The federal government’s report that the nation added 200,000 last month only puts fresh pressure on congressional Republicans to do more to help the struggling U.S. economy, and struggling jobless Americans in particular, according to many both in and out of the Obama administration.
The Labor Department released employment data Friday, which also found the national unemployment rate dropped to 8.5 percent, its lowest level in three years.
Despite the hope that the news represents, it also points out that more must be done, many say.
In all, employers created nearly 2 million private-sector jobs during 2011, according to Labor Secretary Hilda Solis.
“We’ve now created more than 3.2 million jobs over 22 consecutive months of private sector growth,” she says. “But our hard-won progress cannot be compromised. Congress wisely extended Unemployment Insurance benefits and the payroll tax cut for two months, but if we’re going to see our economy reach a self-sustaining path to durable and long-term economic growth, Congress will need to extend both programs for at least a full year.
“The American public has spoken loud and clear that it rejects the political gamesmanship that has created uncertainty for businesses around the country,” Solis adds. “Congress should do the right thing and extend middle class tax relief and Unemployment Insurance benefits through 2012 to keep our economy on the path to full recovery.”
Economists estimate that the nation will have to create more than 350,000 jobs per month -– for the next three years –- to get the unemployment rate down to 6 percent, according to Roger Hickey, co-director of the Campaign for America’s Future, a progressive Washington policy organization.
December’s figure of 200,000 jobs created means that the economy is barely growing at the rate needed to keep up with the growth of the labor force, Hickey says. The fact that the unemployment rate has declined to 8.5 percent has got to mean that many more people have become so discouraged that they stopped looking for work — and thus are not counted as part of the labor force, he adds.
“The US needs 4 to 5 percent growth to replace the 5.2 million jobs lost since 2007 and to keep up with new people who need jobs. But most forecasters predict that our economy will be lucky to grow at 2 or 3 percent this year,” Hickey says.
“Clearly, if we don’t want to stay stuck at high levels of unemployment –- and the growing inequality that comes with stagnant growth — our government needs to take stronger steps to create jobs,” he adds. “Instead, Republicans in the Congress are still threatening to remove stimulus from the economy by blocking extension of unemployment benefits and continuation of President Obama’s middle-class tax cuts. Today’s report will add public pressure on Republicans to renew those policies before the two-month temporary extension expires next month. But we have to do much more than continuing last year’s modest stimulus. Americans need to pressure their representatives to take advantage of record low interest rates to invest in public infrastructure, energy conservation and renewables, and education. These are investments our economy needs to make anyway –- and if we make them now, we can create enough jobs to escape today’s way-too-modest levels of growth and move our country to full employment.”
Curtailment of Unemployment Benefits
Chad Stone, chief economist at the Center for Budget and Policy Priorities, particularly worries about the future of unemployment benefits for the more than 13 million out-of-work Americans.
“The job market is nowhere near healthy enough yet to justify a sharp curtailment of federal emergency unemployment insurance (UI) benefits, which give critical support not only to the record numbers of long-term unemployed workers but to the economy as well,” Stone says. “Yet that’s what will happen if, in the coming legislation to renew UI and the payroll tax cut for the rest of this year, policymakers include harmful provisions of the payroll-tax bill that the House passed last month.”
Along with sharply curtailing the number of weeks of benefits, the House bill contained various “reforms,” some of which would undermine UI’s fundamental purpose since its establishment in the 1930s — to provide temporary financial assistance to workers who lose their jobs through no fault of their own while they search for a new job, Stone says. For example, the bill would deny UI benefits to all workers who lack a high school diploma or GED certificate and are not enrolled in classes to get one — even though employers paid UI taxes on these workers’ wages — and those taxes effectively came out of these workers’ wages.
It also would allow states to drug-test all UI applicants and condition eligibility on the results — a standard not used for other federal programs ranging from farm price supports to tax subsidies.
“Such provisions should have no place in legislation to extend UI and the payroll tax cut through the end of 2012,” Stone argues.
Scott Nance is the editor and publisher of the news site The Washington Current. He has covered Congress and the federal government for more than a decade.