Workforce: The jobless recovery

By T.K. MALOY, UPI Deputy Business Editor  |  June 6, 2003 at 6:27 PM
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WASHINGTON, June 6 (UPI) -- With Friday's U.S. Labor Department announcement that the unemployment rate increased to 6.1 percent for May, the nascent U.S. economic recovery seems stalled in a stagnant labor market where millions of workers remain out of work.

Reaction to the 6.1 percent unemployment rate (up from 6 percent in April) and to the 17,000 job loss number was mixed. The financial markets hailed the job loss number as less than expected, while labor unions and some economists and employment experts pointed to the overall unemployment report as indicative of a jobless recovery.

Responding to Friday's unemployment report, John Sweeney, leader of the AFL-CIO, the nation's largest association of unions, blasted the Bush administration's record on job creation.

"Today's employment report shows that for yet another month the economy cut jobs faster than it created new opportunities for people who want to work," Sweeney said. "The trend in job loss has been a hallmark of the Bush administration -- three million more workers are without jobs today than when President Bush took office, and more workers are unemployed now than at anytime in the last 10 years."

The labor leader also took the administration to task for its tax cut polices which have done little to assist the U.S. economy or to help lower and middle-income workers.

"From the standpoint of the growing ranks of unemployed, the president's tax cuts of 2001 and 2002 may have padded the pockets of the very rich, but they failed to create jobs. More of the same medicine in the form of his 2003 tax cut will not put people back to work," Sweeney said.

For Goodwill Industries International head George W. Kessinger, a key factor in the unemployment issue is job training. Goodwill Industries is a network of 207 independent, community-based organizations that provide job training and career services.

"We must adequately fund the federal systems designed to help laid-off workers get back into the workforce. We must prepare our workers to meet the demands of our businesses, and provide people with sufficient training opportunities to help them get a good job and support their families," Kessinger said.

The Goodwill head called for bolstering the U.S. economic recovery "by providing meaningful increases to job training programs, which are in jeopardy as Congress struggles with a ballooning deficit."

He added that in recent years, workforce development programs have been consistently under-funded, despite rising unemployment and the increasing need for skills training.

"Since fiscal year 2002, Workforce Investment Act (WIA) adult funds have been cut by five percent and dislocated worker funds by approximately 10 percent," he said.

U.S. Secretary of Labor Elaine Chao said that while the percentage rise in unemployment was "disappointing," the number of jobs lost for May was significantly lower than in previous months.

Putting the focus on the sectors that gained jobs -- vs. the 53,000 positions lost in the manufacturing sector -- Chao said: "What's important is to look at what is going on behind these numbers: 58,000 new jobs in temporary help services, a leading indicator of economic growth, and the largest increase in these numbers since October 1999."

Praising the administration's recently passed "Jobs and Growth Act of 2003" tax cut package, the Labor Secretary added that the economic package "will spur faster economic growth and job creation."

Chao added that "the Jobs and Growth Act will put more money back in the pockets of America's working families, seniors and small business owners as soon as next month, stimulating the economy and helping to create new jobs."

Edward Leamer, a professor of global economics and management at UCLA and the school's executive director for its regularly published economic report, the Anderson Forecast, wrote in June's report: "The manufacturing sector bears the brunt of our current problems, with 2.5 million jobs already gone, with no let-up yet in job losses."

According to Leamer, "Those who are planning fiscal or monetary stimuli intended to heal the economy should start by explaining how their proposals will help recover 370 thousand jobs lost in (the) manufacturing of industrial machinery and equipment, and 355 thousand jobs lost in electronics manufacturing, and 270 thousand jobs in transportation equipment manufacturing, and so on."

Leamer added of the recent Bush administration's tax-cut economic package, "Pumping steroids into the diets of overspent consumers isn't the right long-term medicine."

For Diane Squire, a marketing director at Indiana University's School Of Library And Information Science, any economic recovery seems far off at the moment.

"Well, I just received my 30-day layoff notice last week, so I'm not convinced," she said.

"All this touting of recovery is just smoke and mirrors," Squire added

(Workforce is a bi-weekly labor and workplace column that highlights issues of key importance to American workers of all occupations. Send comments to:

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