Economics, U.S. Economy

A disappointing jobs report

Image Credit: shutterstock

Image Credit: shutterstock

Today’s employment report is very disappointing.  Nonfarm payroll gains came in below expectations – payrolls grew by 169,000 jobs in August.  Worse still, revisions for June and July lowered gains for those months by a combined 74,000 jobs.  The three-month moving average of employment gains now stands at 148,000 new jobs per month.  At that rate, the Hamilton Project at the Brookings Institution’s jobs gap calculator reports that the jobs gap won’t close until after 2025.  That’s over twelve years from now.

The labor force participation rate fell to its lowest level since the late 1970s.  The rate of employment also fell.  While a drop in the unemployment rate – as happened this month; it’s down to a still-awful 7.3% – is usually good news, a labor force that shrinks in size along with a drop in the number of employed workers is nothing to celebrate.

The three-month moving average of payroll gains – a good measure because it smooths out noise from any one report – has been trending down since the start of the year.  This is doubly bad, because we’re probably in for a rough fall.  Congress and the president will most likely tangle over the debt ceiling and financing the government, injecting policy uncertainty into the economy and creating yet another headwind against an already-too-fragile recovery.  The Fed may “taper”.  A military conflict in Syria may increase gas prices.  The president’s mismanaging of the race for Fed chair means we still don’t know who will replace Chairman Bernanke.

It’s important not to get lost in the statistics and politics, and to remember why all this matters.  Our badly damaged labor market is an economic crisis, yes, but it is first and foremast a moral, spiritual, human crisis.

Work is deeply important to the flourishing life.  I wrote in National Review this weekend on the importance of work:

Work does set us free — it emancipates us from our passions by occupying our time. It frees us from among the worst torments of modern (and comfortable) life: boredom. Work frees us by giving us the opportunity to do what we ought.

Work educates the passions by directing them to productive ends. Work gives us a sense of identity; much of who we are — for Americans, probably too much — is defined by what we do. Work gives us a sense of purpose. Work gives us the ability to meet among the most primal needs: providing for our children and caring for those whom we love.

Those who can’t find a job are deprived of all this. In this sense, our badly damaged labor market is not just an economic crisis, but a moral one. How can a young person build a life, find a spouse, and make a home without a job? The probability of suicide goes up when a worker is unemployed. Divorce rates are higher when the unemployment rate increases. The children of unemployed workers tend to have relatively worse labor-market outcomes. Unemployment is associated with a range of psychological problems. The loss of a job often means a loss of self, of identity, of purpose, of the ability to provide for yourself and your family, to contribute to society.

Read the whole essay here.

Work is more than a way to satisfy material needs.  Think about it.  And think about what society – including government – owes those who are left behind by an economic crisis.

Michael R. Strain is a resident scholar at the American Enterprise Institute.  Follow him on Twitter at https://twitter.com/michaelrstrain.

 

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