[Joint House and Senate Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
S. Hrg. 111-421
THE EMPLOYMENT SITUATION: NOVEMBER 2009
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HEARING
before the
JOINT ECONOMIC COMMITTEE
CONGRESS OF THE UNITED STATES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
DECEMBER 4, 2009
__________
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JOINT ECONOMIC COMMITTEE
[Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]
HOUSE OF REPRESENTATIVES SENATE
Carolyn B. Maloney, New York, Chair Charles E. Schumer, New York, Vice
Maurice D. Hinchey, New York Chairman
Baron P. Hill, Indiana Jeff Bingaman, New Mexico
Loretta Sanchez, California Amy Klobuchar, Minnesota
Elijah E. Cummings, Maryland Robert P. Casey, Jr., Pennsylvania
Vic Snyder, Arkansas Jim Webb, Virginia
Kevin Brady, Texas Mark R. Warner, Virginia
Ron Paul, Texas Sam Brownback, Kansas, Ranking
Michael C. Burgess, M.D., Texas Minority
John Campbell, California Jim DeMint, South Carolina
James E. Risch, Idaho
Robert F. Bennett, Utah
Gail Cohen, Acting Executive Director
Jeff Schlagenhauf, Minority Staff Director
C O N T E N T S
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Members
Hon. Carolyn B. Maloney, Chair, a U.S. Representative from New
York........................................................... 1
Hon. Sam Brownback, Ranking Minority, a U.S. Senator from Kansas. 3
Hon. Elijah E. Cummings, a U.S. Representative from Maryland..... 4
Hon. Kevin Brady, a U.S. Representative from Texas............... 5
Hon. Amy Klobuchar, a U.S. Senator from Minnesota................ 6
Hon. Michael C. Burgess, M.D., A U.S. Representative from Texas.. 8
Witnesses
Dr. Keith Hall, Commissioner, Bureau of Labor Statistics,
Washington, DC; accompanied by: Dr. Michael Horrigan,
Commissioner for Prices and Living Conditions, Bureau of Labor
Statistics; and Mr. Philip Rones, Deputy Commissioner, Bureau
of Labor Statistics............................................ 10
Submissions for the Record
Prepared statement of Representative Carolyn B. Maloney, Chair... 24
Prepared statement of Representative Kevin Brady................. 25
Prepared Statement of Dr. Keith Hall, Commissioner, Bureau of
Labor Statistics, together with Press Release No. 09-1479...... 26
Chart titled ``Monthly Change in Nonfarm Payrolls''.............. 57
THE EMPLOYMENT SITUATION: NOVEMBER 2009
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FRIDAY, DECEMBER 4, 2009
Congress of the United States,
Joint Economic Committee,
Washington, DC.
The committee met, pursuant to call, at 9:37 a.m., in Room
216 of the Hart Senate Office Building, The Honorable Carolyn
B. Maloney (Chair) presiding.
Representatives present: Maloney, Cummings, Brady, and
Burgess.
Senators present: Klobuchar and Brownback.
Staff present: Gail Cohen, Colleen Healy, Elisabeth Jacobs,
Andrew Wilson, Lydia Mashburn, Jeff Schlagenhauf, and Ted Boll.
OPENING STATEMENT OF THE HONORABLE CAROLYN B. MALONEY, CHAIR, A
U.S. REPRESENTATIVE FROM NEW YORK
Chair Maloney. The meeting will come to order.
The Chair recognizes herself for an opening statement, and
then later each Member will have five minutes for their opening
statements.
For the first time since the recession began two years ago,
the labor market has stabilized. Employment remained steady in
November, and the unemployment rate ticked down to 10 percent.
The current Administration took office less than 11 months
ago. The economy was in the midst of the worst crisis since the
Great Depression. In fact, the Council of Economic Advisers
Chair, Christina Roemer, testified before this Committee that
the shocks we endured in this great recession were actually
worse than those in the Great Depression.
Less than a year ago, job losses were growing more and more
severe. Last November, the economy shed 600,000 jobs. Losses
increased until January when they hit a post-Great Depression
record of 741,000 jobs lost, the last month that former
President Bush was in office.
But we turned a corner. Job losses have steadily fallen for
the past six months, and today we have learned that the labor
market remained stable in November. The trend is heading in the
right direction.
There is no escaping the cruel math of recoveries. The
recovery of the job market lags behind the recovery of the
broader economy. Businesses must have more customers before
they add more employees.
However, thanks to the Recovery Act we are now seeing signs
of growth. The nonpartisan Congressional Budget Office
estimates that at least 600,000 additional workers were
employed in the third quarter of 2009 because of the stimulus.
We are on track to create or save at least 3.5 million jobs
over the life of the Recovery Act. Average weekly hours are
climbing, with indications that the manufacturing sector is
driving that upward trend.
Average hourly earnings are up, too, and job creation in
the temporary help sector is a leading indicator of progress in
the labor market.
Since July, temporary help services has added 117,000 jobs,
86,000 in November alone. Although the labor market appears to
be stabilizing, too many Americans remain out of work. More
than 15 million workers are unemployed.
At the Joint Economic Committee we estimate that well over
4 million Americans have seen their employment-sponsored health
insurance coverage evaporate because of job loss.
In the longer term, the passage of comprehensive health
insurance reform will help assure that a lost job no longer
means lost access to affordable, quality health care.
In the meantime, we must ensure that a jobs' crisis does
not turn into a health care crisis for more families. The COBRA
benefit program allows laid-off employees to remain insured by
purchasing continuing coverage from their employer's health
insurance plan.
Many out-of-work families were able to purchase affordable
health insurance coverage, thanks to temporary COBRA premium
support included in the Recovery Act. But that support expired
this week, and many unemployed families will see their premiums
skyrocket. Congress should now extend COBRA support to help
struggling families.
Today's jobs report makes it clear we are making progress,
but the road to recovery will be long and it will not be easy.
While we have brought the economy back from the brink, we are
not yet where we need to be in terms of jobs creation.
The mission is to create high-quality, private-sector jobs.
Yesterday, President Obama convened a jobs summit where small
and medium sized businesses, major employers, academics, and
working men and women in labor brainstormed ideas for putting
Americans back to work.
In the last year, Congress has enacted policies that
support struggling families and encourage jobs creation. The
$700 billion Recovery Act included a tax cut for 95 percent of
American families and created jobs, while investing in clean
energy, infrastructure, and education.
Just last month we extended the $8000 first-time home
buyer's credit that will help spur construction jobs. We
extended a host of safety net programs that will help
struggling families weather this economic storm.
We extended the net operating loss carryback provision that
will help small businesses hire new employees, and we are
boosting funding for small business loans via the Small
Business Administration.
Congress is continuing to work on new policies that will
jump start job creation. Putting unemployed Americans to work
rebuilding our Nation's crumbling infrastructure is an
investment in our future.
Other potential policies include targeted tax credits for
job creation, and additional investments in education, health
care, and energy independence.
In the coming months, the Joint Economic Committee will be
holding a series of hearings about job creation ideas from some
of America's best and brightest.
I encourage you all to attend next Thursday's hearing with
Nobel Prize-winning economist Joseph Stiglitz who will be
kicking off a series on job creation ideas.
I thank the panelists for being here, and I recognize my
colleague and good friend and Ranking Member Senator Brownback.
[The prepared statement of Representative Maloney appears
in the Submissions for the Record on page 24.]
OPENING STATEMENT OF THE HONORABLE SAM BROWNBACK, RANKING
MINORITY, A U.S. SENATOR FROM KANSAS
Senator Brownback. Thanks, Chair Maloney. I appreciate it,
and I appreciate the hearing here today.
Commissioner Hall, good to see you again. Good to see these
numbers improving. While they are not building yet, they are
not falling as fast, and so that is generally one of the signs
we look for in a recovery is that the trend line, though in a
fall, stops going quite as fast. So I am glad to see that, and
glad to see temporary help services rise, which is usually
another significant feature that we look at.
