Job Situation Worsens
By Alan Stewart Carl | Related entries in Congress, Economy, JobsJanuary saw the largest one-month job loss since late 1974. Businesses eliminated 598,000 jobs. In the last 12 months, the nation has lost 3.5 million jobs, the largest 12 month job loss since records started in 1939.
While the employment rate is still at a manageable 7.6%, the numbers of unemployed workers are rising and the figures do not account for how many Americans have taken pay cuts, benefit cuts or cuts in their weekly hours. Nor can the numbers assess the state of the large number of freelancers and contract workers who do not qualify for unemployment but who have lost sources of income.
While the stimulus package is designed to jolt the economy out of its malaise, I don’t think anything will be able to pull us out of this recession quickly. The problems are too large and too wide reaching. No matter how much money the government pumps in, it will take awhile for that money to work itself through the economy and reach all the people currently suffering.
Nevertheless, we must resist the urge to overreact. The massive borrowing necessary for the stimulus package (and TARP and the ongoing wars) will cause problems in the long run. How much of our future GDP will have to go towards paying off debt? How much of our future prosperity are we willing to risk in our efforts to jump start the economy now? Certainly something must be done. But that doesn’t mean everything will work.
I still hold out hope that Congress can whip the stimulus package into a lean, mean bill devoid of excess and appropriately targeted. Hey, in these times, you have to have hope in something, right?
This entry was posted on Friday, February 6th, 2009 and is filed under Congress, Economy, Jobs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
February 6th, 2009 at 8:45 am
The Titanic is sinking … but don’t overreact. Let’s make sure we get the right kind of lifeboats into the water. It doesn’t hurt to be too careful. Our rescue efforts should be targeted to make sure we eliminate wasteful expenditures of energy and resources.
February 6th, 2009 at 9:36 am
I agree that the stimulus package will not quickly pull us out of a recession, but it will certainly help prevent us from falling into a depression. You can make the argument that a depression now is going to be better than the depression caused when countries stop loaning us money but by limiting the stimulus that is the real choice you are making.
February 6th, 2009 at 9:53 am
If the bill is made as lean as Republicans such as McCain have proposed it will fail. Of course maybe that’s the point, to be able to claim that they passed stimulus “like the Democrats wanted” but that it didn’t work. The claim then will be that if only they’d stuck with tax cuts like the wise Republicans wanted it would have been OK.
February 6th, 2009 at 12:13 pm
Actually “businesses” — i.e., the private sector — cut 604,000 jobs in January. Government, federal, state and local, added a few, despite all the grim talk of fiscal emergencies from every state house and city hall.
When the “stimulus” package passes, federal, state and local employment will become the boom sector for a while, but will the rest of the economy be “stimulated?” We’ll see, I guess. Meanwhile, tell your sons and daughters to prepare to take civil service exams or become teachers.
February 6th, 2009 at 3:47 pm
I agree its important not to overreact. While this raw number is certainly disturbing, remember that there are about 50% more Americans in 2009 than there were in 1974. 600,000 out of 200 million is different from 600,000 out of 300 million.
It’s useful to look at unemployment rate data and view the graph all the way back as far as it goes, 1948. We are at this point already in one of the big scary peaks, but at 7.4 we’re not as bad off as we were in the 2 or 3 biggest peaks. Of course, we don’t know where we are headed. One thing that IS consoling in this graph is that if you look at each peak, unemployment declined on the back side just about as quickly as it rose on the front. That’s the only silver lining I can see.
February 6th, 2009 at 7:26 pm
John L. — an overreaction can be just as harmful as no reaction. Panic doesn’t save any more lives on a sinking ship than does complacency. I reject the notion that we’re jeapordizing everything by spending a few weeks debating the details. I do wish the Republicans were more interested in debating than obstruction, but I’m glad they’re obstinance has at least provided a few more days to discuss what is and isn’t good stimulus.
February 6th, 2009 at 9:04 pm
Wow, my comment was a tar pit of typos. Let’s try again:
John L. — an overreaction can be just as harmful as no reaction. Panic doesn’t save any more lives on a sinking ship than does complacency. I reject the notion that we’re jeopardizing everything by spending a few weeks debating the details. I do wish the Republicans were more interested in debating than obstruction, but I’m glad their obstinacy has at least provided a few more days to discuss what is and isn’t good stimulus.