Jobless Young Americans

The Republicans love to look down on "old Europe" and describe it as socialist and any number of other things.  Yet ironically, they want to follow the same path of austerity that has failed to revive dragging economic growth both in the United Kingdom and on the continent.  It's clearly a case of demeaning Europe while refusing to grasp that austerity and budget cuts in the face of struggling economies doesn't work.   Another favorite GOP tactic is to focus on European unemployment levels and preen about American superiority.  But the truth is that now, unemployed American youths are more plentiful than is the case with their European counterparts in Europe's largest economies.  An article in the New York Times looks at this reality.  Here are excerpts:

THE idle young European, stranded without work by the Continent’s dysfunction, is one of the global economy’s stock characters. Yet it might be time to add another, even more common protagonist: the idle young American. 

For all of Europe’s troubles — a left-right combination of sclerotic labor markets and austerity — the United States has quietly surpassed much of Europe in the percentage of young adults without jobs. It’s not just Europe, either. Over the last 12 years, the United States has gone from having the highest share of employed 25- to 34-year-olds among large, wealthy economies to having among the lowest. 

The grim shift — “a historic turnaround,” says Robert A. Moffitt, a Johns Hopkins University economist — stems from two under appreciated aspects of our long economic slump. First, it has exacted the harshest toll on the young — even harsher than on people in their 50s and 60s, who have also suffered. And while the American economy has come back more robustly than some of its global rivals in terms of overall production, the recovery has been strangely light on new jobs, even after Friday’s better-than-expected unemployment report. American companies are doing more with less.

Employers are particularly reluctant to add new workers — and have been for much of the last 12 years. Layoffs have been subdued, with the exception of the worst months of the financial crisis, but so has the creation of jobs, and no one depends on new jobs as much as younger workers do. For them, the Great Recession grinds on.   

The net worth of households headed by people 44 and younger has dropped more over the past decade than the net worth of middle-aged and elderly households, according to the Federal Reserve. According to the Labor Department, workers 25 to 34 years old are the only age group with lower average wages in early 2013 than in 2000. 

The problems start with a lack of jobs.   .   .   .   .    But there are obvious suspects, and each probably plays a role. 

The United States, for example, has lost its once-large lead in producing college graduates, and education remains the most successful jobs strategy in a globalized, technology-heavy economy. It is no accident that the most educated places in the country, like Boston, Minneapolis, Washington and Austin, Tex., have high employment rates while the least educated, including many in the South and inland California, have low ones.

Beyond education, the nation has also been less aggressive than some others in using counseling and retraining to help the jobless find work.

Other research notes that the United States has expanded parental leave and part-time work less than other countries — and, perhaps relatedly, employment rates among women here have slipped.

the most remarkable aspect of the jobs slump is that the Americans in their 20s and 30s who have been most affected by it remain decidedly upbeat. They are much more hopeful than older generations, polls show, that the country’s future will be better than its past.  Based on what younger adults have been through, that resilience is impressive. It’s probably necessary, too. The jobs slump will not end without a large dose of optimism. 

American hubris and the far rights view that countless Americans are simply a disposable commodity continue to sicken me.  If one cannot learn from the mistakes of others or see our common humanity, it does not bode well for the future.

The Loss Of Government Jobs Is Holding Back The Economy

The latest jobs report was welcomed news with unemployment down to 7.5% and 165,000 new jobs.  In addition, the lack luster figures for the two prior months were sharply adjusted upward.  But despite this good news, continued cuts in government employment is undermining the private sector gains.  Also creating further drag on the economy are sequester cuts which in this area are hitting families with 20% pay cuts even as their built in expenses are at their old levels.  We have personal friends suffering this experience right now.  The ultimate irony from it all is that GOP demagogues accuse Obama of being a big spender while it was their moron president George Bush who blew the nation's budget.  A piece in Think Progress looks what the loss of government jobs is doing to the over all economy.  Here are article highlights:

The jobs report out this morning was full of good news: unemployment fell to 7.5 percent as the economy added 165,000 jobs, while big upward revisions to the past two months’ jobs numbers were added. The private sector carried those figures, adding 176,000 jobs in April. Yet the number was dragged down by the loss of 11,000 public sector jobs.

This has been a steadily recurring trend with each monthly jobs report: even when the private sector adds a solid number of jobs, the overall figure is pulled down by losses in the public sector. 741,000 jobs have been lost in the government sector since the beginning of the recovery period in June 2009, with 89,000 gone since this time last year. 

