The Discouraging Untold Story Behind the February Jobs Report

By Joe Guzzardi
March 12, 2012

With its typical fanfare, the White House announced that the economy created 227,000 jobs in February. In what’s best described as a campaign speech for his boss, White House economic advisor Alan Kreuger hailed the news as evidence that the Obama administration’s jobs strategy is successful.

A close analysis of February’s jobs report exposes a less encouraging picture. The number of unemployed Americans and the unemployment rate remained unchanged from January at, respectively, 12.8 million and 8.3 percent.

As it always does, the Bureau of Labor Statistics relied on the payroll survey to reach its findings. Despite months of so called “robust job gains,” about 5.4 million have been jobless for more than 27 weeks and 1.2 million have given up looking for work. Unemployment benefits have expired for some; others will end in 2012.

Unemployment’s long term effects are devastating. The longer prospective workers remain unemployed, the faster their skills erode and the harder it is for them to find a decent job. More than 40 percent of the total unemployed are categorized as “long term.” One contributing factor may be the extended unemployment benefits which some economists claim reduces the incentive to actively pursue work.

Another grim variable the White House ignores is that current job creation doesn’t keep up with population growth. The further back you go, the less comforting the jobs to population growth ratio becomes. The nation needs 5.6 million jobs to return to 2008 levels.

According to statistics crunched by the Economic Policy Institute for CNN Money, California would have to create 1.8 million jobs to keep up with its growing population. That represents nearly 12 percent more jobs than exist today. Despite its deep economic woes and huge budget deficit California’s working age population, fueled in large part by immigration, has increased by one million since the 2007 recession started. California’s unemployment rate is 10.9 percent, the nation’s second highest.

Another problem the administration gives short shrift to is the type of jobs created. According to statistician John Williams, 92 percent of the new February jobs are in low wage service positions. As examples, waiting on tables and tending bar accounted for 20 percent of the overall jobs increase while 29 percent of the spike came in health care and social services. Driving a truck is one of the highest paying new service jobs.

By extension, only about eight percent of new jobs could be considered professional, like engineering or computer-related employment. As good jobs disappear, the United States’ income disparity grows greater and the nation becomes more deeply entrenched as a two-tier society—a handful of super-rich and millions of poor.

One crucial variable the administration refuses to acknowledge much less change is immigration which fuels about 75 percent of the population growth. Legal immigrants—about 1 million a year—receive work permits. More legally authorized people increases the work force and reduce job opportunities for native-born Americans.

The relationship between more immigration and fewer jobs is undeniable. Yet Capitol Hill is unwilling to help unemployed Americans by reducing immigration. As a result, the White House has to cook the employment books every month to create as favorable a picture of the economy as possible.

Joe Guzzardi is a Californians for Population Stabilization Senior Writing Fellow. His columns have been syndicated since 1986. Contact him at [email protected].