The February monthly jobs report is out. The official news is the unemployment rate held at 9.7% from the last month, meaning 36,000 jobs were lost. President Obama has hailed this as “better than expected“. Den. Harry Reid said, “Today is a big day in America. Only 36,000 people lost their jobs today, which is really good.” Many claim this means the government stimulus is working. President Obama’s enthusiasm was only tempered, as he called the unemployment rate “more than we should tolerate” as he encouraged greater efforts in passing a job bill.
With all this hype I think it is about time to do a real economic conditions report. While the unemployment rate is good news and it really is better than expected, it is also misleading. Here are three additional measures of the economy we need to be looking at:
1) Jobs lost verses Jobs created. From “The Heritage Foundation,” statistically 50.8 million jobs were lost in the first six months of the 2001 recession under Bush comparatively 48.2 million jobs have been lost in six mouths of our recent crisis. The unemployment during 2001 averaged 4.7% and peaked at only 5.7. What reasons could be given for this lower unemployment rate in a time of similar job loss? Jobs were being created, in those same six month as 2001 47.6 million jobs were created; under Obama only 40.3 million jobs were created in the 2nd quarter stats. The difference in jobs creation in this example is 7.9 million.
2) The next measure I feel is important to seeing our economy clearly is the 15 week unemployment rate. This long term unemployment measure gives us the percent of the country who has been without a job for 15 weeks (closing in on 4 months) who are still looking. In other words these are the people who are not just moving job to job but really struggling to find employment in this economy. In December 2007 the percent of long term unemployed was 1.6%, in December 2009 was up to 5.8%. That is a statistically impressive jump of over 3 times. It is also significant to note that over this time we have seen all the stimulus bills, the election of President Obama and his agenda.
3) The third stat is maybe the most sobering to my mind. It simply is that the average government worker makes $11,091 more than his private sector counterpart. Now lets remind ourselves about what the private sector is, it is the non-governmental part of the economy that operates for profit. So this stat means, in simple terms, you are better paid right now to not produce wealth. The economy grows as the private sector grows and right now the most talented people are going to go to jobs that do not produce wealth and grow the economy. This statistic, unless it changes, is a very gloomy portent for the future.
In conclusion, while unemployment is down people who are out of work are finding it hard to find new jobs due to poor job creation, and there is more money in the public sector than the private. All these stats tend to point towards a still struggling private sector who is not paying well or creating new jobs. Until that sector of our economy is re-energized we can expect continued job woes.