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Bad Jobs Numbers

Well, the White House surely did not need a bad jobs report for June, but that is what it got. Only 18,000 new jobs were added. The unemployment rate is at a painful 9.2 percent.

This should, but won't, confirm the fact that cutting taxes does nothing to increase employment. You will recall that last year, President Obama agreed to extend the Bush tax cuts for two years as well as introducing a payroll tax cut. Six months later, where are the jobs?

Companies hire when their business activity requires additional workers. If they don't need more workers, and they get a tax cut, they pocket the difference. Additionally, there is nothing like economic uncertainty to make companies scared about hiring new workers, and there is nothing that is contributing to uncertainty today more than the GOP intransigence on the budget negotiations and their failure to raise the debt ceiling.

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Sadly, there is almost nothing the government can do right now to improve the employment picture. The Republicans will never sign on to any plan that mandates increased government hiring. As the much-maligned Stimulus Package spending comes to an end, demand is shrunk and the pressure on state government budgets is a further drag on the economy. There are some good answers, just none that would pass Congress.

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July 18-31, 2014

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