New Jobs Numbers Don’t Mean Much to Struggling Workers Following the U.S. Labor Department’s release of the December jobs report, which revealed 252,000 jobs added in December, American Principles in Action Director of Monetary Policy Steve Lonegan released the following memo: THE REAL MESSAGE FROM THE DECEMBER JOBS REPORT: “The headlines from the Bureau of Labor Statistics press release today make one think that the jobs market is improving. Nothing could be further from the truth. The details of the report clearly point out that the situation for the average worker is not improving. Despite the Federal Reserve’s policy of massive purchases of mortgage and Treasury bonds and despite record low interest rates, the Federal Reserve has failed to improve working conditions for the average worker. The only visible result from these low rates is that corporations have access to cheap long-term borrowing, which they have used primarily for stock buybacks and mergers. The rest is sitting idly on their balance sheets, not improving the jobs picture.” THE BOTTOM LINE: “Objectively, the Federal Reserve seems incapable of meeting the jobs goal. The recovery is now five and a half years old, and workers are still wondering when their recovery will come. It is time to face this reality and consider alternative monetary policies to the Federal Reserve’s failed discretionary course.” WHY WE’VE COME TO THIS CONCLUSION: “The Federal Reserve simply cannot create an economic environment where job creation keeps up with the growth of the labor force. The number of jobs may have increased by 252,000 last month, but December’s labor force participation rate (62.7) is the lowest of the year. More importantly, it is a full 3 percentage points below the percentage of the labor force working (65.7) when the recovery began five and a half years ago.” “The average worker’s wages are barely keeping up with inflation. Over the last year, wages have risen only 1.7 percent. The average consumer therefore does not find his/her paycheck going further each month. They are treading water.” “There are still 6.8 million involuntary part-time workers. These are people who want full-time jobs, but simply cannot find them.” “There are 2.3 million workers who are ‘marginally attached’ to the labor force. They want work, have looked for it, but cannot find it. Another three-quarter of a million workers are simply discouraged. They want work, but have given up hope. Their job applications go unanswered. Both groups are the casualties of the recession. Many of them may never work again. The Federal Reserve has done little to improve their lot.” “It is time for serious discussions about the Federal Reserve.” fixthedollar/2015/01/09/new-jobs-numbers-dont-mean-much-to-struggling-workers/
Posted on: Mon, 12 Jan 2015 23:00:57 +0000
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