I have several, though, strong concerns about this. It
seems to me most of this is probably built on monetary policy
not fiscal policy; that it is the Fed flooding the market with
money that is doing this, creating what I fear could be, if we
do not handle it right, a government bubble that follows the
housing bubble that follows the dot com bubble taking place
here; and that what we are seeing is a government bubble
happening.
These bubbles, it seems like they develop quicker and with
more frequency, and with more problems each cycle as they go
and they come around. That is one of the big concerns I have is
that, and monetary policy.
I do not think the fiscal policy situation is helping much
at all, and I think it long term is a significant detriment to
us because of the huge debt and deficits that are being run.
The other thing that is very problematic to me in what is
taking place now is the talk about raising of taxes and
centralizing more and more things--whether those taxes be in
the health insurance field, whether these taxes be on cutting
the Bush tax cuts and putting more taxes into place; what the
message is that small business is getting around this country
is: Look out, your taxes are going up.
The thing that put the Japanese--one of the things that put
them into their lost decade was this raising of taxes at the
time they were just starting to come out of their deep
recession and deflationary situation.
So what you have got for us is this coming out, probably,
hopefully, in the unemployment situation. And then right as you
come back up to the line you say, okay, now we are going to
raise your taxes? To where then people that would employ, or
would hire people are saying, well, I am not going to do that
until that situation is stabilized. And you drive yourself back
down into it. And your recovery is primarily built on monetary
policy in the first place which has probably run its string
here in the Fed in the next six to nine months is probably
going to start raising rates and pulling back on some of the
monetary policy.
So I think we are in a very precarious spot. I would really
hope that the Administration would stop the discussion on
raising taxes, whether it is through cap and trade, or health
care, or not extending the Bush tax cuts, and start talking
about what it is that we can do to stimulate the overall
economic environment and not through spending but for having a
better environment for small business to grow and prosper.
Because otherwise, I think we really do risk ourselves of
going into a--going down again in a very problematic situation
with having a lot fewer tools at our disposal to be able to
use.
Commissioner Hall, I look forward to hearing your specifics
on this testimony today. It is my hope in the Senate we do not
pass the raising of taxes on health care and cutting of
Medicare. I think it would really send a bad signal at this
point in time. I think it would be harmful, very harmful, to
our overall economy. It is my hope that it will not happen in
this body, and we are in session today and are going to be
discussing that very thing.
Thanks, Chair.
Chair Maloney. Thank you very much.
Congressman Cummings.
OPENING STATEMENT OF THE HONORABLE ELIJAH E. CUMMINGS, A U.S.
REPRESENTATIVE FROM MARYLAND
Representative Cummings. Thank you very much, Madam Chair.
I want to thank you so much for holding this hearing again.
It is certainly good to see you, Commissioner Hall.
The report we received this morning is a clear indicator
that the economy is slowly returning to growth. Today's jobs
report shows employers cut 11,000 jobs in November, the
smallest decline since the recession began. And despite the
fact that there were over 7 million jobs lost in the current
recession and a 10 percent unemployment rate, job losses have
moderated since last month's report.
While the economic situation is not ideal, we know we are
seeing signs of a recovery. According to the Bureau of Economic
Analysis, GDP rose at an annualized pace of 3.5 percent in the
third quarter versus 2.3 percent in the second quarter.
And of course for most Americans, jobs are the key to a
successful recovery and they have not been quick in coming.
Americans want jobs that will put food on their tables, help
send their children to college, and allow them to keep their
homes warm at night.
To support these efforts, President Obama held a forum
yesterday to discuss the methods of creating jobs and expanding
the economy.
I just want to refer, Madam Chair, to the editorial in The
New York Times dated December 3rd. Of course this was before
the summit. But one of the things that they say in there, in
that Times editorial which I agree with, they said:
``Mr. Obama must make the case that the immediate need for
more federal help trumps the longer term need for deficit
reduction. Otherwise, the economy is in for a self-reinforcing
stretch of joblessness that would cost more in the end than
additional spending today. Mr. Obama should detail separate
plans for taming the deficit, including ironclad commitments to
pay for health care reform. What he must not do is continue to
conflate the need for job creation with the need for deficit
reduction, to the detriment of jobs.
``Once job creation has the priority status it deserves,
the next step is to build on proven programs and add new ones
to address the scale and nature of joblessness.'' End of quote.
To support the efforts of President Obama, I think we need
to take a look at some things that would be extremely helpful.
Plans within that agenda must address reducing our deficit,
while simultaneously building programs. For example, passage of
the Transportation Bill, and the Clean Water bill necessary to
provide funding for job creation.
That is something we can do immediately. Unemployment is at
record levels nationwide, but the impact on the African
American community is especially devastating with the last
unemployment rate of 15.6 percent.
According to a recent New York Times article, race remains
a serious obstacle in the job market for African Americans,
even for those with degrees from respected colleges.
The unemployment rate for Black male college graduates 25
years and older is 8.4 percent, compared with 4.4 percent for
White male college graduates.
I am encouraged by the efforts of President Obama and the
Democratic Congressional Leadership in working toward a jobs
package prior to adjournment. However, we must ensure that the
entire Nation is brought along into his recovery.
To that end, a comprehensive jobs package must include the
creation of public service jobs improving our Nation's schools
and infrastructure, and strengthening small, disadvantaged
businesses.
We must do all that we can to protect and defend our
individual constituent, as well as small businesses and
institutions that employ them.
So as we await Commissioner Hall's testimony on the
November employment statistics, I would like to close with the
acknowledgement that, despite the progress we have made so far,
we know we have a long way to go.
With that, Madam Chair, I yield back.
Chair Maloney. Thank you very much.
Mr. Brady.
OPENING STATEMENT OF THE HONORABLE KEVIN BRADY, A U.S.
REPRESENTATIVE FROM TEXAS
Representative Brady. Thank you, Madam Chairman.
Welcome, Commissioner Hall. Well the number of jobs lost is
better than expected, which is good news. But we cannot
celebrate a 10 percent unemployment rate, especially when the
long-term unemployment rate continues to grow in very troubling
numbers.
Our economy continues to bounce along the bottom. Retail
was up slightly. Temporary jobs were up slightly, and health
care of course continues to add jobs.
But key sectors--manufacturing, construction, and this
month information technology, telecommunications--shed jobs,
which I will be asking you about, Commissioner Hall, as well
because on the telecom side that surprised me a bit.
I was pleased to see the President host a jobs summit. I
still think there is a disconnect. As I listen to proposals for
more government spending, another $300 billion stimulus II, the
truth is the greatest hurdle to our recovery continues to be
businesses' reluctant to add new workers with Washington
contemplating higher health care costs, energy costs, more
regulation, and new taxes.
Congress and this White House are frightening the horses.
It needs to stop, because it is the private sector, not the
government, that will move America into a sound economic
recovery.
As long, again, as Washington is saying grow jobs, jobs,
jobs, and pushing on the peddle, but because of taking their
eye off the ball on jobs and promoting issues that in fact
frighten businesses and making them less likely to add jobs, we
are putting brakes on them.
So again, the sooner I think Washington gets a handle on
its debt which scares consumers, stops promoting higher taxes
which scares businesses, and starts looking at real incentives
for business investment, only then will the private sector be
able to lead us into a sound economic recovery.
With that, I yield back.
[The prepared statement of Representative Kevin Brady
appears in the Submissions for the Record on page 25.]
Chair Maloney. Senator Klobuchar.
OPENING STATEMENT OF THE HONORABLE AMY KLOBUCHAR, A U.S.
SENATOR FROM MINNESOTA
Senator Klobuchar. Thank you very much, Madam Chair.
Greetings, Commissioner Hall. It is good to be here again.
I want to, first of all, focus on this unemployment number.
It is clearly some improvement, and it is a step in the right
direction, but I still believe that Americans of all stripes,
especially the middle class, continue to struggle in some of
the toughest economic times that we have seen since the Great
Depression.
