Houston Democrats

Here are some observations from the report.

“Our first and most important finding is that the current recovery has been the worst in US economic history in terms of jobs creation.”

“The duration of joblessness has been high three years into the recovery and an exceptional proportion of people not participating in the job market want to work.”

According to these tables from the Bureau of Labor Statistics, the number of people 16 years and over who were unemployed for 5-14 weeks increased about 1,850,000 on average at the end of 2000 to 2,250,000 – 2,500,000 during the recovery. The number of unemployed for 15 weeks or longer topped at 3,500,000 in mid-2003 dropping to 2,500,000 in the most recent survey. The number of unemployed for more than 27 weeks topped at 2 million in mid-2003 and is currently about 1,400,000. These figures have been persistently high, especially considering the economy “turned the corner” in the first quarter of 2003.

In addition, the only industry to experience about average job creation for this point in the recovery is construction. All other areas of the economy are creating jobs as a lower rate than previous recoveries.

“A large share of jobs created in the recovery were temporary. Almost 30% of the jobs created from November 2001 to December 2004 were temporary.” This is a sign of extreme weakness. If businesses were confident about future business plans, they would hire permanent employees to implement the plan. However, the high amount temporary workers indicates businesses are still skittish about the recovery. In addition, businesses don’t have to provide temporary workers health insurance.

And what of health insurance, and its effect on the job market? “The Kaiser Foundation found employment growth for people with employer-sponsored health plans fell 2.8% between 2000 and 2003. This finding is consistent with the notion that some of the stagnant employment growth may be associated with rising health care costs.” In other words, the US’ system of dealing with health care is impeding job growth.

In conclusion, this is the third government report highlighting the weakness of the current employment market. None of the reporting organizations are members of the “left wing”; they are all essentially middle of the road policy centers whose purpose is to understand the economy outside of political considerations. Their respective conclusions are the same:the job market is weak at best.