It’s time for summer vacation, but Congress is leaving town having not passed legislation to address our key economic problem: jobs. Even with the headwinds from Europe and the intransigence of House leadership, the economy has added jobs for 29 straight months, and this month was stronger with the addition of 172,000 private-sector jobs. This is certainly encouraging, especially given all the challenges in the global economy.
Nearly one year ago President Barack Obama proposed a solution—the American Jobs Act—which would put teachers back in classrooms, cops back on the beat, and renew our nation’s bridges and roads. But House Republicans have continually thwarted this effort by refusing to consider the much-needed legislation. The result: Even as the private sector moves toward recovery, government continues to lay off workers.
Indeed, manufacturing continues to be a bright spot in the jobs data, adding 25,000 jobs in July for an average of 26,000 per month in 2012. Durable goods manufacturing is growing at a pace faster than either the 1990s or 2000s recovery. (see Figure 1) Hours of work have been trending upward for production workers in manufacturing and continue to be above any point during the 2000s recovery and back at levels from the 1990s recovery.
But public-sector workers are taking it on the chin. In July an additional 7,000 local educators lost their jobs on a seasonally adjusted basis, for a total of 314,000 teachers, principals, and other school personnel who have been laid off since November 2009. The number of total workers employed by local governments is now lower than any time since the mid-2000s, even though our population has grown since then. Gutting public services will not encourage growth in the years to come, especially since these cuts are concentrated among educators—and increasingly among women.
While men were hit harder in the Great Recession of 2007–2009—losing three out of four jobs lost from December 2007 through June 2009—and added jobs more quickly than women initially in the subsequent recovery, the pace has now evened out. In July employers added 86,000 women to their payrolls, although the unemployment rate for adult women (age 20 and older) inched from 7.4 percent to 7.5 percent. Employers added 77,000 men to their payrolls in July, and the unemployment rate for adult men inched down from 7.8 percent to 7.7 percent. Thus, while the early part of the recovery was disproportionately better for men, that’s no longer the case.
The temporary help industry added 14,000 workers in July and is now back to a level not seen since January 2008, just after the recession began in December 2007. The number of temporary workers is now only about 110,000 below the peaks of the economic recoveries of the 1990s and 2000s. While an economy of temporary workers is not the goal, this does indicate that employers are feeling some pressure to ramp up hiring.
That’s good news for wage gains. The annualized rate of quarterly increases in wages was 2 percent in July, slightly above the rate of inflation, as measured by the Consumer Price Index for all Urban Consumers, which was 1.7 percent.
Notably, though, it continues to be a tough time to be in the job market for teenagers—especially African Americans. Among all teens ages 16 to 19, the unemployment rate was 23.8 percent in July, while it was 36.6 percent among African American teens.
While we don’t want to make too much of a one-month change, there is potentially encouraging news about the long-term unemployed in July’s data. The median number of weeks unemployed fell from 19.8 to 16.7 in July—the shortest average period of long-term unemployment since August 2009. The share of the unemployed who have been out of work and searching for a job for at least six months fell from 41.9 percent to 40.7 percent—the lowest since December 2009.
The interpretation of these data must be tempered, however, by the fact that in July 150,000 people left the labor force potentially because they have given up on their job search. The labor force is now about where it had been in May, so this may be a one-month blip, but it will be important to watch. Even as the labor force declined, the number of people reporting having a job fell back to its May level, and the share of the U.S. population with a job fell from 58.6 percent to 58.4 percent.
Yet despite the ongoing challenges for the long-term unemployed, both the federal and some state governments have been phasing out benefits for the long-term unemployed. The Middle Class Tax Relief and Job Creation Act of 2012 extended benefits to the long-term unemployed through the end of 2012 but included incremental reductions in eligibility, which mean that hundreds of thousands of unemployed Americans have already or will soon max out their benefits. On top of this, in the past two years 12 states have enacted legislation that restricts eligibility to benefits, decreases the amount of benefits available, or does both.
Cutbacks to benefits for the long-term unemployed has real implications for workers and their families: Unemployment benefits pulled 3.2 million people out of poverty in 2010 and reductions in eligibility will mean more families will struggle to make ends meet. And yet Congress has still gone on vacation, even though House leadership has failed to pass the kind of legislation that would ensure the economy keeps moving in the right direction.
Heather Boushey is the Senior Economist at the Center for American Progress.