There is No Longer Time for Jobs to Be a Positive Factor for Mr. Obama – And Nothing to Suggest Jobs Will be Increasing Soon
The Bureau of Labor Statistics, the people who keep track of employment and unemployment rates have announced that in June the economy created just 80,000 jobs. The unemployment rate remained constant at an unacceptable level of 8.2%. The data was the third straight year in which employment growth fizzled out in the late spring and summer months.
In the coming days there will be a lot of writing about the cause of the problems. Economists will give detailed explanations about technical issues involving economic theory. Politicians will talk about how the other side is to blame. But the simple explanation of why the lack of job creation is contained in this statistic.
In June, average hourly earnings for all employees on private nonfarm payrolls increased by 6 cents to $23.50. Over the year, average hourly earnings have increased by 2.0 percent
What does that mean? It means that after inflation the labor force has the same income today as it had a year ago. Without higher income there cannot be higher spending unless consumers resort to massive borrowings, which they are not doing and given their balance sheets should not be doing. Without higher spending there cannot be more production and without more production businesses will not be adding jobs.
The solution: As any economist other than those wedded to Conservative ideology will tell you, government spending must inject demand into the economy. And as any political commentator will tell you, that ain’t going to happen.
As for what will happen to jobs if Republicans get full control of the government and massively cut spending, well see above.