Tags: Alan Blinder | National | Jobs | Emergency

Alan Blinder: We Have a National Jobs Emergency

Tuesday, 12 Jul 2011 09:17 AM

Economist Alan Blinder says that looking behind the latest disastrous jobs report reveals an even bleaker picture.

“If we were at 5 percent unemployment, two bad payroll reports in a row would be of some concern yet tolerable,” Blinder writes in The Wall Street Journal. “But when viewed against the background of 9 percent-plus unemployment, they are catastrophic.”

Immediate government spending cuts would only make things worse, Blinder says, but a new jobs tax cut for companies repatriating their profits could help.

"The operative word here is 'serious,'" Blinder says. "Every day brings new proposals to slash government spending ... (but) those are ways to kill jobs, not create them."

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(Getty Images photo)
"When is the last time you heard one of our national leaders propose a serious job-creating program?" he asks.

Blinder notes that fewer people are employed now than when the recession officially ended in June 2009 and the number of unemployed who have been jobless for more than six months is now at 44.4 percent.

Moreover, public-sector employment has been falling — and unless the debt ceiling is raised, implied federal spending cuts would be equal to about 10 percent to 11 percent of gross domestic product.

“If cutbacks of that magnitude were maintained for more than a very brief period, it is hard to see how we could avoid another serious recession,” Blinder says. And such a shock could send financial markets into panic mode.

ABC News reports that the U.S. Treasury Department says the U.S. will start defaulting on its loans if the current debt ceiling isn't raised by Aug. 2.

The June unemployment rate rose to 9.2 percent from 9.1 percent in May and 9.0 percent in April.

Private-sector hiring slipped to its slowest pace in over a year, while the government is shedding workers as stimulus programs wrap up.

The June jobs figures report also shows that more and more workers are dropping out of the job market, giving up looking for work that's just not there.

"June's employment report doesn't have a single redeeming feature," says Paul Ashworth, an economist at Capital Economics, according to the Associated Press.

"It’s awful from start to finish."

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Economist Alan Blinder says that looking behind the latest disastrous jobs report reveals an even bleaker picture. If we were at 5 percent unemployment, two bad payroll reports in a row would be of some concern yet tolerable, Blinder writes in The Wall Street Journal. ...
Alan Blinder,National,Jobs,Emergency
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2011-17-12
Tuesday, 12 Jul 2011 09:17 AM
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