I always like to remind people at these hearings of what
people in our State are saying. Here is a letter we just
received the other day from a woman named Diane in Minneapolis.
She said:
I have been unemployed for more than a year, and all my
unemployment benefits have expired. I have a masters degree, 25
years of experience, and as of today I have submitted more than
288 applications for jobs, made countless telephone calls, did
all the appropriate networking, and went to every job fair that
came to town, and I cannot get a job. Any influence you can
bring will be greatly appreciated by me and the millions of
people like me.
While parts of our economy are clearly stabilizing with the
Dow Jones over 10,000 again, it is clear that other parts of
the economy are still struggling. We need to make sure that all
Americans, not just the folks who happen to work on Wall
Street, feel that we are digging ourselves out of the hole.
And I am glad that the President held his job summit
yesterday, and I'm hopeful that, as we go ahead, there is going
to be a new-found focus on small businesses.
The number is quite staggering. Over the past 15 years,
small businesses created 64 percent of net new jobs,
nationally, and that's why I'm very interested.
A group of Senators, including Senator Mark Warner, has
suggested that a portion of the TARP money that has come back,
that has gone to mega-businesses, be devoted to getting the
credit market flowing in small businesses again.
Freeing up this flow of credit, so that our banks can start
lending to small businesses, will make a big difference.
According to a Treasury Department report released in mid-
November, the 22 banks that have received the most funding
through TARP have cut their collective small business loan
balances by $10.5 billion over the past six months, although I
should note that of the top ten banks that are the biggest
small business lenders, US Bancorps, a Minnesota-based bank,
was one of two banks that has actually increased its small
business lending since April of this year, so that there are
definitely some banks out there that are doing their part.
However, at a time when Wall Street, after emerging from
its struggles on the backs of taxpayers, is set to pay
outrageous bonuses again, while unemployment remains
uncomfortably high for too many Americans, like the woman,
Diane, the letter I just read, I am forced to ask the question,
when is enough, enough, and how do we make sure that this money
gets out there to continue to generate jobs?
Part of it is the extension of unemployment that this
Congress recently authorized, so that we have that safety net
in place, the healthcare reform we're doing, but the other part
of it is looking long-term.
To me, this means a bigger focus on making things and
reducing our debt, and less of a focus on this consumption
economy and some of the spending that has gotten us to where we
are.
So, I believe, if you look at the long-term, the small
business job generation has got to be a piece of this. It means
not just some short-term help with credit, but it also means
looking at the export market.
Ninety-five percent of the customers right now, for small-
and medium-sized businesses, are outside of our borders. Thirty
percent of small businesses say that they would like to export,
but they simply don't have the means to do it; they don't have
the department like you'd have at good corporations like we
have in Minnesota, like Cargill or 3M, that can have their own
internal people help them figure out where their new products
can be marketed across the world.
The Commerce Department, the Foreign Commercial Service,
does a very good job. We need to get that out there, we need to
make sure they have the resources, and really set up a business
match dot-com, so that these small- and medium-sized
businesses, at a time when the Dollar is weak, and so that
there is a great possibility for them to enter these markets,
can really build their export market, as well.
I don't think this is pie in the sky, if you look at the
numbers and how much businesses are helped by just even a one-
or two-percent increase in exports, and you look at what some
of the countries have done in Europe to promote exports. Fifty-
eight percent of our exports from our country, are either to
Canada or Mexico.
So, as we look at these unemployment numbers and the good
work of Commissioner Hall, I think we need to think forward, to
not just be short-term policies that we've worked on with the
stimulus and the extension, but some of the long-term thinking
of how we better position our country, so that we are in the
driver's seat again and determining our own destiny in this
international economy. Thank you very much, Madam Chair.
Chair Maloney. Thank you very much. Congressman Burgess.
OPENING STATEMENT OF THE HONORABLE MICHAEL C. BURGESS, M.D., A
U.S. REPRESENTATIVE FROM TEXAS
Representative Burgess. Thank you, Madam Chair. Along with
the rest of the Committee, this was actually the first month
since February, when I joined the Committee, that we've had a
number that wasn't higher than the month before.
In fact, there was one economist back home in my District,
who pointed out the fact that ever since I had joined the
Committee, the unemployment figures went up every month, and
perhaps I should consider another Committee assignment.
So I'm grateful that the number has gone down today. I
don't know that it's cause for a great deal of celebration
because we've all heard the talk about the green shoots in the
economy in the past, and other folks talk about how it's hard
to tell between green shoots and the wild weeds that are
growing up through the cracks of the parking lot that no longer
contain cars.
Last month's number was troubling, this month's number is
also troubling. We are very close to a post-Great Depression
high of 10.8 percent, and the percentages, the numbers, don't
tell the complete story.
Ten percent unemployment means that one out of five
Americans is unemployed, underemployed, or just plain given up
and out of work. Ten percent means that one out of nine
families can't make the minimum payments on their credit cards.
Ten percent means that one out of eight mortgages are in
default or foreclosure. Ten percent means that one out of eight
Americans is on Food Stamps and more than 120,000 families are
filing for bankruptcy every month.
Furthermore, the economic crisis has wiped out more than $5
trillion in wealth from pensions and savings. This is what's
facing our middle class.
You know, we've had Elizabeth Warren before this Committee
before. I don't frequently agree with her, but yesterday she
wrote an article entitled ``America Without a Middle Class,''
and some of her language was very forceful.
Although I disagreed with her conclusions at the end, she
stated, and I'm quoting here, ``When various forms of this
creative banking triggered the economic crisis, the banks went
to Washington for a handout, and all the while top executives
kept their jobs and retained their bonuses even though the tax
dollars that supported the bailout came largely from the middle
class, from people already working hard to make ends meet. The
beneficiaries of those tax dollars are now lobbying Congress to
preserve the rules that had let those huge banks feast off the
middle class'' end quote.
She was also right when she said, continuing to quote,
``Pundits talk about populist rage, as a way to trivialize the
anger and fear coursing through the middle class, but they have
it wrong. Families understand with crystalline clarity, that
the rules that they have played by, are not the same rules that
govern Wall Street,'' close quote.
So, when we focus on an unemployment rate or maybe we'll
get the actual U-6 number, the true unemployment rate, later on
this morning, it's hard to think that Congress would willingly
do anything more to help the rich or can conceive of enough to
really help the poor.
But it is the middle, the large swath with the backbone of
our society, who are now seeing that if they work hard, they
save, they fight to educate their children, become the same
stewards of their families and their communities, that the
Federal Government will not be there to help them, or, more
importantly, the Federal Government shouldn't be hurting them
with omnibus bills and cap-and-trade bills and healthcare
bills, when they need help the most.
And you've got to focus on the next generation. One
perspective of this ten-percent unemployment number is that it
reflects three million young adults, all under the age of 30,
who cannot find a job, kids that have recently graduated from
community college, all the way up to Harvard Law School.
If we cannot teach our next generation on how to be
gainfully employed the moment they finish school, we've
permanently set them back for the rest of their lives.
As Senator Brownback and Congressman Brady have eloquently
described the problems facing small business, I have a steady
stream of people through my office that tell me, well, the
conditions in Texas are perhaps improving a little bit and they
wouldn't consider adding a job--and I'm not talking about
Google or the big insurance companies; I'm talking about a lady
that runs a saddle making business; I'm talking about a guy
that runs an air conditioning compressor remanufacturing
business; I'm talking about a guy that runs a cardiologist's
office; I'm talking about a guy that runs a financial services
office.
They've been hammered, and they're hunkered down. They are
not going to add jobs, because they look up here at Washington
and see Congress tinkering in all of these areas where,
arguably, we don't belong, and there's no way they're going to
add to their payroll.
Well, okay, that's just one job in a small mom-and-pop
financial services or a small cardiology shop, but when you
extrapolate that across the broader economy, I mean, every
politician stands up on a stump sometime and says that small
business is the engine that creates jobs well coupled with
reduced consumer spending, because people, unlike the
government, when they don't have money, they're not anxious to
spend money they don't have, they don't have access to capital,
even though we've put all this money into banks----
We're focusing on Wall Street, and, to some degree, Main
Street, but, really, we should consider what's going on on Oak
Street and Elm Street back home because this is where the job
growth will occur.
