 2.7 million fewer jobs on private payrolls in January than when the recession began in December 2007. Despite job growth averaging 200,000 jobs a month over the past three months, the addition of just 157,000 jobs in January is well short of the 200,000 to 300,000 jobs a month that would mark a robust jobs recovery.
- The unemployment rate was 7.9 percent in January, and 12.3 million people were unemployed. In January, the unemployment rate was 7.0 percent for whites (2.6 percentage points higher than at the start of the recession), 13.8 percent for African Americans (4.8 percentage points higher than at the start of the recession), and 9.7 percent for Hispanics or Latinos (3.4 percentage points higher than at the start of the recession).
- Because they reflect the new population estimates, these unemployment data are not directly comparable to those from earlier years. Supplemental data in the January report show, however, that adjusting the December numbers would have had no effect on the unemployment rate and only a small effect on the number of unemployed. The official unemployment rate was been between 7.8 and 7.9 percent over the last four months of 2012 and the number of unemployed was been between 12.0 and 12.2 million.
- The recession and lack of job opportunities drove many people out of the labor force. The labor force participation rate (the share of people aged 16 and over who are working or actively looking for work) was 63.6 percent in January, about the same as its 63.7 percent average for 2012. Prior to this latest period, it had not been so low since the early 1980s.
- Using the unofficial adjusted numbers for December, the labor force rose by 7,000 in January, the number of people with a job fell by 110,000, and the number of unemployed rose by 117,000.
- The share of the population with a job, which plummeted in the recession from 62.7 percent in December 2007 to levels last seen in the mid-1980s and has remained below 60 percent since early 2009, was 58.6 percent in January, the same as its average in 2012. (Comparisons of these ratios are little affected by the new population estimates.)
- The Labor Department's most comprehensive alternative unemployment rate measure -- which includes people who want to work but are discouraged from looking (those marginally attached to the labor force) and people working part time because they can't find full-time jobs -- was 14.4 percent in January. That's down from its all-time high of 17.1 percent in late 2009 (in data that go back to 1994) but still 5.6 percentage points higher than at the start of the recession. By that measure, roughly 23 million people are unemployed or underemployed.
- Long-term unemployment remains a significant concern. Almost two-fifths (38.1 percent) of the 12.2 million people who are unemployed -- 4.7 million people -- have been looking for work for 27 weeks or longer. These long-term unemployed represent 3.0 percent of the labor force. Before this recession, the previous highs for these statistics over the past six decades were 26.0 percent and 2.6 percent, respectively, in June 1983.
The Center on Budget and Policy Priorities is one of the nation's premier policy organizations working at the federal and state levels on fiscal policy and public programs that affect low- and moderate-income families and individuals.
LATEST NEWS
Labour Ditches Tory Plan to Oppose ICC Request for Netanyahu Arrest Warrant
Now the United Kingdom's government must "stop selling Israel weapons," said one observer.
Jul 26, 2024
The United Kingdom's newly elected Labour government abandoned plans by its Tory predecessor to challenge the International Criminal Court's May application for arrest warrants against Israeli Prime Minister Benjamin Netanyahu and Defense Minister Yoav Gallant.
Under Conservative leadership, the U.K. joined the U.S., Germany, and other Israel allies in condemning the ICC prosecutor's application for arrest warrants against the top Israeli officials for alleged war crimes in Gaza, including "starvation of civilians as a method of warfare" and "extermination."
The ICC prosecutor also applied for arrest warrants against Hamas leaders over atrocities committed in Israel on October 7.
As The Financial Timesreported, U.K. Prime Minister Keir Starmer "had until Friday to decide whether to make legal arguments to support questions raised by the previous Conservative government over the ICC's jurisdiction to issue warrants against Netanyahu and his defense minister."
A spokesperson for the Labour government said it would "not be pursuing this in line with our long-standing position" that "it's a matter for the courts to decide."
"Well done to the millions of people across the country who have made it clear that they refuse to be complicit in war crimes."
Humanitarians applauded the government's decision. Rohan Talbot, director of advocacy and campaigns at Medical Aid for Palestinians, called Tory opposition to the proposed arrest warrants "a disgraceful attempt to delay justice."
"I hope the new government will now throw its full support behind the court and uphold any warrants issued," Talbot added.
Trita Parsi, executive vice president of the Quincy Institute for Responsible Statecraft, also welcomed the move and urged the government to "stop selling Israel weapons." Between October 7 and May 31, the U.K. government issued more than 100 arms export licenses to Israel, according to official figures reported by The Guardian.
Reutersreported earlier this week that in documents released Tuesday, "judges granted permission to 18 states including the U.S., Germany, and South Africa to file written submissions to the ICC about its proposed arrest warrants for Netanyahu, Gallant, and Hamas leaders.
"While there is no set deadline to rule on the prosecution request for arrest warrants," the news agency noted, "allowing dozens of legal arguments will slow the process by the three-judge panel deciding on the matter."
