By David Howell, June 1st, 2012 
In this morning’s press release on the employment numbers for May, the Bureau of Labor Statistics’ lead was “no change”: non-farm employment “changed little (+69,000)” and “the unemployment rate was essentially unchanged at 8.2%.” But little change in a severely depressed labor market is very bad news for workers. Even worse news for the Obama Administration is that the labor market so far in 2012 shows no sign of the turnaround he needs.
While it’s true that the increase in employment of 69,000 was not much below April’s increase of 77,000, it was 143,000 in March and higher than that in February. The unemployment rate’s increase from 8.1% to 8.2% can be viewed as essentially unchanged because it’s small, but if these figures hold up, the data still show 220,000 more unemployed than the month before.
Unfortunately, this bad news is likely to hold up because the same trends appear across lots of related indicators: the recently unemployed (less than 5 weeks) increased from 2.54 to 2.58 million; seasonally adjusted initial unemployment insurance claims rose by 10,000 (to 383,000, about where it has been stuck for the last 6 months despite the tightening of eligibility requirements by many States); the long-term unemployment rate (27+ weeks) increased quite substantially, from 5.1 to 5.4 million), as did the median duration of unemployment (from 19.4 to 20.1 weeks). Significantly, the rate of those working part-time but want a full-time job also increased, from 7.8 to 8.1 million. And to top it off, average hourly pay for non-supervisory workers has been flat at $19.70 (up 3 cents from March).
The problem, of course, is that while private sector employers have not been hiring at a pace that offsets the massive job destruction of 2008-10, austerity politics is actually leading to absolute reductions in government employment, and at an accelerating rate. Obama is in a tough spot, since even if employment picks up dramatically, the unemployment rate could continue to increase as millions of discouraged workers re-enter the labor force.
By Richard Alba, April 16th, 2012 
It’s sometimes said that presidents don’t control the economic weather but rather it controls them. We have reached the moment, however, when magical powers are going to be attributed to the presidency, and the current incumbent, like the sorcerer’s apprentice, will be charged with incompetence in using them. One manifestation of this thinking is the Romney campaign’s recent claim that women have suffered more than 90 percent of the jobs lost since Obama became president, a blatant attempt to undermine his lead among women voters. This claim involves two distortions; and most of the mainstream media have caught what I view as the smaller one—namely, that the claim ignores the full history of the recession and the huge job losses borne by men when George Bush was president.
The larger distortion has generally gone unnoticed, indeed, it has been mostly accepted. According to it, some 740 thousand jobs have been lost on Obama’s watch. This claim is another expression of the Republican mantra about a “failed” presidency. And it involves some statistical crafting to fit the data to the argument, manipulating data in a way that we are likely to see a lot more of as the campaign proceeds, especially given the huge amounts of money available to hire “researchers” to come up with “facts.”
The Romney campaign arrives at the estimate by attributing to Obama all of the job losses since February 1, 2009, even though he had barely taken office at that point and there was not enough time for any of the new administration’s policies to have an impact. To understand how much timing matters in this case, recall that Obama entered the White House when the labor market was already in a swoon, and the number of jobs lost that February was more than 700 thousand, on a par with the losses for the final months of Bush’s second term. If we tally the jobs record of the current administration from March 1 instead of February 1, then the jobs deficit under Obama shrinks dramatically to 16,000 and, with any luck, will be erased in coming . . .
Read more: Phony Data on Jobs and the Obama Administration
By William Milberg, September 8th, 2011 
The failure of economics in the runup to and aftermath of the Great Recession has generated a lively debate about how to reform economics and more specifically about the renewed relevance of Keynesian economics, which had fallen out of favor since the 1970s. The Keynesian message, so important in this latest round of political wrangling over the increase in the US debt ceiling, is that cutting government spending in a slump will only worsen the unemployment problem. The role of expansionary fiscal policy, according to Keynesianism 101, is to provide demand for goods (and thus for employees to produce those goods) when the main sources of demand in a capitalist economy — households and businesses – are not providing a level of demand necessary to generate a socially acceptable level of unemployment.
Keynesianism 102 is about the multiplier effect of changes in spending. This is the notion that an increase in demand (from any source, not just government but certainly including government) will impact employment and incomes with a ripple effect. This includes a direct impact and then a secondary impact when the direct incomes are then spent (in some fraction) and an additional fraction of that is spent, etc.
There are two corollaries to the lesson of Keynesianism 102 that are worth mentioning because they have been raised in the current policy debate. The first is about the differential multiplier effect of a spending increase compared to a tax cut. Empirical studies show that the multiplier effect of the former is greater than the multiplier effect of the latter. The second is about the differential multiplier effect depending on the income of the recipients. Since the poor are more likely to spend a higher percentage of additional disposable income than the rich, a tax cut that benefits low-income people will have a bigger multiplier effect than a tax cut that benefits the rich.
These lessons have not been integrated into current economic policy in the US, where deficit spending and progressive tax reform and expanded benefits for . . .
Read more: Unemployment Equilibrium: Keynesianism 103
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