Reich writes: "The biggest political news this week won't be the Democratic convention. It will be Friday's unemployment report."

Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)

The Most Important Political News This Week

By Robert Reich, Robert Reich's Blog

05 September 12

he biggest political news this week won't be the Democratic convention. It will be Friday's unemployment report.

If the trend is good - if the rate of unemployment drops and the number of payroll jobs is as good if not better than it was in July - President Obama's claim we're on the right track gains crucial credibility. But if these numbers are moving in the wrong direction, Romney's claim the nation needs a new start may appear more credible.

I don't recall a time when these jobs numbers, compiled monthly by the Bureau of Labor Statistics (a highly professional group whose findings are completely insulated from politics), were as politically significant as they'll be this Friday, and the first Fridays in October and November.

Yet these numbers are really crude approximations. They're adjusted for seasonal variations - based on historical data that may have less significance today, when the economy is still struggling to emerge from the worst downturn since the Great Depression. The numbers are also subject to corrections and revisions later, as more data come in.

But perhaps the biggest flaw - and irony - is that when and if jobs really do start to return, many of the people who had been too discouraged to look for work start looking again. And when more people are looking, the rate of unemployment rises - because that rate is based on the percent of Americans actively looking for work. Those who have stopped looking aren't counted.

Robert B. Reich, Chancellor's Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including the best sellers "Aftershock" and "The Work of Nations." His latest is an e-book, "Beyond Outrage." He is also a founding editor of the American Prospect magazine and chairman of Common Cause.

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+26 # BradFromSalem 2012-09-05 09:57

I have a instinctive mistrust of seasonally adjusted numbers for anything. First, they represent performance against an assumed variation, so you get a guess of a guess. To me, you have just squared the size of the range of accuracy.
Sticking to unemployment why can't we use simple heuristics to measure it. Add the number of unique persons paying into SS from employment (plus exempted government employees) and call then the employed. Unemployed are the people not collecting SS. Divide and publish the percentages.
This is so simple that the numbers could be published weekly along with a quarterly adjustment for the self employed that only report quarterly.

Trends could tracked in almost real time and if we had an economy that was tuned to adjust to downturns, any future problems would be minimized.

+3 # cenglish10 2012-09-05 10:35

I like it! I wonder what Robert Reich would have to say to that idea?

+30 # dkonstruction 2012-09-05 10:03

what's lacking from the "jobs" discussion is any talk about the need to cut the work week (given the tremendous increases in "productivity" due to technological advances) as part of an overall jobs strategy.

Cutting the work day/work week was always a part of the organized working class' demands (along with better wages, working conditions, etc.) but since we won has all but vanished from the political landscape.

It was disheartening (at best) to hear someone at the Democratic Convention last night talk about an auto worker (i think it was an auto worker) who now has work again due to Obama's rescue of the auto industry (such that it was and despite the fact that it sold out future auto workers and really only protected current workers) and then said the guy was now working 60 hours a week! If this wasn't a mistake then is this what the dems are actually campaigning on? A 60 hour work week! Is this progress?

We need to restore some sense of "vision" to progressive demands and cutting the work week (along with instituting a guaranteed national income) have to be part of the conversation along with calls for jobs (which also has to be much more specific...what kinds of jobs; at what wages, benefits and working conditions).

Sorry, if a 60 hour work week is the "progressive" alternative then no wonder people are looking elsewhere (and truly raises the specter of the emergence of a full fledged american fascist movement).

+9 # BradFromSalem 2012-09-05 10:28

DK,

I missed that. Your idea is a great goal, but first we have to get wages moving upwards again (after 30+ years of stagnation and erosion). Then we need to remove health insurance as a benefit of employment and make health care fully funded. If we don't make those fundamental changes concurrently with, or before cutting the work week, it will be used to lower wages even more.

+1 # dkonstruction 2012-09-06 05:11

Quoting BradFromSalem:

DK,

I missed that. Your idea is a great goal, but first we have to get wages moving upwards again (after 30+ years of stagnation and erosion). Then we need to remove health insurance as a benefit of employment and make health care fully funded. If we don't make those fundamental changes concurrently with, or before cutting the work week, it will be used to lower wages even more.

thanks for the thoughtful comment. I agree completely that we need to fight for universal health care in a system not tied to ones job. As for the cut in the work week lowering wages, historically, the demand has always been for a cut in the work week with no corresponding cut in pay (i.e., wages go up so that ones wages remain the same).

+5 # mjc 2012-09-05 13:18

You can't have people accepting a cut in the work week when jobs are so scarce, but your comment about the emergence of a full fledged American fascist movement are quite accurate. Believe that the Teapublicans do believe a 60 hour work week is okay for the majority of Americans with the wealthy able to cruise or enjoy various cultural events anywhere in the world at their leisure. Wish Reich had waited until the jobs picture had actually been published.

