Don’t Fall for the Snow Job on Job Losses
Posted by Michael A. Kamperman on March 5, 2010
The V-shaped recovery crowd and their allies in the Whitehouse are desperate to see the job growth that they predicted would occur by the first quarter to materialize. Instead, the Labor Department reported the U.S. lost another 36,000 net jobs in February despite counting the hiring of 15,000 Census workers who will be let go this summer. Many analysts are touting that the snow storms actually masked tens of thousands of jobs and in fact we probably created jobs in February. The only problem is the Labor Department itself disputes this analysis. Here is the quote from today’s unemployment report “In order for severe weather conditions to reduce the estimate of payroll employment, employees have to be off for an entire pay period and not be paid for the time missed. About half of all workers in the payroll survey have a 2-week, semi-monthly, or monthly pay period. Workers who received pay for any part of the reference pay period, even one hour, are counted in the February pay- roll employment figures. While some persons may have been off payrolls during the survey reference period, some industries, such as those dealing with cleanup and repair activities, may have added workers.” Also, we must consider that while a company that closed a day for snow couldn’t hire anybody, they also couldn’t fire anybody. The bottom line is we really didn’t create any jobs in February. So don’t fall for Larry Summer’s snow job on snow holding back job creation in February. He needs to be held accountable for why the policies he is championing to restore jobs to the economy aren’t creating any net jobs. Almost everyone believes the minimalist $15 billion jobs bill will only create a minimal amount of jobs. The ADP unemployment report methodology wasn’t impacted by the snow and there numbers for a loss of 22,ooo private sector jobs in February closely corresponds with the official unemployment report from the Department of Labor.
In case you missed it Gallup interviewed over 20,000 people in late January and stated the unemployment and underemployment rate (those working part-time for economic reasons who need a full-time job) was 19.9%. The U-6 rate in February rose back to 16.8%. This is the real unemployment rate. Basically, according to Gallup one in five Americans aged 18 and older who want a full-time job are unable to find one. Additionally, Gallup reported that the unemployed/underemployed spend an average of $48 per day compared to the employed who spend $75 per day. This means the 30 million people without a full-time job are spending $10,000 per year less than those with full-time jobs. This represents a massive drag on consumer spending in the U.S.
It is time for the President to step forward and acknowledge his administration underestimated the severity of the economic downturn and that Washington needs to do much more to find jobs for the unemployed. Yet not only is the Whitehouse not acknowledging that our problems are worse than we initially thought, they are trapped in political spin and are trying to portray today’s loss of jobs as ”better than expected.” It is not better than what was expected only a few weeks ago before the snow. In fact the snow argument only appeared in the last week to mask the weakness in the unemployment report. We will not find jobs for all of the unemployed/underemployed if we continue to deny that the steps taken so far were not enough. President Obama, we need a one trillion dollar jobs bill to jump start the economy. Please quit talking about the need for deficit reduction and please start talking about the need for job creation. Hoover tried to limit deficit spending in 1931 and look where that got us, and him. No economist believes that a combination of both spending cuts and tax increases like those being forced on Greece, and on our States, will lead to job creation. My son goes to The University of Texas. UT has been told by the Texas Governor they have to cut 5% of their budget, which equates to cutting $100 million. America can do better than this. We will find the next FDR in either 2012, 2016, or in 2020. But we would be better off if we found him in the Whitehouse in 2010.