Former Labour Leader Jeremy Corbyn, who won reelection to his Islington North seat as an Independent following his expulsion from the Labour Party, called the Starmer government's decision to ditch the Tories' opposition to the ICC arrest warrant requests "an important first step in respecting the universal application of international law."
"Well done to the millions of people across the country who have made it clear that they refuse to be complicit in war crimes," Corbyn added. "We will continue to demand an end to the massacre in Gaza, an end to all arms sales to Israel, and an end to the occupation of Palestine."
Keep ReadingShow Less
US Healthcare Workers Back From Gaza Tell Harris and Biden: 'End This Madness'
"Every day that we continue supplying weapons and munitions to Israel is another day that women are shredded by our bombs and children are murdered with our bullets."
Jul 26, 2024
As President Joe Biden and Vice President Kamala Harris met with Israeli Prime Minister Benjamin Netanyahu at the White House on Thursday, dozens of American healthcare workers who recently volunteered in the Gaza Strip urged the U.S. leaders to do everything in their power to end Israel's assault on the enclave, citing the horrors they witnessed firsthand.
In an open letter addressed to Biden, Harris, and First Lady Jill Biden, 45 physicians, surgeons, and nurses wrote that "we wish you could see the nightmares that plague so many of us since we have returned: dreams of children maimed and mutilated by our weapons, and their inconsolable mothers begging us to save them."
"We wish you could hear the cries and screams our consciences will not let us forget," the letter reads. "We cannot believe that anyone would continue arming the country that is deliberately killing these children after seeing what we have seen."
The healthcare workers called on the Biden administration to "withhold military, economic, and diplomatic support from the state of Israel and to participate in an international arms embargo of both Israel and all Palestinian armed groups until a permanent cease-fire is established, and until good-faith negotiations between Israel and the Palestinians lead to a permanent resolution of the conflict."
"We are not politicians. We do not claim to have all the answers," they continued. "We are simply physicians and nurses who cannot remain silent about what we saw in Gaza. Every day that we continue supplying weapons and munitions to Israel is another day that women are shredded by our bombs and children are murdered with our bullets. President Biden and Vice President Harris, we urge you: End this madness now!"
This is an open letter addressed to @POTUS, @VP , and @FLOTUS signed by 45 American physicians and nurses, about what we saw while working in Gaza. Please feel free to distribute. A PDF can be downloaded from the link and/or QR code on page 1. pic.twitter.com/LHVvmeAFad
— Feroze Sidhwa (@FerozeSidhwa) July 25, 2024
The letter was released as Netanyahu, fresh off his widely condemned address to the U.S. Congress, met separately on Thursday with Biden and Harris, the presumptive Democratic presidential nominee.
In remarks following her meeting with Netanyahu, Harris said that "what has happened in Gaza over the past nine months is devastating," pointing to "the images of dead children and desperate, hungry people fleeing for safety, sometimes displaced for the second, third, or fourth time."
"We cannot look away in the face of these tragedies," the vice president added. "We cannot allow ourselves to become numb to the suffering. And I will not be silent."
Harris said she told Netanyahu directly to "get this deal done"—referring to a cease-fire agreement with Hamas—but, as expected, she did not break with the administration on supplying arms to the Israeli military.
While there has been no obvious policy change from the administration now that Harris has taken over for Biden at the top of the Democratic Party's presidential ticket, Trita Parsi of the Quincy Institute for Responsible Statecraft argued that the vice president "clearly broke with Biden on Israel in terms of rhetoric and tone."
Parsi also contended that there was "a substance shift."
"Biden has disingenuously claimed that Hamas blocked a cease-fire deal," Parsi wrote on social media. "By saying that she urged Netanyahu 'to clinch the deal,' Kamala pointed to the real obstacle."
BREAKING: VP Harris speaks after meeting with Israeli PM Netanyahu
Harris calling for an immediate cease-fire deal to free the hostages.
The VP saying she “will not be silent" about the suffering in Gaza, the "devastating" loss of life and the "dire" humanitarian crisis. pic.twitter.com/Fe5QPoOuFh
— MSNBC (@MSNBC) July 25, 2024
In their letter to Harris and Biden, the healthcare workers wrote that Israel "has directly targeted and deliberately devastated Gaza's entire healthcare system" and "targeted our colleagues in Gaza for death, disappearance, and torture." According to figures from the United Nations Human Rights Office, Israeli forces have killed one in every 40 healthcare workers in the Palestinian territory since October as diseases spread and the number of Gazans killed or wounded continues to grow by the hour.
The healthcare workers expressed the view that—based on available evidence and their experiences—"the death toll from this conflictis many times higher than what is reported by the Gaza Ministry of Health," which currently stands at over 39,100.
"We also believe this is probative evidence of widespread violations of American laws governing the use of American weapons abroad, and of international humanitarian law," they continued. "We cannot forget the scenes of unbearable cruelty directed at women and children that we witnessed ourselves."
