In the New Economy, an example of good news is when monthly job losses dip below 100,000. Although the wizards in the Obama administration like to tout the fact that they’ve “saved” hundreds of thousands of jobs, let’s face it, a “saved” job is merely fodder for a future lay-off.
In December, job losses totaled a mere 85,000. Apparently, Rahm Immanuel popped a bottle of champagne when he heard the news, and said to his White House minions, “It doesn’t get much better than this, does it?”
Well, in fact, it does. November data has been revised to show an actual net gain of 4,000 jobs. How dare anyone call the recovery “jobless”?
But wait, there’s more. President Obama has announced a proposed $2.3 billion in tax credits to promote renewable energy, which should result in the creation of 17,000 jobs. In other words, the Feds are trimming $2.3 billion from their revenue stream to replace fewer jobs than were lost during a single week last month. How much revenue will they be willing to sacrifice, or spend outright, to replace the total number of jobs lost since the beginning of the recession?
That total number of jobs lost, measuring from the inflection point at the outset of the recession, lies somewhere between 7 million and 15 million, depending on whose metrics you believe. Using the conservative end of that continuum, 17,000 jobs is about 24 basis points of the total number of unemployed, or less than one quarter of one percent. So if the Feds are willing to spend or trim $2.3 billion per 17,000 restored jobs, what would be the cost of restoring all 7 million of the lost jobs? By my calculation, it would cost roughly $920 billion. And let’s face it, a billion here, and a billion there, and pretty soon you’re talking real money.
What’s troubling about the current data is the fact that an estimated 6.1 million people have been unemployed for more than 6 months. That’s about 40% of the total unemployment number, according to the official count. That’s a new record. And while the official unemployment rate is holding steady at 10%, this figure has, as even the Feds acknowledge, a built-in inaccuracy.
In December, the Feds subtracted a total of 661,000 jobless people from their official unemployment tally. Why? Because these jobless people had been unemployed so long, the federal bean counters decided they didn’t really deserve the “unemployed” label any longer. They were simply people without jobs. Now, if the data massagers in DC added these “non-unemployed jobless” folks back into the mix, the official unemployment rate would surely be nudged above the 10% line again. But nobody in Washington really wants that. It might give people the wrong idea.