You know, one of the crazy things is, we've got a big
highway bill that we all know we need to do, and that's just
sitting there. We did a huge stimulus bill in February, which
didn't produce the results it was supposed to, but we're not
doing the work on the highway bill, which is one of those
things that, arguably, would produce some of those
infrastructure jobs that are so desperately needed.
And, unlike the transportation jobs or the infrastructure
jobs in the stimulus bill, these would be real, long-term
projects. We're kind of coming to the end of whatever shot in
the arm we got with the stimulus, with the small amount of
money that was put into transportation infrastructure.
Chair Maloney. The gentleman's time has expired.
Representative Burgess. Potholes have been filled, and
those people are being let go. Thank you. I'll yield back the
balance of my time.
Chair Maloney. Thank you. I'd now like to introduce
Commissioner Hall. Thank you for being here.
Dr. Keith Hall is the Commissioner of Labor Statistics for
the U.S. Department of Labor. The BLS is an independent
national statistical agency that collects, processes, analyzes,
and disseminates essential statistical data to the American
public.
He also served as Chief Economist for the White House
Council of Economic Advisers.
Thank you for being here and we look forward to your
testimony.
STATEMENT OF DR. KEITH HALL, COMMISSIONER, BUREAU OF LABOR
STATISTICS, WASHINGTON, DC; ACCOMPANIED BY: DR. MICHAEL
HORRIGAN, COMMISSIONER FOR PRICES AND LIVING CONDITIONS, BUREAU
OF LABOR STATISTICS; AND MR. PHILIP RONES, DEPUTY COMMISSIONER,
BUREAU OF LABOR STATISTICS
Commissioner Hall. Thank you. Madam Chair and Members of
the Committee, thank you for the opportunity to discuss the
employment and unemployment data we released this morning.
The unemployment rate edged down to ten percent in
November, and non-farm payroll employment was essentially
unchanged. Additionally, after revision, the estimates of job
loss for September and October were smaller than reported last
month.
In November, job losses occurred in construction,
manufacturing, and information, while employment rose in
temporary help services and healthcare.
Construction employment fell by 27,000 over the month,
compared with an average monthly decline of 63,000 in the prior
six months. In recent months, most of the decline has occurred
in the non-residential components.
In manufacturing, employment fell by 41,000 in November,
about in line with the trend over the prior four months.
There were notable job cuts over the month in machinery,
computer and electronic products, and printing. The factory
work week rose by three-tenths of an hour, and has increased by
one full hour since May.
In November, employment in the information industry
declined by 17,000, with telecommunications accounting for half
of the loss.
Employment in temporary help services rose in November. The
industry started the year with large job losses, averaging
69,000 per month through April.
Recently, the industry has added jobs, with gains averaging
48,000 per month in October and November. Over the month,
employment continued to increase in healthcare, with gains in
home healthcare and hospitals. Since the recession began,
healthcare has added 613,000 jobs.
Turning now to some measures from the Household Survey, the
unemployment rate edged down from 10.2 to 10.0 percent in
November. The rate was 4.9 percent when the recession began in
December of 2007.
There were 15.4 million unemployed persons in November,
down slightly from the prior month. The number of persons who
are unemployed because of job loss declined in November. The
number of long-term unemployed continued to grow, rising by
293,000 over the month, to 5.9 million.
The employment-to-population ratio held at 58.5 percent.
When the recession began, it was 62.7 percent.
Among the employed, the number of persons working part-time
in November, who would have preferred to work full-time, was
little changed at 9.2 million.
Among those outside the labor force, that is, persons
neither working nor looking for work, the number of discouraged
workers in November was 861,000, up from 608,000 a year
earlier.
These individuals are not currently looking for work,
because they believe no jobs are available to them.
In summary, non-farm payroll employment was essentially
unchanged in November, and the unemployment rate edged down to
ten percent.
My colleagues and I would now be happy to answer your
questions.
[The prepared statement of Commissioner Hall appears in the
Submissions for the Record on page 26.]
Chair Maloney. Thank you. What are the bright spots in this
month's jobs report? What good news do you have for the
American people?
Commissioner Hall. Well, the first, of course, is that the
unemployment rated edged down and the job loss at minus 11,000
was essentially unchanged for November.
I also think that we now get a picture of a prior three
months, prior to November, that job loss had moderated a fair
amount to 135,000 a month.
And, looking forward, temporary help added 52,000 jobs.
That's a pretty reliable leading indicator, and that has been
steadily improving, actually, through the year--through much of
the year.
And then the average weekly hours for manufacturing is also
a leading indicator. That increased by three-tenths of an hour,
and has shown steady improvement.
Chair Maloney. And are there any sectors experiencing more
job creation than job losses?
Commissioner Hall. Well, the sectors that had significant
job gains were the temporary help services, which is typical,
after large job loss like we've had. And we also had job growth
in education and healthcare, as well.
Chair Maloney. And are there any indicators that overall
job losses will continue to slow in coming months?
Commissioner Hall. Well, I think that a couple of the
leading indicators, the temporary help and the average work
week in manufacturing, are both encouraging, and I think the
fact that, in addition to this November number, the prior three
months showed moderation, I think is a good sign, as well.
Chair Maloney. So we're seeing some good signs, for a
change?
Commissioner Hall. Yes.
Chair Maloney. And what is the typical amount of time,
after job contraction ends, before the labor market starts
showing signs of recovery?
Commissioner Hall. Well, if showing signs is a moderation
in job loss, and I think that is a sign, that can occur just a
few months after we start to see signs of growth in output.
It is likely--in the past, it's been true that strong job
growth has taken a few months after we get growth in the output
side of the economy.
Chair Maloney. Could you speak about how we have recovered
in the past recessions? Usually, employment has lagged behind
economic recovery. Is that true, and would you elaborate on job
growth coming after positive economic indicators?
Commissioner Hall. Sure. In past recessions, it's taken a
few months for job loss to moderate to where it's around
unchanged or very modest job loss.
In the last recession, it took about four months after the
end of the recession, for job loss to moderate down to
something like 35,000 a month. In the recession before that, it
took about three months for job loss to actually get to around
unchanged.
But to actually get strong job gain, in the past two
recessions, it's been something like a year and a half after
that, before we got strong job growth.
Chair Maloney. A year and a half?
Commissioner Hall. Yes.
Chair Maloney. Some economists have estimated that it will
take 10.7 million jobs created, to get us back on the pre-
recession unemployment rate.
Assuming that jobs are created at 2.8 million jobs per
year, the best job creation record of any Administration--and
this was achieved by former President Clinton--how long would
you expect it to take us to get us back to full employment?
Commissioner Hall. Well, without offering an opinion on
that 10.7 million jobs, at that rate, though, it would be about
three years.
Chair Maloney. About three years, okay, thank you very
much.
The Chair recognizes Senator Brownback.
Senator Brownback. Thank you very much, Chairman.
Commissioner Hall, who hired temporary people? You noted
that the temporary numbers went up. Who hired the temporary
people? Do we have those by category; do we have those in any
major categories?
Commissioner Hall. We actually don't, and that's in large
part because a lot of the temporary help companies that
specialize in this, they actually can't tell us in what
industries the job growth occurred, so we actually don't know
that information.
We know that about occupations, but we don't know very much
about what industries they're being hired in.
Senator Brownback. That would seem to be an indicator of
where likely hiring would take place, after they fill the
temporary job, that they would more likely step up with a full-
time job; is that correct?
Commissioner Hall. Yes.
Senator Brownback. I agree with Senator Klobuchar, that, I
think, in the future, we've got to make more things here and
rely less on our consumer to spend our way into prosperity in
this economy.
Do you see any trends of signs of that in these numbers, in
either what's falling or what is starting to create some jobs?
