Jobs a washout in Aug.; pressure is on Washington

Job seekers filling out paperwork Aug. 31 on the top of a trash barrel at a job fair called the "For the People Jobs Initiative," where job seekers met employers, job counselors, skills trainers and others, at Crenshaw Christian Center in South Los Angeles. Employers added no net workers last month and the unemployment rate was unchanged, a sign that many were nervous the U.S. economy is at risk of slipping into another recession.
Job seekers filling out paperwork Aug. 31 on the top of a trash barrel at a job fair called the "For the People Jobs Initiative," where job seekers met employers, job counselors, skills trainers and others, at Crenshaw Christian Center in South Los Angeles. Employers added no net workers last month and the unemployment rate was unchanged, a sign that many were nervous the U.S. economy is at risk of slipping into another recession. (Reed Saxon / Associated Press)
Posted: September 02, 2011

With the nation's job creation engine at a complete stall, the pressure will be on President Obama and Congress as they return from their summer recess and prepare for the approaching election season.

On Friday, for the first time since February 1945, the U.S. Labor Department reported a net job change of zero.

The private sector created 17,000 jobs, but those were offset by a cut of 17,000 government jobs, the department said in its monthly employment situation report, issued Friday.

The unemployment rate remained unchanged at 9.1 percent.

It's not surprising, given the nation's rancorous political climate, that there are two diametrically opposed ideas about how the government should respond to the nation's abysmal job situation:

The government should do something - build roads, fix bridges, continue federal unemployment compensation benefits beyond Dec. 31.

Or, the government should get out of the way - lessen regulations, push back against unions, give businesses more leeway to create jobs on their own.

"We are seeing a lot of anger and frustration that unemployment is still so high," said economist Diana Furchtgott-Roth, a senior fellow at the Manhattan Institute who belongs to the government-get-out-of-the-way-camp.

"Now is not the time for the U.S. Department of the Interior to tighten its standards for ozone and coal emissions. Now is not the time for the U.S. Labor Department to put in new affirmative-action regulations for [women] in construction," she said.

And she's appalled by the National Labor Relations Board's decision to take up a case that would delay Boeing's plan to build a manufacturing plant in South Carolina. "All these hoops..." she said. "If you go offshore and open a plant in China, you are fine."

Falling in the opposite camp is Christine Owens, executive director of the National Employment Law Project, an advocacy group that works on behalf of the unemployed.

"It's critical that the president propose and the Congress enact measures that put people back to work quickly, pay family-supporting wages, and lift the burden of recession from millions of hard-hit workers," she said in a statement. "We need forward-looking investments in areas like infrastructure and clean energy."

President Obama will provide his plan to address the nation's enduring joblessness on Thursday, when he speaks before a joint session of Congress.

Ideas under consideration include tax credits for businesses that expand their payrolls. The president has proposed a similar effort totaling $33 billion before.

With the number of unemployed hovering at 14 million, the president has made it clear that he will ask for extensions of a payroll-tax cut for workers and jobless benefits for the unemployed. Those two elements would cost about $175 billion.

Friday's report showed job losses in many sectors - losses that also caused losses on Wall Street. The Dow Jones industrial average lost 253 points, or 2.2 percent, to close at 11,240.

The report showed a continuing decline in construction, down 5,000 jobs. Manufacturing, which had been steadily adding jobs since October 2010, cut 3,000. There were also cuts in retail and transportation.

Most of the government losses were in local public education.

Last month's strike by 45,000 Verizon workers lowered the job totals. Those workers are back on the job, but will be counted next month.

The service sector added a net of 20,000 jobs, buoyed by the addition of 35,500 jobs in health care and social assistance.

Also up were professional and technical services, with hiring in legal services, engineering, computer system design, technical consulting and employment services.

The number of long-term unemployed - those out of work for six months - is still above six million and a broader unemployment rate that includes workers too discouraged to look for jobs and people forced to work part time because they can't find full-time work has risen to 16.2 percent, from a low of 15.8 percent in May.

Studies have shown that the longer people are out of work, the less likely that they are to be hired at all and the more likely that they will, eventually, be forced to accept work at significantly lower rates of pay, perhaps outside their field.

"Recessions are really costly," said Keith Hall, commissioner of the federal agency that collects the data, the U.S. Bureau of Labor Statistics.

"This has been a long recession and that has a real cost. The implications of this may impact people for years and years - even once we start to get a recovery. The number of long-term unemployed is so much higher than we've ever had - that's a real concern."

The nation's employment problems are producing a sense of malaise, both among those who have jobs and those who don't, according to a survey released last Thursday by the John J. Heldrich Center for Workforce Development at Rutgers University.

"Over 90 percent think the United States is headed for a many-year era of high unemployment and lack of good jobs at good wages," the study said. "In fact, just over one-third think this will become a permanent condition."

Heldrich researchers have surveyed the same random probability sample of workers - all of whom had been unemployed at some point between September 2008 and August 2009 - four times.

When the group was first surveyed in August 2009, 76 percent were out of work at that point. In August 2011, 41 percent of the group were unemployed. Half of the unemployed had been looking for work for two or more years.

More than half of those who landed work earned less money than they had in their previous jobs. Nearly 30 percent reported taking a pay cut of more than 31 percent.

Nearly half described their new jobs "as a step down," the survey said.

"The unemployed and formerly unemployed remain in dire economic straits," the report said. Six in 10 believe the decline in their financial status caused by unemployment "will be a permanent change in their economic fortunes."


Contact staff writer Jane M. Von Bergen at 215-854-2769, jvonbergen@phillynews.com or @JaneVonBergen on Twitter. Read her workplace blog at www.phillynews.com/Jobbing

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