-4 # edge 2012-09-05 14:12

Quoting dkonstruction:

what's lacking from the "jobs" discussion is any talk about the need to cut the work week...

It has been done and 23 million Americans work ZERO hours...I hope you are happy!

+2 # dkonstruction 2012-09-06 05:18

So, your response to someone suggesting that perhaps, as part of an overall "full employment" strategy we need to once again start talking about cutting the work day/work week and responding to one of the democratic speakers talking about a 60 hour work week is to somehow link this demand with the fact that we now have 23 million americans out of work (or that I'm "happy" about it)?

Sad, that this is the state of political discourse in this country...how is your comment any better than anything put out by Fox News or Rush Limbaugh?

+7 # Virginia 2012-09-05 10:32

The news last night headlined "46 million Americans are on food stamps - a record high." This is likely 46 million American families (2.5 per household) because the government only provides the program on a household basis. That means the actual number would be 115 million Americans are on food stamps.

The point is that the statistical reporting is inaccurate and played down whether it is the overall debt, the food stamps, homeless, foreclosures, unemployment - it doesn't matter...and probably because they don't know the real numbers or are afraid to tell the truth. The one thing that they think they do know is that the numbers are really bad and the general public can't handle the truth.

PS. The broadcast media used to strive for accuracy when it was a public trust - but since it changed to a "property rights" status in the 1990s along with the other laws that were manipulated and repealed - we can no longer can rely on the information.

+6 # ericlipps 2012-09-05 13:50

Quoting Virginia:

The news last night headlined "46 million Americans are on food stamps - a record high." This is likely 46 million American families (2.5 per household) because the government only provides the program on a household basis. That means the actual number would be 115 million Americans are on food stamps.

I suspect you're wtrong on that point, but can't prove it. Food stamps can be granted to individuals (I was briefly on them in the 1990s), and the 46 millioon frigure is likely an estimate which already takes that 2.5-people-per- household average into account. Even so, that's a lot of folks on food assistance in the richest country on Earth.

+1 # Virginia 2012-09-07 18:13

The unofficially unemployed - majority likely eligible for food stamps:

Last year there were 86 million people who didn't have a job and weren't consistently looking for one, according to Labor Department data.

Older people, ages 65 and over, account for more than a third. Young people between 16 and 24 make up another fifth. More than half don't have a college degree and more than two thirds are white.
Many of the teens and 20-somethings may be enrolled in either high school or college full-time. And many of the over 65 crowd are probably retired.

But what about the other 36 million folks who fall in between?
The truth is, the Labor Department simply doesn't know why they're not in the labor force. Many may be staying home with children or other relatives. Some may have gone back to school or retraining programs. Others could be disabled and unable to work, and some may have retired early. http://money.cnn.com/2012/05/03/news/economy/unemployment-rate/index.htm

This was from April 2012 and it has gotten worse - not better. Don't listen to percentages because this richest country on earth doesn't always provide large number stats...cause they know most people won't do the research or the math...they just ASSUME.

+2 # hillwright 2012-09-05 15:03

I believe the "anti-Obama" ads are saying "45-million people NEED food stamps". Whatever that means?

+9 # anntares 2012-09-05 10:32

I hope most Americans understand that the Republican House Reps have not let Obama's jobs programs come to votes or pass, they have refused to consider strategies that would have spared the state budgets and minimized lay-offs...

If Republicans win the election because people blame Obama's administration for the results of their selfish obstructionism, why should any developing countries want democracy?

-1 # jimattrell 2012-09-05 14:29

The House passed a number of jobs bils in the last several months and NONE were voted in the Senate..... I wonder why?

+6 # BradFromSalem 2012-09-05 15:42

Name one.

By the way, if the jobs bill does not actually create jobs but instead grants a tax cut it is welfare for whomever is the recipient of the cut, not a jobs bill.

+8 # Swamib 2012-09-05 10:59

We also need to consider what "jobs" are. Are the things that people are getting paid to do truly valuable? Does it make sense for a professional athlete to receive $30 million ... or their agents to receive $3 million for rep'ing them? What about "work" like working for HMO's and finding reasons to deny people coverage? What if the money that paid their salaries went to actual health care? What about the huge amount of money that goes into the BS industries of advertising and PR? Of course, not all of that is BS ... but it's certainly true that in our society, BS artists tend to make a lot more than real ones.

But seriously ... as the house of credit card economy heaves it's last dysfunctional sigh ... we need to individually, in communities and as a society decide what is truly of value, and then through private enterprise and public will, bring this new economics into play. We need to ask, what are we producing and for what purpose?

-13 # engelbach 2012-09-05 11:34

Whether unemployment numbers rise or fall, I fail to see how the government has anything to do with it.

There has been zero government action to create jobs. The 2009 stimulus was way too small, and the jobs bill was shot down by the House.