Commissioner Hall. It's hard to tell on the employment
numbers at this time, what the economy is going to look like
when we get back to solid economic growth, whether consumer
spending will go back to quite the level it was before.
I just don't think we could say right now.
Senator Brownback. And you don't break it out any way like
that, or you can't pick that out of the numbers of the data?
Commissioner Hall. Not really the employment numbers so
much, no. Obviously, on the output side, if you look at the
components of GDP, you can see consumer spending and sort of
see how that's behaving.
But most of these employment numbers are sort of indirect.
You know, there is the indirect effect of economic growth.
Senator Brownback. You are trying to determine what a
``green job'' is. I believe you've--can you provide me with any
details on current efforts by BLS to define and measure ``green
jobs''?
Commissioner Hall. Sure. We have a proposal to work to
measure ``green jobs'' in our 2010 budget, in our Budget
proposal from the President. We haven't had the appropriation
yet, so our work at this point has been research, so far.
I can tell you that we're likely to, first, focus on
industries where there may be ``green employment'' or ``green
output,'' and then focus on occupations within those
industries. That's sort of our rough plan and how we're going
to proceed, once we get funding.
Senator Brownback. Can you tell, in your numbers, where
there was a policy movement that was made and jobs created, or
a policy move made and jobs hurt?
Here, what I'm getting at, is, on the Cash For Clunkers
Program, there was a lot of discussion about the maintenance of
jobs within the automobile manufacturing sector, with that. Can
you pick that up or any of those factors, or monetary policy
factors, in any of your numbers, that jump out at you or any of
the economists at BLS?
Commissioner Hall. No, it's very hard for us to pick out
the cause of changes in these numbers, because we're just sort
of counting the number of jobs, and, in fact, the
establishments that we survey, they don't always know why their
business has picked up.
So it's very hard for us to sort of pull out the effects of
policy like that, certainly not all of the effects.
I can tell you one possible exception, and this is the Cash
for Clunkers. We don't know what the full effects are. There
may be much more, but we certainly did see a pick-up in retail
sales at automobile dealerships when Cash For Clunkers was in
place, but beyond that, I couldn't tell you what the effect is.
Senator Brownback. Thank you, thank you, Chair.
Chair Maloney. Thank you very much. Congressman Cummings.
Representative Cummings. Thank you very much.
Let me make sure I understand this. Since this--when would
you say this recession began?
Commissioner Hall. It began in December of 2007.
Representative Cummings. I didn't hear you.
Commissioner Hall. I'm sorry. December of 2007, so it's
been 23 months.
Representative Cummings. And during that period, what was
the highest number of jobs lost?
Commissioner Hall. That's a good question.
[Pause.]
Representative Cummings. And what month was that?
Commissioner Hall. In January of this year, we lost 741,000
jobs.
Representative Cummings. In January of this year?
Commissioner Hall. Yes.
Representative Cummings. Now, so this month, we lost how
many?
Commissioner Hall. Eleven thousand.
Representative Cummings. Eleven thousand. We went from 700-
and-some thousand in January of this year, to 11,000 this
month?
Commissioner Hall. Yes.
Representative Cummings. That's a major cut.
Commissioner Hall. Yes, it is.
Representative Cummings. It's major now?
Commissioner Hall. Yes.
Representative Cummings. I mean, people may want to down-
play it, they may want to say that it's no big deal, but it is
a big deal; would you agree?
Commissioner Hall. I would agree; this is the smallest
monthly job loss we've had since the recession started.
Representative Cummings. Since the recession started.
And let's go back to this temporary situation. I've heard
you say, from that chair, many times, that one of the things
you look at--and you said it today--one of the things you look
at with regard to temporary jobs, is that when you--they
basically are an early indicator that we may be moving--a
pretty good indicator that we may be moving in the right
direction, as you see them go up; is that right?
Commissioner Hall. That's correct. And it was a leading
indicator, going into the recession, and it generally, in the
past, has been a leading indicator, coming out of a recession.
Representative Cummings. So, going into recession, help me
with that. Tell me what you're looking for.
Commissioner Hall. Sure. Well, for example, in temporary
help, the temporary help industry started having declining job
growth, in, I'd say, early 2007 to mid-2007, so it was showing
signs of a slowing in the labor market in early 2007, before we
went into the recession in January of 2008--or December of
2007.
Representative Cummings. You know, teenagers have been
especially hard-hit during this recession. As the economy
recovers, are teens going to be the last to be hired, I mean,
from what you can see, and are we creating a lost generation of
youth?
You know, there was--I read something just recently, that
African American youth from 16 to 24 had a jobless rate of over
35 percent. I'd say that that's--you know, I don't know how
accurate that is, but I would say that it's probably worse than
that in many districts.
I was just wondering, what can you see from your teenage
rates? I mean, it was young people's rates, and I don't know
whether you break it down, 16 to 24, how you break that down,
but however you do it, tell me what that situation is.
Commissioner Hall. Sure. Yeah, the--in all the categories
of workers, no matter what age, what gender--oh, I'm sorry, no
matter what gender or their minority status, their unemployment
rates are higher than everybody else.
They're higher, they've gone up more during this recession,
they generally started higher, as well.
Representative Cummings. A lot of people--this is a comment
and not for you to answer--a lot of people want to say that
maybe it's education, but there's been recent research that an
African American male with a high school diploma and no record,
no criminal record whatsoever, is just as--I mean, he--he's--
when it comes to employment, he's level, just about, with a
person, a white male with a record.
And then so you and I have talked many times about this
whole thing of race. It is significant, sadly, in this day and
age.
What is the unemployment for white folks in America?
Commissioner Hall. The unemployment rate is 9.3 percent.
Representative Cummings. That's 9.3 percent?
Commissioner Hall. Yes.
Representative Cummings. And for African Americans, what is
it?
Commissioner Hall. It's 15.6 percent.
Representative Cummings. Now, what was it last time for
African Americans, the last time, last month?
Commissioner Hall. Last month, it was 15.7 percent.
Representative Cummings. So they've come down one point.
And what was white for last time?
Commissioner Hall. It was 9.5 percent, so it's come down
two-tenths.
Representative Cummings. Okay. And what about Hispanics?
Commissioner Hall. Hispanics is at 12.7 percent. It's
declined by four-tenths of a percent.
Representative Cummings. I see my time is up. Thank you,
Madam Chair.
Chair Maloney. Okay, Congressman Brady.
Representative Brady. Thank you, Madam Chairman. I think we
ought to always look for good news with these numbers, and
there is some today, but I do caution this Congress against any
kind of end-zone dance just yet on this economy.
Our GDP growth for the last quarter was just revised
downward to 2.8 percent; the number of long-term unemployed
increased to almost six million workers in America, which is
very troubling.
And in our unemployment numbers, we are--America continues
to be the worst-performing country when it comes to job losses,
of any of our major competitors. Other countries are
stabilizing faster and recovering faster than we are, and
that's important as we move forward and to keep in perspective.
I always wonder, you know, is all this government spending
working? And in the massive effort, while I think we've taken
our eye off the ball on jobs and focused on cap-and-trade and
healthcare and a number of other distractions, jobs have
suffered.
The stimulus bill, we were told, poured billions of dollars
into infrastructure, and we're told construction and
manufacturing would see the greatest job gains; they've seen
among the greatest job losses.
We poured--and the question I have, initially, for you, is,
this government's poured billions of dollars into health IT,
into telecom funding, broadband employment, yet this report
today shows 17,000 job losses in information and telecom.
What's the reason for that?
Commissioner Hall. I don't know. I can tell you that the
17,000 decline is about on average over the past twelve months,
so it's been a little bit of a trend lately.
And in the prior six months, it was still about the same,
so----
Representative Brady. These aren't one-time job losses;
this continues to be steady job losses in those areas?
Commissioner Hall [continuing]. Yes.
Representative Brady. Okay, can I ask about--I want to be
real realistic about how long it will take us to dig out of
this hole. The Wall Street Journal recently calculated that if
the number of payroll jobs goes at the same rate as it did
during the last expansion, that it would take nearly seven
years to get back to where we were, to regain 7.2 million
payroll jobs that have been lost.
