Even with hands tied behind his back, there is evidence that President Obama’s “We Can’t Wait” executive initiatives and the impact of the payroll tax cut that has been in place throughout 2011 are helping put the nation back to work.
The employment report issued December 2 shows that private sector payrolls increased by 140,000 in November, and the unemployment rate fell to its lowest level since March 2009, when Obama got his stimulus package.
Though at $787 billion, much less than economists have said would work, the nonpartisan Congressional Budget Office attributed about 3 million jobs to that one and only stimulus. The unemployment rate, which hit 10%, would have been 2 or more points higher without it and some estimated it could have hit 15% without the measures.
“Today’s employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression, but the pace of improvement is still not fast enough given the large job losses from the recession that began in December 2007,” Alan Krueger, Chairman of the Council of Economic Advisers, said in a statement on the employment situation in November.
Private sector payrolls increased by 140,000 in November and overall payroll employment rose by 120,000. The unemployment rate fell 0.4 percentage point to 8.6 percent, the lowest unemployment rate since March 2009. About half of the drop in unemployment in the household survey was due to a decline in the labor force (-315,000) and about half to employment growth (+278,000).
“Despite adverse shocks that have created headwinds for economic growth, the economy has added private sector jobs for 21 straight months, for a total of 2.9 million jobs over that period. Nonetheless, we need faster growth to put more Americans back to work,” Krueger stated.
“While the U.S. economy is healing, the world economy continues to be in a fragile state and all economies are linked through trade and finance. In this environment, the President’s American Jobs Act is the right medicine to sustain and strengthen the recovery. In particular, with 13.3 million Americans still unemployed, and 43 percent of them unemployed for 6 months or longer, it would be a setback for the economy and American families if Congress were to allow extended unemployment benefits to expire at the end of the year. The President’s proposal to extend and expand the payroll tax cut for workers and small businesses also would provide a substantial boost to economic growth and job creation.”
Sectors with employment increases in November included retail trade (+50,000), professional and business services (+33,000), leisure and hospitality (+22,000), health care and social assistance (+19,000), and manufacturing (+2,000). The temporary help services industry, which is often a leading indicator of future job growth, increased for the fifth month in a row, by 22,300. Sectors with employment declines included government (-20,000) and construction (-12,000). State and local governments lost 16,000 jobs and have shed 430,000 jobs since February 2010.
“The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision. Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report,” Krueger stated.
A graph issued by the office shows the trajectory of job losses and increases between 2007 and today.
What is astonishing about this graph is that all through 2008, the rate of job losses was increasing month by month, until it peaked at more than 850,000 job losses in a single month. Nonetheless, the Bush Administration was mum on the steadily increasing rate of lost jobs, in denial about a recession that kicked in December 2007. The stock market actually rewarded every company’s announcement of thousands of layoffs here, thousands of layoffs there, as a mark of improved productivity. Productivity – more work done with less payroll expense – is equated with increased profits, not lost demand for products and services, not a signal of “killing the golden goose” of prosperity.
Extending the Payroll Tax CutVital to Continuing Jobs Growth
The continuous growth in jobs is a reflection of the stimulative policies, including the payroll tax cut of 2% that has been in place throughout 2011.
This week, President Obama has been continuing to push individual components of his American Jobs Act in order to stimulate jobs creation and demand.
The immediate need now is for Congress to extend the payroll tax cut and avoid taxes going up on approximately 160 million Americans at the beginning of next year.
If Congress doesn’t act, a typical family earning $50,000 a year will see their taxes go up by $1,000 next year.
Republicans in Congress have blocked the measure if it is paid for with a small surcharge on people with taxable income of more than $1 million a year. Instead, Republicans are insisting the payroll tax cut be paid for with cuts to entitlements or further cuts in the social safety net.
In the American Jobs Act, the President proposed an expanded payroll tax cut that would put even more money in the pockets of families and provide new incentives for small businesses to grow and hire, creating jobs and strengthening the economy now.
As a part of this effort to get Congress to act, the Treasury Department released a report that makes the economic case for extending and expanding the payroll tax cut, and highlights with state-by-state data just how many Americans in communities across the country will be hit if Congress fails to act.
The report showed that for New York State, New York10.1 million people were able to keep a total of $7.8 billion because of the payroll tax cut – money that stimulated the economy and helped keep New York State’s unemployment rate more than a full point below the national average.
New York State’s unemployment rate in October 2011, the last month for which data was available, was 7.9%, compared to 9.0% nationally.
For 2012, the White House is estimating that the impact of extending the payroll tax cut would enable 10.3 million New Yorkers to have $12.8 billion in discretionary spending.
For the nation as a whole, continuing the payroll tax cut would provide a tax cut for 161 million working Americans receiving a total of $178.8 billion in tax relief throughout 2012. (Link to the report here.)
Karen Rubin, Long Island Populist Examiner
© 2011 News & Photo Features Syndicate, a division of Workstyles, Inc. All rights reserved. For editorial feature and photo information, go to www.news-photos-features.com or email firstname.lastname@example.org.