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Time For a New Plan: Frightening Jobless Numbers Show Flaws in GOP Austerity Agenda

While Obama pushes for a deal on the debt ceiling, jobs numbers make plain that the focus in Washington is in the wrong place: jobs, not deficits, are the crisis.
 
 
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Republicans say government cannot create jobs. It certainly seems capable, however, of eliminating them.

The jobs numbers for June are out and to call them “bad” would be an understatement. The jobless rate is up to 9.2 percent; if you include those who stopped looking for work (what the Labor Department calls “marginally attached” to the labor force) and the underemployed (those with part-time work who need full-time work), the rate is a staggering 16.2 percent, up from 15.8 percent last month.

To put it in perspective, the economy added only 18,000 jobs—and 14.1 million people are unemployed. Those numbers will barely keep up with population growth. Workers are currently more likely to  drop out of the labor force than find a job.

And the cause of much of the drop? Public sector layoffs, caused in part by ideological cuts in state and local budgets. Though the  New Republic's Jonathan Cohn argued on Twitter ”...loss of gov't jobs absolutely preventable. All it would take is more fed aid to states,” it should be noted that some of that aid was refused by Tea Party-backed governors like Rick Scott and John Kasich.

And those same states are passing through tax cuts for corporations while taking the money from pension funds, salaries and health insurance for their workers—the idea being that private companies will create jobs that will more than outweigh the jobs lost by public workers, which is simply not the case. Arguing that cutting government at the same time as the private sector is not hiring,  David Leonhardt at the New York Times wrote, "the state and local austerity of the last two years has cost the economy about one million jobs."

Nate Silver of FiveThirtyEight noted, “ Employment in 'local government education' down 180K from a year ago. Lots of teachers losing jobs. Among worst-affected sectors." It was not so long ago, during Obama's State of the Union speech, that he argued we were going to “win the future” through education. But it's hard to do that when you're laying off teachers—and not just firing the “bad teachers” that the school reform crowd likes to crow about, but eliminating teaching positions entirely, cramming more students into a classroom or closing schools outright.

Those public sector jobs cuts have been falling harder on women, who are overrepresented in government employment. Mike Konczal of the Roosevelt Institute bitterly joked, ”...Employment-population ratio for women is at lowest rate since 1988. Remember those End of Men stories?”

Matt Yglesias pointed out:

In total, we have about 500,000 fewer people working for the government since Obama’s inauguration even though the national population is larger than it used to be.

So much for big government causing the recession.

Heather Boushey, an economist with the Center for American Progress, tweeted “ Wow, hourly earnings fell in June. This rarely happens. This is both a jobless and no wage growth 'recovery.' Sheesh.” But that's a feature, not a bug, of high unemployment. Workers are squeezed into working longer hours or taking on more. Consider the teacher who suddenly has to teach 60 kids as her colleagues are laid off around her. Does she complain and find herself the next one with a pink slip? And forget about asking for a raise. People are accepting any job they can find, wages are being dragged down—from $791.20 a week on average for private sector workers down to $788.56—and meanwhile, those at the top are rewarding themselves.

Heidi Shierholz at the Economic Policy Institute wrote “This is a remarkable, across-the-board backslide. The president and Congressional leaders need to stop talking about deficit reduction and start talking about job creation.”