    [Joint House and Senate Hearing, 111 Congress]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 111-816

                    THE EMPLOYMENT SITUATION: NOVEMBER 2010

    =======================================================================

                                    HEARING

                                   before the

                            JOINT ECONOMIC COMMITTEE
                         CONGRESS OF THE UNITED STATES

                         ONE HUNDRED ELEVENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                DECEMBER 3, 2010

                                   __________

              Printed for the use of the Joint Economic Committee

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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

                        Andrea Camp, Executive Director
                   Jeff Schlagenhauf, Minority Staff Director

                                C O N T E N T S

                                  ----------

                                    Members

    Hon. Carolyn B. Maloney, Chair, a U.S. Representative from New
      York...........................................................     1
    Hon. Kevin Brady, a U.S. Representative from Texas...............     3
    Hon. Amy Klobuchar, a U.S. Senator from Minnesota................     5

                                    Witness

    Statement of Dr. Keith Hall, Commissioner, Bureau of Labor
      Statistics, U.S. Department of Labor; Accompanied by: Mr.
      Philip Rones, Deputy Commissioner, Bureau of Labor Statistics;
      and Dr. Michael Horrigan, Associate Commissioner for Prices and
      Living Conditions, Bureau of Labor Statistics..................     8

                           Submissions for the Record

    Prepared statement of Representative Carolyn B. Maloney, Chair...    22
        Chart titled ``Monthly Change in Private Payrolls''..........    24
    Prepared statement of Representative Kevin Brady.................    25
    Prepared statement of Dr. Keith Hall, Commissioner, Bureau of
      Labor Statistics, together with Press Release No. USDL-10-1662.    26
    Chart titled ``In Past Economic Downturns, the Unemployment Rate
      Was Far Lower When Congress Allowed Federal Unemployment
      Benefits to Expire''...........................................    66
    Letter transmitting Commissioner Hall's response to
      Representative Cummings........................................    67

                           THE EMPLOYMENT SITUATION:
                                 NOVEMBER 2010

                                  ----------

                            FRIDAY, DECEMBER 3, 2010

                 Congress of the United States,
                              Joint Economic Committee,
                                                        Washington, DC.
        The committee met, pursuant to call, at 9:36 a.m. in Room
    216 of the Hart Senate Office Building, The Honorable Carolyn
    B. Maloney (Chair) presiding.
        Representatives present: Maloney, Cummings, and Brady.
        Senators present: Klobuchar.
        Staff present: Andrea Camp, Gail Cohen, Colleen Healy,
    Jessica Knowles, Rachel Greszler, Jane McCullogh, Jeff
    Schlagenhauf, Ted Boll, and Robert O'Quinn.