Overall, the government has shed 718,000 net jobs since President Obama took office. While often accused of bloating the government, the trends show exactly the opposite: Obama has overseen a sharp decline in public sector payrolls as compared to his predecessor President George W. Bush, as can be seen in this chart [see chart above] from Calculated Risk.

While government workers have been maligned as lazy paper pushers, many of them perform vital work that benefits their communities. Take, for example, the loss in teaching jobs. “Local government education” jobs, or in other words teachers, dropped by 1,500 last month and have declined by 355,500 since the recovery began.  

The drop in public spending and, in turn, public employment has had big consequences for the recovery. If public sector rolls hadn’t been shrinking so steadily, the unemployment rate would likely be a full percentage point lower. The furloughs and potential job losses from sequestration cuts don’t even show up in these numbers. When the full pain of those cuts is felt later in the year, the trend may look even worse.

The Republicans keep touting austerity but somehow never seem to understand - perhaps they simply don't care - that real lives and real American families are being harmed. Meanwhile, of course, the rich are getting richer.

Romney’s Dangerous Economic Model

The results of GOP economic policy

Mitt Romney and Paul Ryan keep on whining that the economy has not improved as much as voters would have liked under Barack Obama.  Of course, they conveniently leave out the fact that the GOP controlled House of Representatives has continually blocked efforts by the Obama administration that would have made the economy better.  The GOP goal from day one has been to see Obama not re-elected and whatever economic mayhem that might be needed to do this - or the number of Americans harmed in the process - has never been an issue for the GOP.  They done all they can to destroy the economy and then complain about the outcome and say that it's Obama's fault rather than their own.  But there are additional reasons to fear the GOP and a Romney/Ryan administration: they want to do precisely what has failed to work in Europe.  It's another case of GOP arrogance - or should we say stupidity? - where they can never learn from the experience of others.  A column in the New York Times looks at the potential disaster of a Romney/Ryan administration.  Here are excerpts:

Mitt Romney’s best argument on the campaign trail has been simple: Under President Obama, the American economy has remained excruciatingly weak, far underperforming the White House’s own projections.

But Obama’s best response could be this: If you want to see how Romney’s economic policies would work out, take a look at Europe. And weep. 

In the last few years, Germany and Britain, in particular, have implemented precisely the policies that Romney favors, and they have been richly praised by Republicans here as a result. Yet these days those economies seem, to use a German technical term, kaput. 

Is Europe a fair comparison? Well, Republicans seem to think so, because they came up with it. In the last few years, they’ve repeatedly cited Republican-style austerity in places like Germany and Britain as a model for America. 

Let’s dial back the time machine and listen up: “Europe is already setting an example for the U.S.,” Representative Kenny Marchant, a Texas Republican, said in 2010. (You know things are bad when a Texas Republican is calling for Americans to study at the feet of those socialist Europeans.)

The same year, Karl Rove praised European austerity as a model for America and approvingly quoted the leader of the European Central Bank as saying: “The idea that austerity measures could trigger stagnation is incorrect.” 

O.K. Let’s see how that’s working out. New Jersey isn’t overseas, but since Sessions and many other Republicans have hailed it as a shining model of austerity, let’s start there. New Jersey ranked 47th in economic growth last year. When Gov. Chris Christie took office in 2010 and began to impose austerity measures, New Jersey ranked 35th in its unemployment rate; now it ranks 48th.

The International Monetary Fund this month downgraded its estimates for global economic growth, with only one major bright spot in the West. That would be the United States, expected to grow a bit more than 2 percent this year and next. 

In contrast, Europe’s economy is expected to shrink this year and have negligible growth next year. The I.M.F. projects that Germany will grow less than 1 percent this year and next, while Britain’s economy is contracting this year.

All this is exactly what economic textbooks predicted. Since Keynes, it’s been understood that, in a downturn, governments should go into deficit to stimulate demand; that’s how we got out of the Great Depression. And recent European data and I.M.F. analyses underscore that austerity in the middle of a downturn not only doesn’t help but leads to even higher ratios of debt to economic output. 

So, yes, Republicans have a legitimate point about the long-term need to curb deficits and entitlement growth. But, no, it isn’t reasonable for Republicans to advocate austerity in the middle of a downturn. On that, they’re empirically wrong.

The results are in. And, as Representative King suggested, the lessons “ought to hit all of us here in this country.”

Unhappy with the economy?  Vote GOP for change and watch the economy get worse, not better.  Oh, and remember, there will be less of a safety net for those who crash and burn financially thanks to GOP policies.