The Obama administration favors extending unemployment benefits from the normal 26 weeks to an “emergency” level of 73 weeks maximum. You might wonder if that makes sense right now. After all, some bloggers are claiming that we no longer have a demand shortfall. Ah, but you aren’t looking at the “big picture.” Let Joe Biden explain why we need emergency level extended unemployment benefits right now:
Let’s step back and consider the big picture. When we took office, our country was in the throes of the worst recession since the Great Depression. Millions of people were losing their jobs, homes, and retirement savings. Many middle-class Americans who had worked hard all their lives feared they would never recover.
To reverse the spiral, we enacted the Recovery Act, made historic investments in clean energy and infrastructure, unlocked critical lending to small businesses, and cut taxes for average American families. We rescued the iconic American auto industry, which has created over 460,000 jobs since 2009. We cut our deficit by more than half as a share of the economy, the most rapid reduction since the end of World War II. We enacted Wall Street reforms to prevent another crash on Main Street and provided millions of Americans access to affordable and secure health insurance.
Thanks to your strong leadership, and because of the grit and determination of the American people, we are growing again, and our competitive edge is sharper than ever. Businesses are hiring at historic rates, with 52 consecutive months of net private sector job growth. Manufacturing is back, with 668,000 new jobs in the past 52 months. Exports have increased to record-breaking levels for four straight years, reaching $2.3 trillion in 2013. We have the world’s most skilled and productive workers, the strongest intellectual property laws, the most affordable and reliable energy supply, and the finest research institutions.
The world has taken notice. According to A.T. Kearney’s annual survey of global business leaders, in 2013 the United States overtook China, India, and Brazil to be the world’s single most attractive location for foreign investment, for the first time since 2001. In 2014, the United States was again named number one, this time by the widest margin ever recorded. In every sector, from heavy industry to advanced manufacturing to energy to information services, America is rated the best.
But as the United States becomes an ever-more attractive place to invest and expand operations, how will employers find the skilled workers they need to compete?
Yes indeed, how will they find those workers?
Wait a minute. I apologize. I provided the wrong quotation. I was trying to link to the article explaining why we needed emergency extended unemployment benefits, and I actually linked to the article explaining why 6 years into his administration Obama’s jobs policies should be viewed as a smashing success. My mistake.
PS. Today’s announcement of 284,000 new unemployment claims is a shockingly low number. As a share of the population it is the lowest figure since the 1960s. The 4 week moving average (302,000) is roughly tied with April 2000 for the lowest figure in 45 years. Next week’s figures could easily push the average below the April 2000 low.
So we have three data points:
1. Employment/population ratio is horrible.
2. Unemployment rate is mediocre.
3. New claims figures are great.
I believe the unemployment rate (6.1%) is the most informative. There is still some slack, but far less than in 2009. Unemployment has been falling at a very steady 0.1% per month for a year and a half. That will continue. Meanwhile, productivity numbers are horrible and likely to stay that way. As I’ve been saying, get used to 3% NGDP growth as the new normal, 1.2% real and 1.8% deflator. That means lower than normal interest rates as far as the eye can see.