Friday, June 4, 2010

Progressives Take Note: Job Creation

The monthly employment numbers came out today. An estimated 431,000 jobs were created in May. This is the highest monthly figure in 10 years. It was viewed as a disappointing number because most of the jobs were temporary positions participating in the census. Clearly, the European meltdown, the oil spill in the Gulf, and the threat of conflict between the Koreas did not instill confidence in the economy. One can interpret this result in relation to our economic prospects in a number of ways. One thing that is clear is that the growth in jobs will be slow with respect to regaining the number of jobs that are lacking.

People quote a number of 125,000 jobs per month as being required to keep up with population growth. That is equivalent to 1,500,000 jobs per year just to hold our own. This number is consistent with about a one percent growth rate. Over the eight years of the Bush administration we gained less than 4,000,000 jobs, meaning we fell behind by about 8,000,000 jobs while Bush was in office. The point I am trying to make is that the economy was not healthy before the current series of crises.

The Obama Administration has been criticized for not focusing more closely on immediate job production. A straightforward dumping of money into the current economy will only create, at best, a return to the same ineffective state we were in before. They have chosen to support job creation by devoting part of the stimulus funds towards developing new economic drivers like education, infrastructure, renewable energy, and green jobs. I think that is the correct strategy and we have to stick with it and support the politicians who are on board with this effort. If you get depressed, just ponder what would be happening with McCain and Palin in the White House.

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