Adding Up the Jobs Data: Washington Is Making Things Worse!

The latest indignity: Tens of thousands of government jobs cut as inequality continues to grow.

By Kai Wright Oct 08, 2010

It’s bad enough that Washington has done so little to create jobs. Now, we learn that lawmakers’ refusal to act is actively worsening the crisis.

According to the Labor Department, we lost another 95,000 jobs in September. Private sector jobs actually went up, if only slightly. But that slow improvement was overwhelmed by the fact that the public sector is shedding tens of thousands of jobs as Congress refuses to act. Last month, struggling state and local governments alone cut 83,000 jobs–a shocking 58,000 of them in education. Welcome back to school kids, we’ve laid off all your educators.

As the Washington Post’s Ezra Klein points out, these losses were plainly unnecessary and a direct result of Congress’ misplaced obsession with controlling debt. One economist after another has pointed out that, in a jobs crisis like this one, the first priority is to stimulate employment–something government spending is uniquely capable of doing. Yes, reducing the deficit is an important longterm goal, but you’re not going to get anywhere with record-high joblessness. (Not to mention the real drivers of tax cuts, war spending and health care costs.) Klein writes:

The government is now impeding an economic recovery. But it’s not for the reasons you often hear. It’s not because of debt or because of taxes. Nor has it scared the private sector into timidity. … Consider this: If we only counted private-sector jobs, we’d have had positive jobs reports for the last nine months. As it is, public-sector losses have wiped out private-sector gains for the past four months. [Emphasis added.]

The tragedy of this bears repeating: Millions of people are struggling, but GOP obstruction and Democratic timidity have conspired to make the government a net drain on the job market. Remarkable. By refusing to help close state budget holes, let alone launch new national jobs programs, lawmakers have accelerated the problem. Indeed, before going on recess, Congress allowed the sole meaningful jobs program we had to expire.

The 2009 stimulus was important; it helped a few million working- and middle-class families avoid falling into poverty. But the ranks of those living below the poverty line have grown to a record 44 million, and counting. Last week we learned that the gap between the rich and everyone else had also reached record levels. The top fifth of the economy took in half of all the income generated in 2009.

Here’s what all of these numbers add up to: The recession’s legacy will be an unprecedentedly imbalanced, winner-takes-all economy. The middle class has officially begun shrinking, as median income has fallen while poverty has skyrocketed and the richest people have consolidated their wealth. Not surprisingly, the trend is most striking when you break it down by race. Among African Americans, median income dropped by nearly 5 percent last year, putting black families more than $17,000 behind the overall median.

All of these economic indicators also tell a story millions of families already know, even if their elected officials don’t. The funny thing about being middle class is it’s more of a feeling than a data point. It’s feeling the economic security to start a new career, to put your kids in college without saddling them with debt, to have a baby and an ambitious job at the same time. Or, it’s knowing you’ve got enough cushion to weather a long stint of unemployment amid a historic downturn. That’s what being middle class is really all about: knowing you’ve got options.

Fewer and fewer people feel that comfort these days. The black middle class has long lived with America’s new insecurity; many only made it out of the 2001 recession by piling on bad credit that turned worse when mortgage brokers came peddling exotic refinances. But as with many things, black folks are just the most vulnerable, and thus the first to slide down the hill. Uncertainty is now the norm for all of the would-be middle class, and Washington has done next to nothing to alleviate that anxiety–indeed, today’s jobs report shows lawmakers are actively making things worse.

Which is why everybody hitting the campaign trail this fall is rightly feeling so insecure, too. Let’s hope they remember that feeling when they resume governing after November.