The Labor Department has published its jobs report for May:
- Employers added a pathetic 69,000 jobs. It takes at least 125,000 new jobs every month to keep up with the growth in the working age population, and employers still have not replaced the five million jobs that were lost in 2008 and 2009.
- The reports for March and April were revised downward, reducing the number of jobs created during those two months by 60,000.
- If the 2012 average monthly growth rate continues it will take thirty more months to replace the jobs that were lost in 2008 and 2009. But even that milestone will still leave America short 11 million jobs that should have been added to keep up with population growth.
- The unemployment rate ticked up from 8.1% to 8.2%.
Obviously, the current cycle dramatically under performs. The chart doesn’t show them, but from 1947 to 1981 there were four recession/recovery cycles with job losses. In each case all lost jobs were replaced within two years. We’re in the fifth year of this cycle and still 5 million jobs short of the previous peak, January 2008.
Reaction from the White House? President Obama was on his way out to do six fundraisers in one day.
If the President and his supporters were willing to learn from history they would reverse course and adopt the strategies of the Reagan Administration (the red line in the chart.) Reagan’s successful strategies were tax code simplification coupled with reductions in income tax bracket rates and deregulation.