Since then, we've heard nothing from the Administration about a jobs program.

"Waiting and seeing" is not an accomplishment.

-16 # jimattrell 2012-09-05 14:30

Govt does not and can not create permanent jobs except for Govt jobs. The Private Sector creates all the real permanent jobs.

+8 # BradFromSalem 2012-09-05 15:45

They are still jobs. It takes a number of permanent teachers for a school system, administer Social Security, enforce EPA rules, etc.

How do you ignore a huge sector of our economy?

+2 # soularddave 2012-09-05 19:09

Quoting jimattrell:

Govt does not and can not create permanent jobs except for Govt jobs.

Over the last decade, gas prices have doubled, right along with the fuel tax (same percentage). That has made more money available for road and bridge building.
The government doesn't provide the money; WE DO! The "private sector" just skims off a percentage as PROFIT.

To go on... The workers buy gas and pay taxes, as do the corporations. That money doesn't just go away, it comes back as teachers, first responders, school builders, airports, and the military.

It all adds up within the life cycle of the economy, and makes the GDP possible.

+6 # dkonstruction 2012-09-06 05:25

Quoting jimattrell:

Govt does not and can not create permanent jobs except for Govt jobs. The Private Sector creates all the real permanent jobs.

Tell that to the 8.5 million people employed under the New Deal's WPA who built 650,000 miles of highways and roads and 125,000 public buildings, as well as bridges, reservoirs, irrigation systems, sewage treatment plants, parks, playgrounds and swimming pools and playgrounds nationwide.

Not to mention that public school teachers, fire fighters, cops, sanitation workers, etc., are all (or should be) permanent, good paying, union jobs with decent wages, benefits and a pension....as opposed to Wallmart that creates entry level jobs with wages deliberately set so low to make these employees eligible for food stamps (i.e., you and ther rest of us taxpayers are subsidizing Wallmart's profits)...Romn ey's "Staples" average wage is about $10 an hour which for a family of four still leaves them in poverty.....so, what was that again about the private sector?

+2 # rockieball 2012-09-06 07:54

True in some respect. The Government can help the private sector create jobs and help it's citizens gain employment by rules and regulations in the form of tariffs on foreign made goods, not by having free trade agreements that benefit the corporations and undermine the countries workforce. By taxing the imported goods that are in conflict with goods made in the country, which is something of a rarity today, factories stayed open and people remained employed. In return the employed people paid taxes and bought the goods manufactured in the country. That changed with allowing companies to relocate to other countries. Thus causing the dismantling of the countries manufacturing infrastructure and putting the worker out of a job, while gaining higher profits for the corporations and their owners. Thus also creating the wider gap between the rich and middle class the the increasing narrow gap between the middle class and poor.

+4 # reiverpacific 2012-09-05 16:12

Quoting engelbach:

Whether unemployment numbers rise or fall, I fail to see how the government has anything to do with it.

There has been zero government action to create jobs. The 2009 stimulus was way too small, and the jobs bill was shot down by the House.
Since then, we've heard nothing from the Administration about a jobs program.

"Waiting and seeing" is not an accomplishment.

Another naysayer without any ideas.
If government would come up with a prioritzed and visionary infrastructure revitalization plan -and they are the only entity that can fund such a long-term project, the contracts and sub-contracts alone would put millions of professional, skilled, semi-skilled and manual labor people back to work as well as many laid-off stated and federal employees. I'm writing to the president and several departments all over the federal map and my own state on this theme.
What are YOU doing?

+3 # soularddave 2012-09-05 18:58

Quoting engelbach:

There has been zero government action to create jobs.

Bridges don't build themselves here in St. Louis, nor do highways repair themselves. I see an awful lot of orange barrels, red cones, cherry pickers, and earth moving equipment these days. I bet there are 3,000 such workers within sight of the Gateway Arch.

+5 # ritaague 2012-09-05 11:38

Thank you again, Prof. Reich, for educating us again. We the sheeple need lots and lots of educatin' these so troubled days. Finding answers in our MSD'ed (manipulated, spun, distracted) life, all the while Faux Newsed in particular and mess media MSDed in general, ain't easy.

Keep on instructing us, prof.. Taking of the blinders and leaving La La Land is difficult, and then some.

+9 # pbbrodie 2012-09-05 11:39

If industry is going to continue to insist that workers work these ridiculously long hours, then labor must insist that the overtime law be changed from 1 and 1/2 times regular pay for anything over 8 hours a day and 40 hours a week to 2 times or even 2.5 times normal hourly wages for overtime. That would put a really stiff price on working people to death and reduce overtime significantly. The next step is to reduce the work week and "normal" hours before overtime kicks in to a 35 hour week and a 7 hour day. Both of these would create tremendous numbers of new jobs.