    OPENING STATEMENT OF THE HONORABLE CAROLYN B. MALONEY, CHAIR, A
                   U.S. REPRESENTATIVE FROM NEW YORK

        Chair Maloney. The meeting will come to order.
        I recognize myself for an opening statement. Today's
    hearing with Commissioner Hall will mark the last hearing that
    I will chair as the Chair of the Joint Economic Committee.
        Almost two years ago, shortly after the inauguration of
    President Obama, my first hearing was also with Commissioner
    Hall, and the news that he presented that day was rather grim.
    The previous month, the U.S. economy had shed a staggering
    654,000 jobs. Today's news is a little better. We are trending
    in the right direction, but not as strongly as we wanted.
    Today's employment report shows the economy added 50,000
    private-sector jobs last month, making November the 11th
    straight month of employment gains in the private sector. And
    we can see that in the chart over there.
        [Chart titled ``Monthly Change in Private Payrolls''
    appears in the Submissions for the Record on page 24.]
        Since the beginning of the year, the economy has added 1.2
    million jobs in the private sector. Private payroll grew by an
    average of 79,000 jobs per month in the first quarter of 2010;
    118,000 jobs in the second quarter; and 124,000 jobs in the
    third quarter.
        While job creation has picked up, the unemployment rate
    remains unacceptably high. This morning's employment report
    showed that the unemployment rate edged up to 9.8 percent in
    November. In addition to overall private-sector job gains, the
    GDP grew by 2.5 percent in the third quarter of 2010 due to
    stronger consumer spending. This is the fifth consecutive
    quarter of growth.
        Retail sales have risen steadily for the past four months.
    Excluding the more volatile sales of cars and gasoline, retail
    sales have increased steadily since June. Surveys of both the
    service sector and the manufacturing sector show that growth is
    expected to continue.
        When I became Chair of the JEC in January of 2009, the
    economy was still reeling under the shocks of the Great
    Recession. One of the people who testified was Christina Romer,
    Chair of the Council of Economic Advisers, and she testified
    that our economy endured shocks during this recession that were
    even greater than the economic shocks of the Great Depression.
        This Committee has closely monitored the employment
    situation and tracked its rebound. Over the past two years, the
    Joint Economic Committee held over 15 hearings and issued over
    40 reports. In 2010, consistent with its mission to monitor the
    employment situation of the country, the JEC focused on job
    creation, holding hearings on problems in the labor market and
    solutions to spur employment.
        Job creation was also the central focus of the JEC Annual
    Report, our mandated analysis of the Economic Report of the
    President, released earlier this year.
        While the economic shocks of the Great Recession will take
    time to heal, the economy has made progress in the past year.
    The policies that Democrats in Congress quickly put into place
    over the last year are working. Policies do matter.
        We passed the HIRE Act, which provides a payroll tax credit
    for businesses that hire unemployed workers. We passed
    legislation to promote hiring by smaller businesses, the
    engines of job growth in our economy; provided additional tax
    incentives to small businesses, including the $30 billion
    Access to Credit Loan Program; and raised the cap on SBA 7(a)
    loans from $2 million to $5 million.
        We extended aid to states to pay for their increased
    Medicaid costs, and we provided additional funding for
    teachers. The Department of Education estimated that 140,000
    teacher jobs were saved because of the increase in funding.
        We passed legislation to help our domestic manufacturers by
    reducing tariffs. We also extended Unemployment Insurance
    benefits to unemployed workers who have been hard hit during
    this recession. The most recent extension did not raise the
    number of weeks that unemployed workers could receive benefits,
    but it did reauthorize the program so that unemployed workers
    could continue receiving those critical benefits.
        However, we are all aware that the latest extension of
    Unemployment Insurance Benefits ran out this week. For most of
    the unemployed, the expiration of these benefits will mean that
    unemployed benefits will stop as soon as they enter their 27th
    week of unemployment. This comes at a cruel time when more than
    40 percent of the unemployed have been out of work at least 27
    weeks.
        If Congress does not act quickly to renew these benefits,
    nearly 2 million unemployed workers will lose their benefits
    during the holiday season.
        Although preliminary reports show a bump up in consumer
    spending on Black Friday, the loss of unemployment benefits
    will have a significant impact on retail spending in the weeks
    and months to come. Prematurely ending the Federal Unemployment
    Insurance Benefits Program will drain the economy of $80
    billion in purchasing power and cost the economy up to 1
    million jobs over the next year.
        According to the nonpartisan Congressional Budget Office,
    unemployment benefits are one of the most effective tools for
    boosting economic growth and employment. Allowing the Federal
    Unemployment Insurance Program to expire when the unemployment
    rate is well over 9 percent would be absolutely unprecedented.
        For every recession that has called for Congress to provide
    emergency unemployment benefits over the past six decades,
    Congress has never let those benefits expire with the
    unemployment rate above 7.4 percent.
        This is a tragic time to break from precedent. It is unfair
    to the millions of families counting on these benefits, and
    unwise for an economy that is still recovering from the Great
    Recession.
        I hope that we can count on our Republican colleagues in
    both chambers to do the right thing and vote to maintain the
    current Federal Unemployment Insurance Program.
        I yield back the balance of my time, and I recognize my
    good friend and colleague on the other side of the aisle,
    Congressman Brady.
        [The prepared statement of Representative Maloney appears
    in the Submissions for the Record on page 22.]

