Today’s report from the Department of Labor shows that a net total of 146,000 jobs were created and the unemployment rate fell to 7.7 percent in November. While any job creation is welcomed, it is important to put them in perspective.
Due to the size of the American workforce, gaining 146,000 jobs per month just won’t cut it. The country is still more than 4 million jobs short of its peak of 138 million in January 2008. As the Brookings Institution chart below shows, at this pace, it will take well past 2025 until all the jobs lost during the last recession are recovered. At over 16 years, this would be more than twice as long as it took to recover the jobs lost during the Great Depression.
The unemployment rate fell in November because 350,000 people gave up looking for work and dropped out of the labor force, not because significant numbers of Americans found jobs. In fact, the survey that is used to calculate the unemployment rate showed that employment actually fell by 122,000 last month. Throughout the Obama Administration, Americans have been dropping out of the labor force in droves. This has led to significant “invisible” unemployment, as jobless individuals are no longer counted as officially unemployed once they have dropped out of the labor force and are no longer searching for work. If these “invisible unemployed” individuals were in the official labor force, they would be counted as officially unemployed – raising the current 7.7 percent unemployment rate to almost 11 percent.
While any increase in employment is positive, this month’s numbers simply don’t cut it. Employers are looking for a resolution to the fiscal cliff and some certainty for the future before they begin hiring once again. Republicans have done their part. It’s time for President Obama to come to the table with a serious offer to rein in Washington’s out-of-control spending and put our country back on track.