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  • Morning Bell: America Needs More Job Creation

    After months upon months of unemployment stuck at or above 9 percent, the American people may finally see a sliver of relief in today’s jobs report from the Department of Labor. The report suggests the month of November saw 120,000 net new jobs created and the unemployment rate drop to 8.6 percent–driven in part by the 315,000 people who have given up looking for work and were no longer counted as unemployed. That news is cold comfort to the 13.3 million Americans who are still out of work and the 402,000 workers who filed for unemployment last week.

    The question is whether this improvement is real and enduring or a fluke. The economy is growing, but there’s little evidence of the real strength the report suggests, and there’s a lot in the report to suggest something’s amiss with the numbers–something likely to be corrected in the next report. For example, is it likely the labor market strengthened as much as the job number suggests at the same time so many people abandoned the workforce? And this is only one of the anomalies in the report.

    The White House would therefore be wise to trumpet today’s news with soft notes. The fact remains that under President Barack Obama’s watch, the U.S. unemployment rate remains high because America just isn’t creating enough new jobs. And if the only way the Obama Administration can get the unemployment rate to drop is by convincing people to quit looking for work, that’s bad news for the American economy. Or to quote liberal blogger Matt Yglesias, ”Decreasing unemployment by shrinking the labor force is not exactly winning the future.”

    It goes without saying that if the U.S. economy loses more jobs than it creates, the unemployment rate goes up. If job losses are low but few new jobs are created, then the unemployment rate treads water and remains high, with occasional dips and rises–and that’s what we’re seeing today.

    As Heritage’s James Sherk writes, in the last quarter of 2007, private employers created 7.6 million jobs and shed 7.4 million jobs. That was enough net new jobs to keep unemployment steady as new workers entered the labor force. During the recession, job losses increased, hitting 8.5 million jobs lost in the first quarter of 2009. The good news is that today, job losses are well below their pre-recession rates, hitting a record low in the first quarter of 2011. The bad news is that few new jobs are being created, leaving America in the economic doldrums. Sherk explains:

    Unemployment remains high because job creation has fallen. From the recession’s onset to the first quarter of 2009, private job creation fell by 24 percent to 5.8 million jobs. That was the lowest quarterly job creation on record. Since then, job creation has only slightly recovered. In the first quarter of 2011, employers created just 6.3 million new jobs–1.3 million fewer jobs than in the quarters before the recession began.

    Fewer existing businesses are expanding, while fewer entrepreneurs are starting new businesses. In the first quarter of 2011, the number of workers hired in new business establishments fell to just 660,000, 27 percent fewer than when the recession began. This is the lowest number of workers hired at new businesses that the [Bureau of Labor Statistics] has ever recorded–lower even than the worst points of the recession.

    To underscore just how important private-sector job creation is to getting America back on track, Sherk studied what would happen if hiring had returned to pre-recession levels when the recession ended in 2009. The result: By this year, net employment would have fully recovered. Unfortunately, that alternate reality is not our reality, and we’re living in an America where jobs are not being created at a fast enough rate. And the root of that problem is, in part, a White House that believes it knows best when it comes to job creation.

    It’s small businesses, entrepreneurs, and investors, though, who create new jobs, and the best that Washington can do is create an environment where their enterprises can flourish. The way to do that is not by growing government, raising taxes on job creators, and imposing unnecessary regulations that overburden businesses. Instead, the government should pursue lower taxation, fiscal responsibility, and entitlement reform to increase the return and reduce the risks of starting or expanding an enterprise.

    It’s always good news when new jobs are created and when the unemployment rate goes down, but when more than 13 million Americans remain out of work, there is no cause for celebration, especially when Washington is threatening policies that will keep the economy moving at a snail’s pace.

    Quick Hits:

    Posted in Economics [slideshow_deploy]

    30 Responses to Morning Bell: America Needs More Job Creation

    1. Victor Barney says:

      Hello! Economic 101 you can't create jobs during a promised "fundamental transformation of government!"
      Watch! Just saying…

    2. JabberJaw says:

      What is really sad is that the true total of American unemployed per month is not reported on. That would give us an accurate accounting of what's going on. But figures look good for Obama but the total scope is highly negative.

    3. Whicket Williams says:

      The numbers are being fudged Nobody has told the truth for decades about anything

    4. Lew Samson says:

      There are jobs available if Obama would only open up offshore oil drilling, permit the completion of the canadian pipe line, reduce the number of company restrictions, etc.. Get the Gov't out of the way!!