A number of economists, in the same publication, have
estimated that it will take five to six years before we see a
five-percent handle on unemployment again. You just said that
it would only take three years to get back to full employment.
That's a big difference.
Commissioner Hall. Yeah, I was using some assumptions that
came from the question. We haven't done this calculation
ourselves.
Representative Brady. Would you consider them to have been
fairly rosy assumptions, compared to average expansions after
recessions?
Commissioner Hall. You know, it's hard to tell. You know,
it's hard to know where we're going to come out with this
expansion, what sort of job growth we're going to have.
Representative Brady. How long--can I ask--it is a big
guess, and I'm sure it's a huge range, but based on today's
report, how much would household employment have to increase,
for us to get back to eight percent and then to five percent
unemployment, would you guess?
Commissioner Hall. I'd have to think about that a little
bit. We probably need monthly payroll job growth something in
the 115,000 to 120,000 a month, to--that's consistent with a
holding unemployment rate, so we'd need growth somewhere over
that in payroll jobs, to start reducing the unemployment rate,
over a long-run time period. I can tell you that.
I'm not sure I could do the calculation quick enough.
Representative Brady. And that works off about 1.4 or 1.5
million jobs a year, regains, 1.5 million, so, if we've lost
seven, we're talking about four or five, somewhere in that
range, if we were to gain at that rate consistently?
Commissioner Hall. Oh, at that rate, that's correct,
although that's a fairly slow rate, but, yes.
Representative Brady. Okay, all right, thank you,
Commissioner.
Chair Maloney. Thank you. I just would like to respond to
my good friend and colleague, Congressman Brady, who noted that
Democrats should not be dancing in the end zone. We certainly
are not dancing in the end zone.
The President is taking job creation incredibly seriously,
as is every member of Congress on both sides of the aisle. But
if you look at the chart, you have to admit we are trending,
under the Democratic Administration, in the right direction.
The last month that former President Bush was in office, we
lost 700,000 jobs, and we have consistently moved in the right
direction, to this month, where it is 11,000 jobs. It is a
tragedy for every American family that has lost a job in the
past or in the present, but we are trending in the right
direction.
[The chart titled ``Monthly Change in Nonfarm Payrolls''
appears in the Submissions for the Record on page 57.]
The Chair recognizes Senator Klobuchar.
Senator Klobuchar. Thank you very much, Chairwoman Maloney.
I think that chart is a very good way of looking at this, even
though we know people are still suffering, to see the changes
over time.
I will also note for the record, that the only people
dancing in the end zone, are the Minnesota Vikings, after Brett
Favre has thrown these great passes, just in case you guys
missed it. [Laughter.]
Okay, my question, first of all, generally, Commissioner
Hall, is about why we're seeing this trend? Could it have
anything to do with hiring for the holiday season, or do you
see it as a broader signal of economic recovery?
Commissioner Hall. It would have to be the latter. Our data
is seasonally adjusted, so we take into account, the normal
seasonal patterns like the holidays, into account in estimating
these numbers, so this means more than just seasonal.
Senator Klobuchar. So you actually anticipate, when the
holidays are coming up, that you're going to see some bump-up,
and you sort of discount that effect?
Commissioner Hall. Yes, exactly.
Senator Klobuchar. Okay, well, I didn't know that. That's
good.
We hear repeatedly that unemployment is one of the last
things to swing back as part of a recovery. When you look back
through history, with all the many years you've been looking at
these figures, how long does it usually take unemployment to
catch up with the other economic indicators, like, as we know
we've seen increase in GDP and other things?
Commissioner Hall. Well, that's actually going to be one of
the debates, I suppose, but the last two recessions, it took a
long time. Focusing on the payroll jobs, for example, the last
recession, it took 39 months for payroll jobs' level to get
back to the pre-recession level.
In the prior recession, it took around 24 months. Those are
the two so-called ``jobless recoveries.''
Senator Klobuchar. For the jobless recovery, then, what
years were those?
Commissioner Hall. 2001, and, then, before that, it was the
1991.
Senator Klobuchar. So, in 2001, it took 39 months?
Commissioner Hall. Yes.
Senator Klobuchar. And in 1991, it took how long?
Commissioner Hall. Twenty-four months.
Senator Klobuchar. Twenty-four months? And then do you have
those figures of when other economic indicators improved before
the job numbers went up, or a general sense of it?
Commissioner Hall. Yeah, yeah, I mean, my count down there
was from the official end of the recession, and that,
typically, when the National Bureau of Economic Research--
that's the independent group that declares a recession over--
they typically will pick the end of a recession when the output
numbers start to show growth and steady growth, and so I would
say the number I gave you was pretty accurate delay from the
time some of the other data showed improvement, to when the
jobs data got back to----
Senator Klobuchar. Oh, so you're saying there's, like, a
39-month delay?
Commissioner Hall [continuing]. Yeah. Now, this is not--
this delay is not before we see improvement in the labor
market; this is before we see enough----
Senator Klobuchar. Where it's back to where it was?
Commissioner Hall [continuing]. Yeah, exactly, that the job
level is back to where it was.
Senator Klobuchar. Okay, so that's why you wouldn't be
surprised that it's taking some time to get back to where we
were before this all started?
Commissioner Hall. Yes, absolutely.
Senator Klobuchar. Okay. As you know, we discussed that the
President held a jobs forum yesterday, with more than 100 CEOs
and small business owners, business leaders, mayors, academics,
to figure out what we should be doing here in Washington,
beyond what's already been done to get the job market going
again.
Do you have any sense of what's worked best in the past for
creating jobs?
Commissioner Hall. I don't. I wouldn't want to offer an
opinion on that.
Senator Klobuchar. Oh, that's right, I forgot that you
don't offer opinions.
I have some ideas that I expressed in my opening statement.
One of the things that I talked about, in addition to getting
some of this amount of this TARP money out, in addition to a
large amount going to deficit reduction, to also go to small
business credit.
Do you have a sense of what's happened in the past in terms
of the statistics for U.S. exports and how that has led to
significant job creation?
Commissioner Hall. Yeah, I think, certainly, U.S. exports
can be a significant stimulus. I'd have to say, from past
experience, that U.S. exports rely, in large part, on growth
outside the U.S.
And if you sort of look at the economic growth in some of
our major trading partners, that would give you a pretty good
idea of how exports will pick up and what kind of stimulus that
may be.
Senator Klobuchar. So you're saying there's clearly a
connection between more buying power in some of these other
countries, and then we do better with our exports?
Commissioner Hall. Yes.
Senator Klobuchar. And so the fact that we're suddenly
seeing some of these other countries that have been developing
countries, starting to put more money, basically, into
consumers' hands, that we're starting to see some increase in
their living standards, that you could--from there, could be
the possibility that you'd see the open markets for more
opportunities for exports?
Commissioner Hall. Yes.
Senator Klobuchar. All right. Could you look back in time
for me--and you don't have to do it right now, obviously--to
see if you can see some connection between the unemployment in
our markets and times when we've had this opportunity arise,
either because of the weak Dollar or increasing markets for
exports?
Because, again, as I said in my opening, there's just this
startling number, if you could even increase it by one or two
percent, and we've got 95 percent of our potential customers
outside of the United States' borders, with small and medium
businesses having so little access to that, with increasing
access within the last few years. I just see that as part of
the improvement.
I've seen it firsthand in our agricultural community in
Minnesota. You know, we could--I could eat as much bacon as I
want on TV to show that pork doesn't have H1N1, but what really
helps, is when China finally opens its markets to our pork.
All right, thank you very much, Commissioner.
Chair Maloney. Thank you very much. The Chair recognizes
Congressman Burgess.
Representative Burgess. Thank you, Madam Chair.
Commissioner Hall, let me ask you a couple of questions that I
know you can't answer.
You said that the recession started in December of 2007,
correct?
