As Unemployment Falls, ‘Biggest Risk’ To Job Growth Is ‘Self-Inflicted Damage From Bad Policy Decisions’

Despite steady job growth in November, policies like those being debated as part of the so-called “fiscal cliff” negotiations in Washington could damage further employment gains, progressive economists and analysts say.

The U.S. economy added 146,000 jobs last month, and the national unemployment rate fell to 7.7 percent, its lowest level since December 2008, the time of the financial crash, according to data released Friday by the federal government.

“Despite the devastation from Hurricane Sandy, the U.S. economy showed remarkable resilience adding 146,000 jobs in November. The economy continues heading in the right direction, though still not fast enough. The biggest risk to a stronger labor market remains the potential for self-inflicted damage from bad policy decisions,” says Adam Hersh, economist at the Center for American Progress, a left-leaning think tank. “In resolving the fiscal showdown and the debt ceiling, the president and Congress need to focus on accelerating job growth and building a strong economy from the middle out.”
Robert Borosage, co-director of the Campaign for America’s Future, a progressive Washington policy shop, agreed, noting that the November employment data “much better than expected but hardly a clear marker.”
“The economy still faces fierce headwinds – tightening austerity at the federal level, recession in Europe, slower growth in India and China. There is no sign of the robust levels of growth that would produce the jobs we need for the more than 20 million people in need of full-time work. Mass, long-term unemployment is continuing. That means stagnant or falling wages, spreading misery, jobless young people, inadequate demand and a recovery that will continue to falter, if it continues at all,” he says.
The current debate over the coming fiscal cliff gets job-creation all wrong, Borosage argues.

“You can’t fix the debt, as the lavishly funded CEO lobby suggests, by focusing on deficits. You have to fix the economy. Fixing the economy will fix the debt. And that requires bold steps now to put people to work by making investments that are vital to strengthening our economy,” he says. “With interest rates near record lows, we should be launching a major initiative to rebuild our failing and costly infrastructure. The president has called for a modest effort in this record — $50 billion for an infrastructure bank – as well as extending the more effective stimulus measures – extended unemployment insurance and the payroll tax cut. Republicans dismiss these out of hand. This gridlock on jobs is the least reported and most important aspect of the fiscal showdown. With no action on jobs, the debate is simply over how much austerity will be inflicted on a weak economy, and who will pay the costs upfront. If the economy slows, working families will continue to pay the price, no matter what is in the agreement.”

 

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