Employment figures released today by the Department of Labor show that the economy is reeling and workers are suffering greatly. In November, businesses slashed 533,000 jobs, the largest monthly loss of jobs in 34 years. Unemployment rose to 6.7 percent, the highest level in 15 years. And 200,000 more jobs were lost in September and October than previously estimated. There are now fewer jobs in the economy than there were two years ago, even though the population has increased by 5 million people during that time.
Since December 2007, when the current recession began, the economy has lost nearly 2 million jobs. Most job losses have been quite recent, meaning that the severity of the recession is accelerating. Over 1.2 million jobs have been cut in the past three months, and the economy has now shed jobs for 11 consecutive months. The current recession has already lasted a year, and if it lasts just four months longer—which is likely given its increased severity—the current recession will become the longest recession since the Great Depression.
There were almost no positive signs in the Department of Labor’s figures. Job losses were widespread across almost every industry. Only education and health care and government employment grew, but by just 52,000 and 7,000 respectively. These increases are far less than enough to make up for losses elsewhere—a trend that has been occurring for some time.
Employment in professional and business sectors fell by 136,000 in November. Manufacturing dropped 85,000 jobs and has declined by 604,000 jobs since December of 2007. Construction lost 82,000 jobs and has fallen by 780,000 since its peak in 2006. Employment in financial activities fell by 32,000 for the month and 142,000 since December 2007. Leisure and hospitality employment declined by 76,000 in November and has fallen by 204,000 since peaking in April 2008. Retail employment fell by 91,000 for the month and 440,000 since last November. All told, job losses over the past three months are the worst since a three-month period in 1974.
Even the unemployment rate—which is at its highest level since 1993—suggests deeper problems. Despite more and more people being added to the unemployment rolls, nearly 40 percent of people have been unemployed for over 15 weeks. This is because people who are currently unemployed are not able to find work, and they are likely suffering as unemployment benefits run out. In addition, many people have simply stopped looking for work—meaning they are not counted as officially unemployed—and still more are only able to find part-time work. When these people are included, the rate of labor underutilization is 12.5 percent.
Indicators for the future are also bleak. Temporary employment—which is generally considered a predictor of larger changes in the labor market because many companies use temporary help services as a means to quickly adjust their operations to meet fluctuating demands for their products and services—continued to shed jobs. Temporary help services lost 78,000 jobs in November and nearly 400,000 jobs since November 2007.
On another front, the average workweek for production and nonsupervisory workers fell to 33.5 hours—the “lowest in the history of the series,” according to the DOL. That means that many businesses are reducing hours in an attempt not to lay off people, but even these measures may prove futile if the recession continues. It also means that workers fortunate enough to still have a job are earning less money because they are working fewer hours.
In addition, in just the past few days, a number of large companies have announced plans for significant layoffs, including AT&T, DuPont, Viacom, JP Morgan Chase, and Delta.
This month’s jobs report—one of the last of George W. Bush’s presidency—provides an important opportunity to put his record in historical perspective. The current economic downturn, which was just officially declared a recession last week, marks the second recession of Bush’s presidency. The first occurred from March through November 2001. While a few other presidents have also had two recessions on their watch, almost none have had a record on jobs as poor as Bush’s. Perhaps only Herbert Hoover, the president who helped steer the country into the depression, has a jobs record worse than Bush.
While President Bush’s labor market record is better than Hoover’s, Bush has presided over the worst annual job creation record of any president since Hoover. Most presidents in the 20th century have created jobs at an annual rate of between 2 percent and 4 percent. Hoover lost jobs at an annual rate of 4.4 percent, making him the only president to preside over an economy that actually lost jobs. While President Bush has not lost jobs, he created jobs at an annual rate of only 0.4 percent through the end of November. And the economy is now losing jobs at a rate of 1.4 percent per year.
Bush’s record on wages and income inequality is perhaps even worse than his record on jobs. Under Bush, wages and income for most Americans have been essentially flat and income inequality has risen to extreme levels not seen since Hoover’s presidency. Under President Hoover, income inequality, as measured by the ratio of the average income of the top 10 percent compared to the average income of the bottom 90 percent, rose from 7.1 percent in 1929 to 7.8 percent in 1932. Under President Bush the rise in inequality has been even greater, with the ratio rising from 6.8 percent in 2001 to 7.9 percent in 2006, the most recent year the data is available. These periods of high income inequality sharply contrast with the period of 1942 to 1987, when the ratio of top incomes to the incomes of most Americans never exceeded 5.
Clearly, for too many workers, the economy is not doing well. Despite the economy’s deep problems, Bush continues to obstruct needed stimulus measures. Thankfully, the Bush presidency is nearing its end. We now have an opportunity and an obligation to reverse course.
Smart policies can help minimize job losses and sow the seeds for a recovery. Stabilizing the financial and housing markets and passing a significant new stimulus with targeted aid to those most in need and measures geared to create jobs are key first steps. But there will also need to be a major focus on making the economy work again for workers—such as through the Employee Free Choice Act, which makes it easier for workers to join unions so they can bargain for improved wages and benefits. Getting out of the deep hole we are in will not be quick or easy, but it can be done.
Learn more from the Center for American Progress Action Fund’s American Worker Project.