Commissioner Hall. Yes.
Representative Burgess. George Bush was the President. Who
was the Speaker of the House in December of 2007?
Commissioner Hall. The same as now.
Representative Burgess. And that would be Nancy Pelosi?
Commissioner Hall. Yes.
Representative Burgess. And she had been Speaker for a year
at that time, and at that point we had come from an economy
that was in relative expansion to an economy that was coming
into decline.
Now, has that been the same Speaker of the House since 2007
to the present time?
Commissioner Hall. Yes.
Representative Burgess. Do you think that Congress really
has an effect in creating or eliminating jobs in this country?
Be careful I'm asking you for an opinion.
Commissioner Hall. Yeah, yeah, and I was going to--I was
just about ready to dodge it. [Laughter.]
Representative Burgess. Well, and that is--of course, you
don't have to answer the question because we've got people all
over the federal district today talking about how Congress is
going to create jobs, how the White House is going to create or
save jobs, but, really, it's small business that creates jobs.
We have the White House Summit going on and they've got all
the big actors, they've got the Googles and the big folks down
there, but as I said in my opening statement it's Elm Street
and Oak Street.
I think Senator Klobuchar has an excellent point. I have
difficulty with some of the trade agreements that we've done in
the past, but now it's been a year since we've done a trade
agreement. Is that a good thing or a bad thing in a country
that's trying to recover from a recession and reduce
unemployment?
Commissioner Hall. Well, I can give you a generic answer,
and the generic answer is, of course, is, lots of times,
exports can be a real source of growth and stimulus for an
economy.
Representative Burgess. And, again, I'd just emphasize that
it's been a year since we've done any sort of trade agreement,
and some agreements, like Columbia, have been languishing since
they were passed by--or introduced in the last Congress, and
we've been blocked by the Speaker of the House, from having a
vote on that.
Now, we could argue the rightness or wrongness of that, or
whether that's a good thing or a bad thing, but we can't argue,
because it can't come up for a vote, so we can't debate it on
the floor.
And to the extent that Congress does bear some
responsibility for the loss of jobs or the lack of job
creation, I think that's one of the things that has to be
considered.
And we all know from--I've got to be careful here, because,
of course, I'd be asking you to offer an opinion and I know I
must not do that, but we look at previous times where the White
House has made a difference in job creation in this country,
and, in my brief lifetime, that was when President Kennedy
reduced the marginal tax rates and when President Reagan did
the same thing in the 1980s.
And, after both of those activities, we saw substantial job
growth. In 2003, shortly after I arrived in Congress, we had
some other tax policy instituted, at a time where the economy
was in a recession and job growth was lagging, and it was a
result of that tax policy, three months later, after it was
signed into law in July of 2003, where we began to see
substantial job creation.
I just wonder if we shouldn't be looking at those things
that have worked in the past.
Now, interestingly enough, we had a stimulus bill that
passed in February. And the stimulus bill had in it, as part of
the stimulus bill, there was--we're going to invest in
infrastructure, we're going to create shovel-ready jobs or go
to shovel-ready jobs around the country, February is a good
time to do that, because the construction season is going to be
starting in the northern part of the country in just a few
months time, but out of that $787 billion stimulus bill, my
state of Texas received $2 billion for infrastructure projects.
It seems like a fairly weak effort, but probably more
importantly, the GAO report that has just come out states that
the Federal Highway Administration is the best agency to
fulfill job creation.
Now, in the stimulus bill, the whole Federal Highway
Administration only got $27 billion, and, as I pointed out,
Texas got $2 billion, but also, because we have not done the
highway bill reauthorization, we are having to rescind money
back to the Highway Trust Fund in Texas. Texas had to send back
$787 million in long-term funding, which put projects that
were, indeed, shovel-ready a year ago, has put them now off the
docket. They're not even being considered.
So, does it make sense to provide a stimulus of $2 billion
to Texas, but then take $787 million away in what otherwise
should have been stable highway funding?
[No response.]
Representative Burgess. That's actually a yes or no
question.
Commissioner Hall. Oh.
Representative Burgess. Does it make sense? [Laughter.]
Not really an opinion, but I guess it could be regarded as
an opinion, and you may want to dodge it, but does it make
sense?
Chair Maloney. The gentleman's time has expired, but
Commissioner Hall may answer his question.
Commissioner Hall. I'm not an expert in that, so I'll dodge
that.
Representative Burgess. The answer is, no, it doesn't make
sense. Thank you, Madam Chairman.
Chair Maloney. Thank you. The gentleman's time has expired.
While some of my good friends and colleagues would like to
find a negative spin to these numbers today, people on Main
Street and the markets have found that today's news is nothing
but good. The Dow Jones opened up over 100 points; the Dollar
surged, the price of oil fell, and, most importantly, this
chart shows that in January, the last month that President Bush
was in office, we were losing 700,000 jobs.
Every job lost is a tragedy, but under the Bush
Administration--the Obama Administration, we've been trending
in the right direction, and, this month, we only lost 11,000
jobs. It's 11,000 jobs too many, and the Administration has
responded with the Congress in passing the American Recovery
Reinvestment Act, which has jump-started productivity, the
extension of unemployment insurance that has given hope to
American workers that are still looking for jobs, aid to states
that has maintained public and private programs for some of the
neediest Americans, and we are starting a series of hearings on
job creation ideas, working with the President and others, and
we look forward to working with the American people to get this
economy moving even more in the right direction, and we will
not stop until we have created a job opportunity for everyone
who wants to go to work.
I thank you, Commissioner Hall, for your hard work, and
thank my colleagues for being here today. I look forward to
seeing you next week on Thursday. The meeting is adjourned.
Representative Brady. Madam Chairman? I was just going to
say, I hope you have great holidays, and, Commissioner, we
appreciate--although we tend to torture you each month when you
come here, we do appreciate very much, the information you
provide.
We hope you and the whole BLS have a great holiday season.
Commissioner Hall. Thank you.
[Whereupon, at 10:41 a.m., the hearing was adjourned.]
SUBMISSIONS FOR THE RECORD
Prepared Statement of Carolyn Maloney, Chair, Joint Economic Committee
For the first time since the recession began two years ago, the
labor market has stabilized.
Employment remained steady in November, and the unemployment rate
ticked down to 10 percent.
The current Administration took office less than eleven months ago.
The economy was in the midst of the worst crisis since the Great
Depression.
In fact, Council of Economic Advisers Chair Christina Romer
testified to the Joint Economic Committee that the shocks we endured in
this ``Great Recession'' were actually worse than those of the Great
Depression.
Less than a year ago, job losses were growing more and more severe.
Last November, the economy shed 600,000 jobs. Losses increased until
January, when they hit a post-Great Depression record of 741,000 jobs
lost, the last month that President Bush was in office.
But we turned a corner. Job losses have steadily fallen for the
last six months. And today, we've learned that the labor market
remained stable in November. The trend is heading in the right
direction.
There is no escaping the cruel math of recoveries. The recovery of
the job market lags behind the recovery of the broader economy.
Businesses must have more customers before they add employees.
However, thanks to the Recovery Act, we are seeing signs of growth.
The non-partisan Congressional Budget Office estimates that at least
600,000 additional workers were employed in the third quarter of 2009
because of the stimulus. We are on-track to create or save at least 3.5
million jobs over the life of the Recovery Act.
Average weekly hours are climbing, with indications that the
manufacturing sector is driving that upward trend. Average hourly
earnings are up, too.
And, job creation in the temporary help sector is a leading
indicator of progress in the labor market. Since July, temporary help
services has added 117,000 jobs--86,000 in November alone.
Although the labor market appears to be stabilizing, too many
Americans remain out of work. More than 15 million workers are
unemployed.
At the Joint Economic Committee, we estimate that well over 4
million Americans have seen their employment-sponsored health insurance
coverage evaporate because of losing a job. In the longer term, the
passage of comprehensive health insurance reform will help assure that
a lost job no longer means lost access to affordable, quality health
insurance coverage. In the meantime, we must insure that a jobs crisis
does not turn into a health care crisis for more families.
