Rosier-than-expected jobs report doesn’t improve outlook for long-term jobless
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JUDY WOODRUFF: Now a pair of reports from the jobs front about a divide in the U.S. economy.
The labor market seems to be getting stronger once again. And yet, for many on the lower end of the income ladder, the big gap in wages is sparking a budding movement.
We begin with economics correspondent Paul Solman on the unemployment rate’s drop to a five-year low, even as many jobless Americans face more difficult times ahead.
The story is part of Paul’s coverage on Making Sense of financial news.
PAUL SOLMAN: The latest snapshot of the nation’s jobs situation showing 203,000 positions added in November and a jobless rate of 7 percent was even rosier than anticipated.
We asked Northeastern University economist Barry Bluestone what he made of the numbers.
BARRY BLUESTONE, Northeastern University: On balance, this was a good report today, over 200,000 people back to work. We have got the unemployment rate down from 7.3 percent to 7 percent. That’s all good news.
Of course, many of those were federal employees coming back to work after furlough, but we had some good news about manufacturing employment up, construction employment up, pretty much across the board. So, in general, this is good news. Plus, over the last several months, we have been seeing more job growth, in the area of about 200,000 jobs a month.
PAUL SOLMAN: Indeed, job gains were broad-based, from manufacturing and construction to warehousing and transportation, to retail, as the holiday shopping season kicked off.
But amidst the good news, a curiously stubborn fact, says Bluestone.
BARRY BLUESTONE: We continue to see incredibly high levels of long-term unemployment. These are people who have been unemployed for 27 weeks or more; 4.1 million Americans have been unemployed that long. And that isn’t moving at all. It’s been over 4 million-plus for months. So these are people who are at a point where they’re just essentially out of the economy and, of course, hurting very badly.
PAUL SOLMAN: The long-term jobless are facing a key policy decision this month. Emergency unemployment insurance for them after 26 weeks, put in place during the great recession, will stop at the end of the month, immediately cutting off aid to over a million people, unless Congress extends the program.
The president has called for such an extension, which can provide several extra months of aid, but Republicans have not yet committed to it.
Bluestone, a liberal, thinks an extension would make both moral and economic sense.
BARRY BLUESTONE: Without that unemployment benefit dollar coming into those families, they can’t spend money. And if they can’t spend money, the economy continues to slowly move ahead, and that keeps our unemployment rate for everybody up at 7 percent or above.
So, pouring more money into the economy through extended unemployment benefits, particularly for families who are going to spend every last dollar, creating tremendous consumption, putting people back to work, is about the best policy we could do.
PAUL SOLMAN: James Sherk, a labor analyst at the conservative Heritage Foundation, disagrees. Not extending benefits, he argues, would nudge people to accept jobs they might have rejected, and that in itself would lower the overall jobless rate.
JAMES SHERK, Heritage Foundation: Workers, understandably, look for the job that’s very close to what they had before. People don’t want to have to move. They don’t want to have to look for a job in a new industry, and they sure don’t want to have to take a pay cut. When those benefits drop down, they become willing to broaden their search to jobs that they might be more likely to land, even if they’re jobs that are not as close to their ideal.
PAUL SOLMAN: For its part, the nonpartisan Congressional Budget Office estimates that extending emergency benefits would cost $25 billion, but would create 200,000 jobs next year.