            OPENING STATEMENT OF THE HONORABLE KEVIN BRADY,
                    A U.S. REPRESENTATIVE FROM TEXAS

        Representative Brady. Thank you, Madam Chairwoman. Today we
    hold the last regularly scheduled employment hearing with the
    Bureau of Labor Statistics in the 111th Congress. Like all
    Americans hoping for an economic turnaround, this has been a
    difficult two years for members of the Joint Economic Committee
    with employment reports month after month showing large numbers
    of our fellow Americans out of work with stubbornly high rates
    of unemployment. But the focus of this Committee on the
    employment situation is a critical part of its function as no
    other aspect of the nation's economic wellbeing is more
    important than the ability of our citizens to find productive
    work.
        Dr. Hall has had the difficult task of presenting the many
    reports on the bleak employment conditions to us. He has done
    so in a professional and insightful manner. I want to thank him
    and his staff at the Bureau of Labor Statistics for the effort
    they make to compile the employment data in meaningful ways and
    for answering our questions. I welcome Dr. Hall again this
    morning.
        Chairwoman Maloney has held many additional hearings on
    various aspects of the labor market. I want to thank the
    Chairwoman for her compassion and dedication in setting the
    Committee's agenda. We appreciate her leadership in many ways,
    and again thank you for your many months and many hours of hard
    work.
        Senator Brownback will be leaving the U.S. Senate next year
    to assume his new duties as the Governor of the State of
    Kansas. I sincerely thank him for his service as the Ranking
    Member on this Committee, and congratulate him on his new
    leadership position. All the best to you, your family, and the
    State of Texas--or the State of Kansas. I'm so used to saying
    that, it just comes out.
        [Laughter.]
        I didn't put ``great'' in front of it, but it was in my
    mind. We wish the best to Senator Brownback.
        As we approach the end of the year and of this Congress,
    the national employment picture unfortunately remains bleak.
    The unemployment rate increased to 9.8 percent mainly due to an
    increase in the number of jobs lost, not to an increase of new
    job seekers. And this month's 39,000 increase in payroll
    employment was very disappointing given the expectations. Worse
    still is the fact that we have lost 101,000 payroll jobs since
    the recession officially ended 17 months ago. Think about that.
    Despite nearly $5 trillion of fiscal and monetary stimulus, we
    have 101,000 fewer jobs in America than when the recession
    officially ended. And if we were to compare today's 9.8 percent
    unemployment rate to what the White House promised when we
    passed that major stimulus, they projected that unemployment
    would be at 7 percent this month instead of the staggering 9.8
    percent.
        This recovery remains painfully slow, held back I believe
    by consumers doubtful of the President's ability to manage this
    economy, and businesses discouraged by watching the Democrats'
    tax hikes and job-blocking regulations.
        Yesterday's actions by the House to raise taxes on the very
    consumers and small businesses most likely to pull us out of
    this poor economy, I think, is more of the same failed economic
    policies that have hindered America's recovery.
        Economic indicators generally tell us that we are just
    making a painfully slow recovery. In November, total payroll
    employment was not significantly different than it was 17
    months ago. Unfortunately, this recovery is too weak and
    private sector growth is too slow to reduce the unemployment
    rate appreciably, while the federal work force thrives.
        In contrast, by the 17th month of the Reagan recovery after
    the severe 1981-82 recession, total payroll employment had
    increased by 5 million and the unemployment rate had fallen by
    3.1 percentage points.
        Why is the current recovery so weak? Among the timeliest
    explanations is this: With less than one month to go before the
    tax bomb, the nearly $4 trillion tax bomb goes off, Americans
    are facing dire uncertainty. We cannot expect small, mid-size
    or even larger businesses to take on large numbers of
    additional employees when the government is raising the cost of
    employing them gainfully.
        Yesterday's House vote on a bill that is dead on arrival in
    the Senate was a terrible waste of time. I don't mean to be too
    blunt, but it was also I think a dumb economic move. No wonder
    substantial numbers of jobs aren't being created in America.
        And to make matters worse, within a few days the Federal
    Government will run out of money. Congressional Democrats and
    the Administration have not been attending to their
    responsibilities. A frantic rush for band-aid fixes is no way
    to provide guidance to this economy.
        In addition to the looming increases in anti-growth tax
    rates, the out-of-control federal spending, and the enormous
    national debt buildup, I have many times addressed the
    Democrats' ill-conceived health care and energy policies and
    the failed stimulus. I will not repeat those points here, but
    the burdens and uncertainty they create contribute to the
    fundamental reasons why this recovery is not recovering--why
    this economy is not recovering faster.
        If we are to see faster economic growth and more rapid job
    creation, the Administration will have to relent from wasteful
    redistributionist policies and the futile attempt to compensate
    for them with economic pump-priming measures, be they fiscal or
    monetary.
        The government cannot take up positions against business,
    investment, wealth creation, domestic oil, gas, and coal
    production, and free trade and then expect the economy to grow
    based on minimum wage increases, extensions of unemployment
    benefits, and increased subsidies to a number of causes. The
    U.S. economy does not work this way, and I doubt that there are
    any that do. The Administration has been hearing as much from
    national leaders around the world, and I am hopeful it will
    listen.
        Madam Chairwoman, Dr. Hall, I look forward to hearing your
    testimony.
        [The prepared statement of Representative Brady appears in
    the Submissions for the Record on page 25.]
        Chair Maloney. I thank the gentleman for his comments. I
    feel I must respond to some inaccuracies.
        We have made progress during the past year of the Obama
    Administration by adding almost 1.2 million private-sector
    jobs. Compare that to the 8 years of former President Bush,
    when this country lost 663,000 private-sector jobs. Although
    President Bush inherited over a $5 trillion surplus, he left
    with a huge deficit and debt. And indeed, the last month he was
    in office, this country lost over 750,000 jobs.
        The Bush tax cuts did not help the Bush Administration
    create jobs; in fact, overall they lost jobs in his
    Administration.
        With the focus on the economy, we are moving in the right
    direction under President Obama. Just yesterday we passed a tax
    cut to all Americans, and it has now gone to the Senate. We
    have moved the process forward, and we look forward to the
    response of the Senate so we can move forward in a balanced
    direction to create jobs and grow this economy.
        I now recognize the distinguished Senator, the Great
    Senator Klobuchar.