The COBRA benefits program allows laid-off employees to remain
insured by purchasing continued coverage from their employer's health
insurance plan. Many out-of-work families were able to purchase
affordable health insurance coverage thanks to temporary COBRA premium
support included in the Recovery Act. But that support expired this
week, and many unemployed families will see their premiums skyrocket.
Congress should now extend COBRA support to help struggling families.
Today's jobs report makes it clear--we are making progress, but the
road to recovery will be long, and it will not be easy. While we have
brought the economy back from the brink, we are not yet where we need
to be in terms of job creation. The mission is to create high-quality
private-sector jobs.
Yesterday, President Obama convened a Jobs Summit where small- and
medium-sized businesses, major employers, academics, and working men
and women brainstormed ideas for putting Americans back to work.
In the last year, Congress has enacted policies that support
struggling families and encourage job creation. The $700 billion
Recovery Act included a tax cut for 95 percent of American families and
created jobs while investing in clean energy technologies,
infrastructure, and education.
Just last month, we extended the $8,000 first-time homebuyers
credit that will spur construction jobs. We extended a host of safety
net programs that will help struggling families weather the economic
storm.
We extended the net operating loss carry-back provision that will
help small businesses hire new employees. And we are boosting funding
for small business loans via the Small Business Administration.
Congress is continuing to work on new policies that will jump-start
job creation. Putting unemployed Americans to work rebuilding our
nation's crumbling infrastructure is an investment in our future. Other
potential policies include targeted tax credits for job creation and
additional investments in education, health care, and energy
independence.
In the coming months, the Joint Economic Committee will be holding
hearings to learn about job creation ideas from America's best and
brightest. I encourage you all to attend next Thursday's hearing with
Nobel Prize winning economist Joseph Stiglitz, who will be kicking off
job creation.
__________
Prepared Statement of Kevin Brady, Senior House Republican, Joint
Economic Committee
I am pleased to join in welcoming Dr. Hall before the Committee
this morning.
Today's employment report again is bad news for American workers.
During November, 11,000 payroll jobs were lost. The unemployment rate
edged down to 10 percent.
The lack of job creation has caused an unemployment crisis for our
country. Even if the National Bureau of Economic Research eventually
determines that a recovery began this fall, it remains a jobless, or
even worse, a ``job loss'' recovery. And that's no recovery for
American workers and their families.
Instead of ``focusing like a laser beam'' on the unemployment
crisis, President Obama and congressional Democrats have spent most of
this year promoting misguided initiatives to address other, less
pressing issues. For example, even though the ``climate-gate'' scandal
has compromised the integrity of studies frequently cited to prove man-
made global warming, President Obama and congressional Democrats
continue to press for a ``cap and trade'' scheme that would boost U.S.
energy prices, slow economic growth, and put American manufacturers and
their workers at a competitive disadvantage globally.
Acknowledging both the strengths and weaknesses of our health care
system, Americans sensibly want to fix what's wrong step-by-step and
leave what's right alone. Ignoring this common-sense approach,
President Obama and congressional Democrats are pushing for a complete
overhaul of the health care system that would simultaneously boost
taxes, limit choice, increase costs, and add to future federal budget
deficits once accounting gimmicks are stripped away.
I applaud President Obama for finally turning to our most pressing
domestic challenge--the unemployment crisis--by hosting a jobs summit,
but I have to wonder what concrete results will come of the
discussions.
In January, two of President Obama's top economists forecast that
if the Congress were to enact the Obama stimulus bill, then the
unemployment rate would remain at or below 8.0 percent during 2009.
This is the relevant standard against which to measure the performance
of the stimulus legislation. Unfortunately, since President Obama
signed the stimulus bill into law on February 17th, the unemployment
rate has increased far above 8 percent.
Administration officials continue to make extravagant,
statistically dubious claims about how many jobs the stimulus plan has
allegedly created or saved. The press examined the reports on which the
Administration based its jobs claims and indentified many jobs that
have no connection to the stimulus or were counted multiple times. Some
cases of misreporting are so ludicrous that the Administration's jobs
claims have become the butt of jokes.
In contrast to the Administration's difficult-to-substantiate
claims, Bureau of Labor Statistics employment data show that the United
States has suffered a net loss of 2.9 million payroll jobs since
President Obama signed the stimulus bill into law.
If President Obama really wants to create millions of new jobs,
there is a lot that Republicans and Democrats can do together to reduce
the unemployment rate. We know what works. We can take cues from
Democratic President John F. Kennedy and Republican President Ronald
Reagan, each of whom launched a decade-long economic boom that created
millions of jobs.
First, we must control the growth of federal spending to bring down
federal budget deficits, scaling back or delaying costly new
initiatives.
Second, we must stop all tax increases on American families and
businesses as long as the unemployment crisis persists.
Third, we must reduce the tax burden on new business investment.
Business investment is very responsive to changes in the tax burden
placed on it. Most importantly, business investment creates new and
frequently better jobs.
We could reduce the tax burden on business investment in several
ways--Kennedy instituted a 7 percent investment tax credit, while
Reagan accelerated tax depreciation. We also should reduce our high
corporate income tax rate.
I am encouraged that President Obama has finally acknowledged the
unemployment crisis. I hope that we can learn from history and finally
do what will actually boost growth and create jobs.
Dr. Hall, I look forward to hearing your testimony.
__________
Prepared Statement of Keith Hall, Commissioner, Bureau of Labor
Statistics
Madam Chair and Members of the Committee:
Thank you for the opportunity to discuss the employment and
unemployment data we released this morning.
The unemployment rate edged down to 10.0 percent in November, and
nonfarm payroll employment was essentially unchanged (-11,000).
Additionally, after revision, the estimates of job loss for September
and October were smaller than reported last month. In November, job
losses occurred in construction, manufacturing, and information, while
employment rose in temporary help services and health care.
Construction employment fell by 27,000 over the month, compared
with an average monthly decline of 63,000 in the prior 6 months. In
recent months, most of the decline has occurred in the nonresidential
components. In manufacturing, employment fell by 41,000 in November,
about in line with the trend over the prior 4 months. There were
notable job cuts over the month in machinery, computer and electronic
products, and printing. The factory workweek rose by 0.3 hour and has
increased by one full hour since May. In November, employment in the
information industry declined by 17,000, with telecommunications
accounting for half of the loss.
Employment in temporary help services rose in November. The
industry started the year with large job losses, averaging 69,000 per
month through April. Recently, the industry has added jobs, with gains
averaging 48,000 per month in October and November.
Over the month, employment continued to increase in health care,
with gains in home health care and hospitals. Since the recession
began, health care has added 613,000 jobs.
Average hourly earnings of production and nonsupervisory workers in
the private sector were up by 1 cent in November to $18.74. Over the
past 12 months, average hourly earnings have risen by 2.2 percent. From
October 2008 to October 2009, the Consumer Price Index for Urban Wage
Earners and Clerical Workers (CPI-W) declined by 0.4 percent.
Turning now to some measures from our household survey, the
unemployment rate edged down from 10.2 to 10.0 percent in November. The
rate was 4.9 percent when the recession began in December 2007. There
were 15.4 million unemployed persons in November, down slightly from
the prior month.
The number of persons who were unemployed because of job loss
declined in November. The number of long-term unemployed continued to
grow, rising by 293,000 over the month to 5.9 million.
The employment-population ratio held at 58.5 percent. When the
recession began, it was 62.7 percent. Among the employed, the number of
persons working part time in November who would have preferred full-
time work was little changed at 9.2 million.
Among those outside the labor force--that is, persons neither
working nor looking for work--the number of discouraged workers in
November was 861,000, up from 608,000 a year earlier. These individuals
are not currently looking for work because they believe no jobs are
available for them.
In summary, nonfarm payroll employment was essentially unchanged in
November, and the unemployment rate edged down to 10.0 percent.
My colleagues and I now would be glad to answer your questions.
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