Jobs Still the Biggest Challenge Facing U.S. Leaders
Policy + Politics

Jobs Still the Biggest Challenge Facing U.S. Leaders

REUTERS/Keith Bedford

The reaction to Friday's jobs report from the Bureau of Labor Statistics is the latest example of a nation with lowered economic expectations.

On its face, the report offered good news. The economy added 195,000 jobs in June and beat the forecasters’ estimates. The private sector added 202,000 jobs, while governments — state, local and federal — cut back by just 7,000. The government also revised upward the jobs numbers for the two previous months.


Over the first half of the year, the economy has added 1.2 million jobs to the workforce, an average of 200,000 a month. Over the past 12 months, 2.3 million jobs have been added. That is steady progress — and only the latest evidence of an economic recovery that is moving forward month by month. It was greeted as such, taken as a sign that the Federal Reserve might begin to taper off its monetary stimulus for the economy early this fall.

But other numbers from Friday tell a less positive story. Despite the growth in jobs, the unemployment rate held steady at 7.6 percent, because more people were looking for work than in the previous month. And 332,000 more people said they were working part time because of economic conditions, rather than by choice. At the same time, long-term unemployment remains acute. Of the 11.8 million unemployed workers, more than 4.3 million have been out of work for 27 weeks or more.


Overall growth rates during the past six months have been tepid. The economy grew at less than 1 percent in the fourth quarter of 2012, and the latest revision of first-quarter growth this year reduced the rate from 2.4 percent annually to 1.8 percent.

Based on public-opinion surveys, Americans feel better about the economy than they did a year or certainly two years ago. The economy still tops the list when people are asked to identify the most important issue facing the country, but not to the extent it once did. (Gallup reported last month that dissatisfaction with government in Washington has risen, however.) Consumer confidence also has risen.

Housing prices are up, and so are home purchases. And the stock market, although it has retrenched somewhat in the past month, has advanced smartly. For some Americans, the economic recovery is real and robust. That relieves the pressure on politicians. They can worry less about the economy without paying a price. But nearing the five-year mark since the economy tanked in the fall of 2008, it’s clear that producing more and better-paying jobs remains the biggest challenge facing the country’s leaders.

The reality is that the economy isn’t employing nearly as large a share of the potential workforce as it once did. Heidi Shierholz of the Economic Policy Institute offered an analysis Friday that compared the percentage of the working-age population employed today with the levels before the recession. In early 2007, 63.3 percent of working-age Americans had a job. The latest report pegs that percentage at just 58.7 percent.

Shierholz also looked at the ratio for those of prime working age, a somewhat fairer measure of conditions then and now. The percentage of people ages 25 to 54 who were employed in early 2007 was 80 percent. It dropped to 74.8 percent in late 2009. Although it has risen since then, it is still just 75.9 percent.

The jobs report produced another predictable set of responses from the White House and Republican congressional leaders. The administration statement highlighted the continued growth in jobs but, as with every monthly statement over the past several years, avoided sounding too pleased, cautioning that “more work remains to be done.” Republicans stressed how much remains undone but, not wanting to sound too negative, noted that the jobs report represented good news for those Americans who had found jobs.


Politicians should not overreact to monthly numbers, good or bad. But an economy working primarily for the best-off Americans should not be the standard by which politicians judge the state of the recovery. That certainly wasn’t the measure by which the president waged his reelection campaign last year. Obama vigorously attacked Mitt Romney as someone whose policies would benefit only the wealthy (although Romney said he was more concerned about the middle class than either the rich or the poor).

Obama made the election a referendum on middle-class anxiety and asked voters to choose the candidate they trusted more with their futures. He has continued to talk about those themes since his reelection, but they have not been his principal focus. What’s been missing is a sense that the middle-class agenda remains at the core of his presidency.

Republicans don’t offer much, either. Some have talked about the need to develop new policies designed to help struggling middle-class families, but there is neither a consensus nor a sense of urgency inside the party on this front. Instead, most Republicans have taken every opportunity to claim that the Affordable Care Act is the major cause of economic problems and are doing what they can to make its implementation more difficult.

Congress shows little ability to deal with multiple issues at the same time. Immigration now dominates the agenda on Capitol Hill, with the focus shifting this week to the House. The House could be dealing with the issue for the rest of the year.

For now, Congress has punted on the budget, having allowed sequestration to take effect rather than find a bipartisan solution. Across-the-board cuts continue to squeeze spending, and though it may not be as draconian in its economic impact as some (such as the president) had predicted, the sequester is no substitute for a real budget or an economic policy.

Economic experts said the recovery would take years, and as a result no one expects miracle cures. But when the unemployment rate ticks down ever so slowly and the broader problem of wage stagnation keeps many families on the edge financially, it’s surprising that more effort isn’t going into an issue that both the public and the politicians still say is the nation’s most acute problem.

This article originally appeared in The Washington Post.

Read more in The Washington Post:
NSA Leaks Raise More Concerns
Congress Returns to Busy July
White House Wrote Memo on 'Magic' of Valerie Jarrett