Keep ReadingShow Less
'Tragic Outcome' for Gig Workers as California Supreme Court Hands Win to Uber, DoorDash
"Today's ruling only strengthens our demand for the right to join together in a union so that we can begin improving the gig economy for workers and our customers," the case plaintiff said.
Jul 25, 2024
Labor advocates on Thursday decried a ruling by the California Supreme Court upholding a lower court's affirmation of a state ballot measure allowing app-based ride and delivery companies to classify their drivers as independent contractors, limiting their worker rights.
The court's seven justices ruled unanimously in Castellanos v. State of California that Proposition 22, which was approved by 58% of California voters in 2020, complies with the state constitution. Prop 22—which was overturned in 2021 by an Alameda County Superior Court judge in 2021—was upheld in March 2023 by the state's 1st District Court of Appeals.
The business models of app-based companies including DoorDash, Instacart, Lyft, and Uber rely upon minimizing frontline worker compensation by categorizing drivers as independent contractors instead of employees. Independent contractors are not entitled to unemployment insurance, health insurance, or compensation for business expenses.
There are approximately 1.4 million app-based gig workers in California, according to industry estimates.
While DoorDash hailed Thursday's ruling as "not only a victory for Dashers, but also for democracy itself," gig worker advocates condemned the decision.
"Over the last three years, gig workers across California have experienced firsthand that Prop 22 is nothing more than a bait-and-switch meant to enrich global corporations at the expense of the Black, brown, and immigrant workers who power their earnings," plaintiff Hector Castellanos, who drives for Uber and Lyft, said in a statement.
"Prop 22 has allowed gig companies like Uber, Lyft, and DoorDash to deprive us of a living wage, access to workers compensation, paid sick leave, and meaningful healthcare coverage," Castellanos added. "Today's ruling only strengthens our demand for the right to join together in a union so that we can begin improving the gig economy for workers and our customers."
Lorena Gonzalez, president of the California Federation of Labor Unions, AFL-CIO, said that "we are deeply disappointed that the state Supreme Court has allowed tech corporations to buy their way out of basic labor laws despite Proposition 22's inconsistencies with our state constitution."
"These companies have upended our social contract, forcing workers and the public to take on the inherent risk created by this work, while they profit," she continued. "A.B. 5 granted virtually all California workers the right to be paid for all hours worked, health and safety standards, unemployment insurance, workers compensation, and the right to organize."
"Rideshare and delivery drivers deserve those rights as well," Gonzalez stressed.
The Gig Workers Rising campaign said on social media that "Uber and other app corporations spent $220 million to buy this law, and they did it by tricking Californians."
Prop 22's passage in November 2020 with nearly 59% of the vote was the culmination of what was by far the most expensive ballot measure in California history. App-based companies and their backers outspent labor and progressive groups by more than 10 to 1, with proponents pouring a staggering $204.5 million into the "yes" campaign's coffers against just $19 million for the "no" side.
"Voters were told the initiative would provide us with 'historic new benefits' and guaranteed earnings," said Gig Workers Rising. "But since it went into effect, drivers have seen our pay go down, learned the benefits are a sham, and have to accept unsafe rides because of the constant threat of being 'deactivated,' kicked off the app with little explanation or warning."
"If Uber really cared about good benefits and fair wages, it could make that happen tomorrow," the campaign added. "Instead, it has shown it would rather slash pay, bamboozle voters, and put drivers' lives and livelihoods in danger—all while promising $7 billion in stock buybacks to banks and billionaires."
Veena Dubal, a law professor at the University of California, Irvine who focuses on labor and inequality, toldCalMatters that Thursday's ruling was "a really tragic outcome," but "it's not the end of the road."
Dubal's sentiment was echoed by some California state legislators, who said the ruling presents an opportunity to act.
"While this decision is frustrating, it must also be motivating," said state Senate Labor Committee Chair Lola Smallwood-Cuevas (D-28). "I'm more determined than ever to ensure that all workers—including our diverse and Black, Indigenous, and people of color-led gig workforce—have the basic protections of workers compensation, paid sick leave, family leave, disability insurance, and the right to form a union."
Prop 22 has served as a template for lawmakers in other states seeking to deny or limit basic worker rights, benefits, and protections.
In Massachusetts, app-based companies have been fighting for years to get a measure to classify drivers as contractors on the state ballot. In 2022, Lyft made the largest political donation in state history—$14.4 million—to a coalition funding one such proposal.
Last month, Uber and Lyft reached an agreement with the office of Massachusetts Attorney General Andrea Campbell, a Democrat, to pay $175 million to settle a lawsuit filed in 2020. As part of the deal, the companies also agreed to increase driver pay and provide paid sick leave, accident insurance, and some health benefits. The agreement does not address how app-based gig workers should be classified.
Keep ReadingShow Less
Most Popular