+6 # hillwright 2012-09-05 15:08

We should get back to refusing to work without a contract...!
Union contracts are what gave us weekends, paid vacations, and a strong middle class (with purchasing power).

+12 # Smokey 2012-09-05 11:57

Organized labor organized the push for better working condition and for equitable compensation... . When organized labor again becomes a major political force, the political landscape will improve.... Until organized labor makes a comeback - well, what do you think will happen in politics and in the economy? "There ain't no substitute for a powerful labor movement." The big corportations don't care how many hours their employees work.

-21 # jimattrell 2012-09-05 14:33

It's organized labor that ruined such places as Detroit and that has caused fiscal chaos in almost every liberal contolled city in America. Look around and look closely and you'll find that where unions don't exist the unemployment is low.

+8 # cabotool 2012-09-05 16:43

!!!! Where there are no labor unions, the Mittens of the world pay slave wages (including incidentally in China) and thus there are plenty of low wage jobs. People without a union have to take what they can get... and that is not much at all!

I have never been in a union so I can take an unbiased point of view!

+4 # soularddave 2012-09-05 19:28

Quoting jimattrell:

Look around and look closely and you'll find that where unions don't exist the unemployment is low.

Dr. Reich mentioned the Bureau of Labor Statistics. Think of a state with few labor unions, then go look at the facts here: http://www.bls.gov/web/laus/laumstrk.htm
Then compare those numbers with these:
http://www.bls.gov/news.release/union2.t05.htm

Are you kidding?? Do you know who you're arguing with?? Dr. Reich does these figures in his sleep. He was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century.

+3 # dkonstruction 2012-09-06 05:29

Quoting jimattrell:

It's organized labor that ruined such places as Detroit and that has caused fiscal chaos in almost every liberal contolled city in America. Look around and look closely and you'll find that where unions don't exist the unemployment is low.

Absolute nonsense...prov ide one shred of evidence?

The auto industry destroyed itself by putting profits ahead of product quality such that for a long time everyone knew american gas guzzling cars were being made like crap while the japanese were putting out a much better product that people were willing to pay more for because at least it was a good product.

Over the years, the UAW has given back, given back and given back even more and yet the auto industries response was outsource, outsource, outsource.

What you will find where unions don't exist are the lowest wages so why not just bring back slavery...no unions and no wages...you'll get "the best" of both.

+3 # rockieball 2012-09-06 08:05

You are wrong here it's organized labor and it's supporters like Teddy Roosevelt that has giving you a lot. The 40 hour work week, vacations, sick time, livable wages, pensions and also paid single payment healthcare for it's members. Unions ended sweat shops, child labor, created better working conditions. In the 40's thru the 70's until Reagan an anti unionist fired the Air Traffic thus sending a message to the corporations that he would not prevent union busting, that the real quality of life along with wages went down in this country. The majority of the people were in unions and thus you did not hear the cry for universal healthcare because they were covered under a binding contract. You did not see government involvement in strikes and disputes. You also did not see cars recalled by Detroit until they moved manufacturing of parts to other countries and later assembly as well, just for more profit and cheaper labor. Thus this country got what they paid for cheaply and poorly made product in all sectors of manufacturing.

+1 # cordleycoit 2012-09-05 15:13

How come these wise men cannot write about the bot take down of the DNC or are we watching the news miss the news again, The take down was automatic and there was no stopping it even though all thenformation was "Cleared"

+9 # douglassmyth 2012-09-05 15:59

Looking at the list of states and their unemployment rates, I believe you're overstating the case. Vermont is at 5%, for example and Mississippi is tied with NY at 9.1, below Georgia at 9.3. It is true that highly unionized Nevada has the highest rate of unemployment and less unionized North Dakota has the lowest (3%), but ND has an oil/gas boom, while Nevada has a gambling crash.

Further, unions did not ruin highly successful Germany or Sweden, and those countries are not only doing better, despite the Euro difficulties than we are, they also have more benefits and better wages, and opportunities.

+1 # John Steinsvold 2012-09-05 17:46

An Alternative to Capitalism (since we cannot legislate morality)

Several decades ago, Margaret Thatcher claimed: "There is no alternative". She was referring to capitalism. Today, this negative attitude still persists.

I would like to offer an alternative to capitalism for the American people to consider. Please click on the following link. It will take you to an essay titled: "Home of the Brave?" which was published by the Athenaeum Library of Philosophy:

http://evans-experientialism.freewebspace.com/steinsvold.htm

John Steinsvold

“Insanity is doing the same thing over and over and expecting a different result."~ Albert Einstein

+2 # Susan W 2012-09-05 20:28

It really isn't about who is going to win the Presidential election; it's about all those suffering workers who cannot find jobs. To use them as anonymous pawns in a numbers game to win an election is distasteful at best and unconscioncable at worst. Manipulating the numbers to make one or the other candidate look better is disgusting.

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