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As American job-seekers burn, Washington just fiddles

Job MarketJobs and WorkplaceJob Fairs and Hiring EventsPoliticsUnemployment and LayoffsBusinessU.S. Congress

The disappointing January jobs report -- only 113,000 positions added, compared to 194,000 per month on average last year -- has generated much hand-wringing by policymakers, pundits and economists. Januaries are typically slow months for job growth, as employers shed a bunch of temporary workers hired for the holidays, yet last month's total still came in well short of analysts' expectations.

And given that December's jobs report was even worse than January's, with a net gain of only 75,000 jobs (revised upward from the original 74,000), there's a growing worry that the economy is stalling again.

It's too early to jump to that conclusion. There are, however, some broad trends in the jobs data that are troubling, most notably the fact that the number of people in the workforce is shrinking. That reduction is caused in part by longtime unemployed Americans who become so discouraged that they give up trying to work. But according to Austin Nichols at the left-of-center Urban Institute, two-thirds of the decline is caused by "the graying of America" -- that is, the baby boom generation reaching retirement age. That's a double whammy: Not only are there fewer workers contributing to the economy (and paying taxes), there are more people collecting benefits from Uncle Sam.

So what do Congress and the White House have to offer? There's no shortage of proposals aimed at creating jobs, but those aren't the dominant topics in Washington. Instead, both parties in Congress and the Obama administration seem fixated on issues that will do little or nothing to reduce unemployment. In fact, they're heading in the wrong direction.

House Republicans at the moment are tied up in knots trying to decide what ransom to demand in exchange for raising the debt limit. Various ideas -- repealing all or part of the 2010 healthcare law, approving the Keystone XL pipeline, abandoning the cost-cutting changes to military pensions that Congress approved in December's budget deal -- have been floated and rejected, at least for now.

The optics are bad for the GOP in at least two ways.

First, failing to raise the debt limit in time to meet all of the government's obligations would cause chaos on Wall Street, inflicting more damage to the economy. Just the prospect that a quarrelsome Congress wouldn't raise the debt ceiling in time led Standard & Poor's to downgrade the U.S. credit rating, causing a dip in the GDP in 2011.

Second, depending on what it ultimately demands, the House GOP risks seeming petty and tunnel-visioned. The last thing the GOP wants is for voters to say, "You're putting the economy at risk over that?!?" Yet some of the ideas being floated are so small-bore, they hardly seem worthy of the stakes.

Meanwhile, Democrats and the White House can't seem to move off of two issues: renewing the federal unemployment benefits for those who've run through their state aid, and raising the federal minimum wage.

Whatever you think of the merits of those proposals -- The Times' editorial board has argued repeatedly in favor of the extended unemployment benefits -- they won't lower the unemployment rate. In fact, there's a risk that raising the minimum wage will lead to fewer entry-level jobs, particularly for younger and less experienced workers.

Republicans and Democrats obviously have sharply different ideas about how to create jobs. Both sides agree, however, that the best way to do it is to pump up economic growth. There are ambitious, bipartisan proposals out there to do just that, such as rewriting the tax code to broaden the base and lower rates, and fixing the country's broken immigration laws. There are modest plans too that have drawn support from both parties, such as overhauling job training programs and speeding up infrastructure projects.

A savvier bunch on Capitol Hill would be trumpeting those ideas, or other ways to put more people back to work now. Instead, Washington seems incapable of focusing on the one problem the public really wants its leaders to solve.


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Follow Jon Healey on Twitter @jcahealey and Google+

Copyright © 2014, Los Angeles Times
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