    5. Bernard P. Giroux says:

      It does not help when the state interferes with job creation for the most ridiculous of reasons. The MA Historic Commission [MHC] stopped a $50 million development project of Meditech's in Freetown, MA, for the reason that Meditech refused to excavate a 21 acre area of its 136 acre project site for Indian [Native American] artifacts. The MHC has no jurisdiction on that site, because it has no historic designation. The MHC far overreached its authority in its denial, acting by fiat. This site has been investigated three times in the past ten years and the MHC never said a word. The Stop 'n Shop Companies built a 1.5 million s.f. distribution warehouse on acreage just north of the Meditech site. No comment from the MHC. Meditech was planning to build on only 28 of the 136 acres and give the remainder to the Trustees of Reservations as conservation land. Did not matter to the MHC. This development was going to create 800 jobs; that is
      about a $35-40 million payroll in an area of MA where the economy is in a depression. This is a perfect example of the nonsense perpetrated by un-elected commissions who pander to special interests and dance to the tune of a Democratic governor and a really outrageous Secretary of State who runs the MHC. Why is this kind of administrative interference with economic progress and job creation allowed to stand? So, if the Democrats say they support job creation, they are lying. It is high time for a revolution at the ballot box.

      • Paul says:

        Thanks for one, very clear example of regulation. This story is repeated, over and over, coast to coast. I will have my children read your comment. I makes a large issue easy to understand, at the ground level. Thanks.

    6. Weldon says:

      The way to get people working at new jobs is to cut taxes on the employers who will then have the incentive to produce, thus making more jobs. That's what Ronald Reagan did! Result, more taxpayers.

    7. Daver says:

      Oh–but you don't understand!! If 120,000 new jobs can improve the unemployment rate by .4%, we only need 2.5 Million new jobs to have over 100% employment.

      Obama is the answer to everything–he has lowered the C level, we're just too stupid and blind to see it!!

    8. Bob says:

      Didn't the numbers come a lil early ?

    9. 1.5 million unskilled, uneducated non-English speaking LEGAL immigrants are brought in and dumped at the employment and welfare doors……..

      Not one politician has had the light go off in their head the quickest way to help the unemployed is to shut off the 1.5 million coming year after year after year…….Since the recession started in 2007 there have been 6 MILLION NEW LEGAL IMMIGRANTS IN TO COMPETE FOR JOBS…….

      Anyone see a disconnect?

    10. JWS says:

      It is all a play with numbers and I understand that the latest 402,000 that filed for unemployment a reported yesterday are not even counted in the latest numbers. Does it not sound funny that with 120,000 finding new jobs and 402,000 applying for unemployment, the rate of unemployed can go down and on top of that not even counting the 300,000 plus that do no longer show on the unemployment rolls? They also all of a sudden find substantial under reported job figures going back to September and October. How conveniant and does that not show us that they don't have a clue what they are doing?

    11. Jeanne Stotler says:

      POTUS was just on, crowing how things were getting better, unimployment down, Does he really think we, the people in these United States are dumb, Hirings are done for Christmas and then there are a lot who NO LONGER are getting benefits plus those who just gave up, He just doesn't get it and frankly he doesn't give a damm either, all he wants is 4 more years to finish ruining this country, already he's trying to imprison as many of os as he can just for not agreeing with him and his policies.

    12. Dr. Henry Sinopoli says:

      The next time Boehner and Obama are out golfing, at our expense, ask them about how they create jobs for their family, friends and cronies that become lobbyist. You might want to include Bob Dole, that great American, now lobbying for China. No problem getting politicians or their family, friends, girlfriends & cronies jobs.

    13. Dwana townsend says:

      So by not reporting the unemployed who no longer collect benefits or have stopped looking for work, the Administration can claim job growth? What is the real unemployment rate if we include those who have dropped off and stopped being counted? It's time that the American people be told the WHOLE truth!!

    14. art wissing says:

      the only job creation obama is concered with ,is his job. end of story

    15. duelles says:

      Ahhh! the numbers game. Unemployment is high, very high for the USA. It reminds me of how our overall debt kept going up during the period of the balanced budget brought to us by Willie Jefferson Clinton. Fuzzy math and non GAPP accounting. What B.S.
      No wonder POTUS is pushing to extend benefits – what a wingnut !!

    16. ChuckL says:

      Please in stories on the employment, or unemployment in this country give us a total of employed and those seeking work, by month or quarter of the year for the previous 5 years. With the ability to change the rate "at will" by changing the size of the workforce using a rate is at best disingenuous.

