The news is bad: Only 18,000 new hires in June, an overall unemployment rise to 9.2 percent. And this number stands out:
Employment in government continued to trend down over the month (-39,000). Federal employment declined by 14,000 in June. Employment in both state government and local government continued to trend down over the month and has been falling since the second half of 2008.
This week marked the sixth month of Republican control in the House of Representatives; the frontloaded spending from the stimulus bill is mostly out the door now. So far, 2011 has been a year of spending cuts at the national level, in state budgets, in counties and cities. It’s a good time to recall what Mark Zandi said about the possible effect of spending cuts this year. Up for discussion at the time: The package of cuts Republicans wanted in order to fund the government through September.
Zandi, an architect of the 2009 stimulus package who has advised both political parties, predicts that the GOP package would reduce economic growth by 0.5 percentage points this year, and by 0.2 percentage points in 2012, resulting in 700,000 fewer jobs by the end of next year.
Two facts here.
- The stimulus propped up employment, though not by nearly enough for most people to feel it.
- Austerity policies, which are reactive to fears of inflation – which really isn’t a problem right now – place downward pressure on employment.
Let’s be fair: The White House is going along with all of this, and spending cuts are not the sum total of Republican plans. Here’s what Eric Cantor said after the report.
We have offered a robust jobs plan that will spur growth in the private sector by making our tax code more competitive, removing harmful regulations, passing free trade agreements, and streamlining the patent system.
Most of that would help! It makes more sense than what I heard Michele Bachmann say on CNBC at the same time, asked about the effect spending cuts would have on the economy.
We would see a reduction in government jobs, but we would see a rise in private sector jobs.
But we’ve been seeing the former and not the latter.
