Decent Productivity, No Jobs

Another horrible jobs report came out today - the only good news for the Republicans is that there will only be one or two more before the election.

The U.S. lost more jobs than forecast in August and the unemployment rate climbed to a five- year high, heightening the risk that the economic slowdown will worsen.

Payrolls fell by 84,000 in August, and revisions added another 58,000 to job losses for the prior two months, the Labor Department said today in Washington. The jobless rate jumped to 6.1 percent, matching the level of September 2003, from 5.7 percent the prior month.

What's odd is that the productivity statistics were actually up for the last quarter, companies appear to be getting more out of less. I don't think that's an efficiency argument, though, because we simply have less in this country to produce, with the flight of manufacuring jobs. Krugman muses on this:

But to be fair, this is an odd slowdown, by historical norms: no clear decline in GDP, no months of 6-digit job losses. Instead, the economy is being slowly ground down.

What I suspect, however, is that this is what the 21st-century business cycle looks like. The sharp slumps of the past partly reflected an inflation-prone environment, in which the Fed occasionally had to slam on the brakes; it also reflected a mainly goods-producing economy, with lots of inventories, in which recessions had a lot to do with inventory adjustments.

Right, and now that we produce no goods, the jobs of the 21st century in America at this point are expendable, useless, just middle managers pushing money and information around, and eliminating them has little impact on GDP. But it does have a major impact on families, and in the long term it's completely unsustainable. This is why we need a green jobs program that brings the manufacturing and construction sectors back to America and actually adds some balance to the economy. Sen. Obama is right on this:

"Today's jobs report is a reminder of what's at stake in this election – John McCain showed last night that he is intent on continuing the economic policies that just this year have caused the American economy to lose 605,000 jobs. John McCain may believe that the fundamentals of our economy are 'strong,' but the working men and women I meet every day are working harder for less, the typical working age family's income is down $2,000 since George Bush took office, and their purchasing power is as low as it's been in a decade.

His solution is middle-class tax relief and block grants to the states so they don't eliminate their own jobs, but the green collar program, providing incentives and encouragement to create 5 million new jobs building the energy infrastructure of the future, is the only way to end this terrible cycle of misery.