      Please give us numbers, not rates or percentages. Liars use rates and percentages without real numbers. Sop following their bad example and giving them a false appearance of truthfulness.

    17. ChuckL says:

      Please in stories on the employment, or unemployment in this country give us a total of employed and those seeking work, by month or quarter of the year for the previous 5 years. With the ability to change the rate "at will" by changing the size of the workforce using a rate is at best disingenuous.

    18. FlaJim says:

      As someone who's been seeking full time employment and settling for part time jobs for the past 4+ years and am off the official government charts, I'm disgusted by this regime's attitude to those who really want to work. To them, the only 'real' job is as some government or union flunky.

      It's understandable, too, that many employers are reluctant to hire. If I was still an employer, I'd be asking the question, "What are going to regulate or tax tomorrow?" We'll see a great hiring binge as soon as as the Marxist in the White Outhouse is ousted and the place is fumigated.

    19. Bobbie says:

      bring back the jobs he collapsed, focus on energy independence and STOP him from collapsing more.
      less obama and his costs of wasted time and energy, more job creation!

    20. John Obey says:

      Let' say there's a bill that would put millions of americans back to work. Would you go for that?
      Well there actually was one but the republcans voted against it because it would raise a millionares taxes by 0.02%. Abolish the department of education ? Civics class is already gone. Next it will be reading and math. Please wake up, and take the blinders off, the republicans sold us out for profit.

      • PADDY O says:

        HEY —OBEY
        DOES THIS SOUND FAMILIAR TO YOU? THE PRESIDENT SAYS HE WILL VETOE THE BILL!
        HARRY REID SAYS THE BILL WON"T SEE THE LIGHT OF DAY IN THE SENATE!
        THERE ARE TWENTY BILLS PASSED BY CONGRESS THAT OBAMA AND REID WON'T EVEN DISCUSS OR CONSIDER! ALL THIS IS SO OBAMA CAN USE HARRY TRUMANS STRATEGY " A DO NOTHING CONGRESS" WHY DOESN'T OBAMA USE HARRY TRUMANS PHILOSOPHY " THE BUCK STOPS HERE " ,INSTEAD OF HIS OWN PHILOSOPHY ' NONE OF THIS IS MY FAULT" ?? DO YOU DEMOCRATS EVER GET TIRED OF HAVING YOUR INTELLIGENCE INSULTED, OR IS THERE NOTHING TO INSULT?

    21. Blair Franconia, NH says:

      We'll get it when Barack Obama's out of a job.

    22. Donna says:

      One way to decrease unemployment is to send all the foreign workers back to their native countries. In the electronics industry, there is a prevalent use of foreign workers, especially from India. Send those people home and open those jobs up to Americans. During an economic crisis such as this, we must put Americans first!

    23. Joe Ramos says:

      @John Obey,

      Looks like your school cut math already. A .02% tax increase would raise the current tax rate from 35% to 35.02%

      If you meant 2% increase, you'd still be wrong, the Democrats want a lot more than a 2% increase.

    24. PADDY O says:

      WHY ARE THE THREE HUNDRED THOUSAND PEOPLE WHO ARE NO LONGER IN THE STATS SO WILLING TO ACCEPT OBAMA SAYING " THEY DON'T COUNT"?

    25. The Skip says:

      Lest we forget, the numbers are also misleading because companies are hiring seasonal employees for the holiday's. This is the same type of report the White House released when they were doing the census. Combine the seasonal jobs with those who have given up looking for a job and there are your wonderful numbers.
      I love how the Republicans were against this magical bill that the Dems proposed all because the rich would get taxed more. Every "jobs" bill that the left has produced came with a minimum $500 Billion price tag.

    26. The Skip says:

      Lest we forget, the numbers are also misleading because companies are hiring seasonal employees for the holiday's. This is the same type of report the White House released when they were doing the census. Combine the seasonal jobs with those who have given up looking for a job and there are your wonderful numbers.

    27. Chris says:

      This report is so Republican't. Trying to blame Pres. Obama when Congress sits back and Lobbies for programs that don't work to receive larger funding while cutting funding for the programs that do work. What kind of Congress do we have here. If it were not for President Obama, Osama Bin Ladin would still be out on the Loose, Our troops would not be seeing a return home soon, Unemployment would be at 14% and We would have more troops fighting Ghost. Republicans and Democrats need to get thier you know what together and help the Middle Class Americans get back to work NOW not yesterday. Both need to get to work.

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