Outside editorial: Creating jobs

Posted: Friday, February 12, 2010

Last week the government reported that the national unemployment rate declined in January. Good news? Not good enough to dispel the pall of gloom that has accompanied economic reports for too long.

Republican House leader John Boehner was especially dire, attributing continuing high unemployment to President Barack Obama's "job-killing policies." The AFL-CIO insisted it proved the need for ambitious (read: expensive) government action.

Even the president was leery of sounding optimistic, saying that the change is "cause for hope, but not celebration, because far too many of our neighbors and friends and family are still out of work."

It's true that unemployment stands at 9.7 percent, and it's true that one government survey found the actual number of people with jobs fell by 20,000. But there's more silver lining than cloud in the latest economic data.

To start with, that unemployment rate is down nearly half a percentage point from the peak it hit in October. Whatever else is going on, it's pretty clear that the steep drop in total employment has stopped, some two years after it plunged off a cliff. You can't go north until you stop going south, and the job market appears to have done the latter, at least.

It also looks poised to start growing again. Gross domestic product rose in the third and fourth quarters of 2009, after shrinking in the previous four quarters - and in the most recent quarter, it accelerated to a gaudy 5.7 percent, the fastest pace in six years.

It's sometimes easy to forget that unemployment is a lagging indicator of the economy. It doesn't drop the instant that growth resumes, but growth does bring it down in due course - without fail. If companies sell more stuff, someone has to make more stuff, and sooner or later that means more someones will be needed.

Signs of improvement in the job market are modest but unmistakable. The Conference Board's Employment Trends Index has risen five months in a row. The number of "involuntary part-time workers" - those who couldn't find full-time jobs - fell from 9.2 million to 8.3 million in January.

The average work week increased, particularly in manufacturing, suggesting that employers see more demand for what they sell. But you can only increase the hours of existing employees so much before you need new hires.

Pay is also up, believe it or not. Average hourly earnings increased last month, and over the past year, they have risen by 44 cents an hour, or $17.60 a week for a full-time employee.

None of this is grounds for exuberance. For anyone who's out of work, the rays of sunshine make no difference if they land only on someone else. And even with steady GDP growth, it will take many months before hiring regains the robust pace Americans once took for granted.

But right now, the central fact is that things are getting better, slowly. And that's much preferable to the reality of not long ago, when things were getting worse fast.

Trending this week:


© 2018. All Rights Reserved.  | Contact Us