The US added 165,000 jobs in April, according to the Bureau of Labor Statistics. This was followed by upwardly revised gains of 332,000 in February and 138,000 in March. The three-month average pace of job gains of 211,000 was slightly above the average pace of 173,000 jobs over the last twelve months. The unemployment rate slid down a little to 7.5 percent. Here’s what the news reports won’t necessarily tell you.
The unemployment rate has now dropped 0.6 percentage point since April, 2012, but much of this is because of declining rates of labor-market participation rather than increases in employment. Worse yet, dropping so little makes this the worse job creation economic expansion probably in the history of the US, including during the Great Depression.
There are two factors at hand that make this so. The corporate media doesn’t like to report either, but sometimes they report that US government austerity is sinking America’s economic ship.
“While the Federal Reserve warned that “‘fiscal policy is restraining economic growth,’” the Republican National Committee released an ad crowing that “‘the sequester is here to stay.’” In other words, by sabotaging the US economy, the Republicans hope to reclaim the presidency and maybe even the senate.
So the public sector, especially, has been a drag on the economy in recent months. While the private sector has added roughly 2.2 million jobs over the past year, employment in state, local, and federal governments has declined by 89,000, including significant losses to teachers and emergency responders. In this challenging economic climate, there is growing concern about how sequestration—the across-the-board budget cuts to discretionary spending that took effect on March 1—may negatively impact the recovery even more. Indeed, forecasters at the Congressional Budget Office project that the sequestration could reduce overall GDP growth in the United States by 0.6 percentage point and cost the economy 750,000 jobs by the end of 2013.
Now here’s the part the press doesn’t want you to know. The redistribution of income and wealth over the last thirty-three years from the 99 to the 1 percent has played a much greater role in why the US economy sucks big time for working people. One percent of the population now takes in over 30 percent of the total income produced in the US, compared to 8 percent back then. That leaves less and less money for the rest of us to demand goods and services. That’s why the economy is so weak. The rich are sucking us dryer and dryer. Worse yet, they buy things like stocks, bonds and derivatives, rather than goods and services. So they don’t help the economy at all. In fact, the purchases of the rich suck us dry, but that’s another story.
Austerity, in other words, isn’t the primary culprit in why the American economy is so historically weak, although it plays a role. It’s almost all about income redistribution.
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