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  • The November Jobs Report: Lack of Job Creation Making Jobs Difficult to Find


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    The Bureau of Labor and Statistics released their November employment report showing the nation’s unemployment rate dropped all the way to 10%. While it is encouraging to see that the economy is beginning to recover, there are still some worrying data in the report. Heritage fellows James Sherk and Rea Hederman explain:

    The unemployment rate fell from 10.2 to 10 percent in part because 98,000 workers left the labor force. Most of these workers were teenagers: 62,000 teens left the labor force. About 70,000 men age 20 and over left the labor force, but 35,000 women of the same age entered the labor force. These numbers reflect the difficulty that labor force entrants have had in finding new jobs. Since teenagers are far more likely to be unemployed, this helped reduce the unemployment rate. It is likely that the unemployment rate will climb once potential workers reenter the labor force.

    The sourest note in the jobs report was the 293,000 increase in the number of workers unemployed for more than six months. The average duration of unemployment also rose from 26.9 to 28.5 weeks. Unemployed workers continue to have great difficulty in finding new jobs.

    Hederman and Sherk go on to explain why the unemployment rate has remained so stubbornly high:

    Despite this relatively good news, the nature of job losses in this recession suggests that the labor market recovery will be slow. Media coverage of net job losses in the recession gives the impression that unemployment has risen primarily because layoffs have increased. That is partly true: Layoffs have increased over the past year and a half, and they are painful for the workers involved. But the main reason unemployment has risen is because job creation has fallen.

    Since the recession started, quarterly job losses have increased by 15 percent (1.1 million jobs) while job creation has fallen by 25 percent (1.9 million jobs). The number of workers laid off at companies going out of business rose by 7 percent (91,000 jobs) and the number of workers hired at newly formed businesses fell by 22 percent (313,000 jobs). Like the proverbial “dog that did not bark,” unemployment has risen primarily because of the private-sector jobs that are not being created. Research into past economic downturns suggests that lower job creation will continue to account for most of the net job losses throughout this recession.[3]

    Why has private-sector job creation fallen so sharply? Businesses are retrenching wherever they can, taking measures to survive the immediate downturn such as laying off workers and conserving cash. The policy agenda in Washington–the health care legislation, cap-and-trade legislation, higher taxes to pay for more spending–has also contributed to businesses’ unease about the future. Entrepreneurs are reluctant to invest when they fear that federal legislation could make their business projects unviable.

    Posted in Economics [slideshow_deploy]

    3 Responses to The November Jobs Report: Lack of Job Creation Making Jobs Difficult to Find

    1. Freedom of Speech, T says:

      More frequent flyer miles to the Great State of The Penn Family.

      How can our leaders expect small businesses and entreprenuers to take risks when future uncertainty is all they see? If the POTUS did not understand this economic concept, then who the heck are his economic advisors? THEY understand but do not want to accept that Capitalism and that nasty word – PROFIT – is what drives this country.

      The much ballyhooed 787 Bil stimulus package was, we were told, necessary immediately, we were told, to create jobs. If so, what in the heck are we having a glorified job fair for? More importantly, why was the US Chamber of Commerce not invited? Since small businesses create jobs, why were they not the majority of the invitees?

      Why were union reps EVEN there?

      This is pure politics so don’t be fooled. I’m sure he does want unemployment to improve – as long as it does not diminish his vast array of social wealth redistribution projects!

      The President does not NEED ideas. He only needs to act on the ones that have proven to work, especially in a recession. QUIT BORROWING, PRINTING, AND SPENDING MONEY!

      Immediately cut the capital gains tax to 5% for 3 years. Do not pass any legislation or sign anything regarding CAP n’ Trade. Do not let the Bush tax cuts expire. Scrap the health care garbage and start over in a BI-PARTISIAN manner and REFORM the current system. Do not allow amnesty.

      All of this will give confidence so small businesses can plan, have confidence, and expand, thus creating jobs. And, yes. Businesses just may MAKE a profit!

      Of course, asking the current congress and president to stop spending is like asking a heroin addict to quit cold turkey. They would rather destroy themselves than admit their behavior does not work.

    2. Bobbie Jay says:

      Last night, I watched O'Reilly (rare for me). He had two women speaking about the jobs created and savvved. The Obama supporter spoke of Pennsylvania and their 7000? Construction jobs. This isn't a created job and it isn't a job saved. IT'S TAXED PAID AND TEMPORARY WITH NO FUTURE!!!!!!!!!!!!!!

    3. Pingback: The November Jobs Report: Lack of Job Creation Making Jobs Difficult to Find «

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