       OPENING STATEMENT OF THE HONORABLE AMY KLOBUCHAR, A U.S.
                         SENATOR FROM MINNESOTA

        Senator Klobuchar. Thank you very much. Thank you,
    Congresswomen Maloney, Madam Chairwoman.
        I want to thank you for your service on this Committee. It
    has really been an honor. And I also would join in with
    Congressman Brady in commending you for the way you have run
    these meetings.
        Congressman Brady, thank you for your leadership. I am
    looking forward to, I hope, continuing to serve on this
    Committee next year. I think there is a lot of good work that
    we need to do when it comes to jobs and the economy, and I
    guess we start here today.
        No one is pleased when we have this unemployment rate. But
    at the same time, I also think the people of this country have
    understood that we could not dig ourselves out of this hole in
    one month; that it was like, someone made the analogy of a
    freight train going 200 miles per hour. The way the Wall Street
    crisis occurred and everything else that happened in this
    country. So there are some glimmers of hope here: the 39,000
    jobs that were added in November to the economy.
        And it is important to note that we are now one month shy
    of one year straight of employment gains in the private sector.
    Of course, none of it is happening as quickly as we would like.
        I was listening to Congressman Brady, and I agree with some
    of what he has said about the exports, trade, some of those
    things, but I will say that we have seen some improvements
    with, for instance, consumer confidence, where it's hit its
    highest level since the financial crisis began with almost 4 in
    10 Americans saying the economy is now on the right track.
        With growing consumer confidence, it is no surprise to
    learn that retail sales surged up 6 percent in November for the
    most promising start of the holiday season in three years. We
    care about this in Minnesota. It is a serious matter. We are
    the home of both Target and Best Buy--I like hawking my
    companies as the holiday season approaches--and they both saw
    some promising lines of customers out there.
        The other piece of this is the fact that there are more
    things that we need to do going forward. I would first of all
    point to the work that needs to be done with exports for small-
    and medium-sized businesses. We've got to start with the small
    business bill. But also, looking at some of the barriers, the
    red tape barriers to come of our most productive industries
    that have the highest potential for exports. I use the example
    of Medical Device, which is largely based in Minnesota, where
    we've seen a 12 percent decline in FDA approvals. And with that
    has come less investment, a third less investment, as well as
    investment going to places in Europe where the safety approval
    processes move more quickly.
        Tourism, I think I see an easy solution there. We have done
    a lot with passing the Travel Promotion Act, so we can finally
    promote our country overseas. Yet, when you find out the
    startling statistic that for people in China who want to get a
    tourist visa to visit our country, it takes 50 days average. If
    they want to go to Great Britain, it takes 10 days.
        Every time a foreign tourist comes to America, they spend
    an average of $4,000. We've lost 20 points in the international
    tourism business since 9/11. Easy solutions are there, in terms
    of improving our processes, so it's easier for tourists to
    visit our country.
        I think those are things that we should be doing and
    looking at as we consider how Washington can truly help to
    create private jobs. The other piece of this, which was
    mentioned by the Congressman, is the unemployment. There are a
    lot of people out there, 15.1 million Americans, who have lost
    their jobs through no fault of their own.
        Bad decisions that were made on Wall Street have resulted
    in them not being able to find jobs on Main Street. So I
    believe that it is very important that we continue making
    unemployment benefits available to these Americans.
        The last thing I would say is, in response to some of
    Congressman Brady's comments about the tax bills that are
    before us, I am very focused on the deficit right now. Today
    the Deficit Commission is coming out with their
    recommendations. I don't think many Members of Congress would
    say they agree with everything in that report--I know I don't.
    But at the same time, I was heartened to see that people from
    diverse political backgrounds, as Senator Durbin who is now
    supporting that report, as well as Senator Conrad and the
    Democratic side now joined by Senator Coburn and Senator Crapo,
    were able to say we need to advance this report and move these
    ideas forward.
        Contained in that report are recommendations along the
    lines of what we are talking about now, about the Bush tax
    cuts. Of course, the middle class needs to have these tax cuts
    continued, given the economic difficulties that we are now
    facing. But when you go up to the upper end, when you even go
    up to, say, the million dollar level, millionaires, people
    making a million dollars a year, they've been getting an
    average of $100,000 back from these tax cuts. And as we look at
    some of the recommendations from the Deficit Commission, I
    think we would be blinding ourselves if we didn't at least look
    at the choice of looking at someone making over $250,000 or
    someone making over $1 million a year, where you can bring in
    either, depending on where you set it, $400 billion over 10
    years on the deficit, or $700 billion if you set it at
    $250,000, that is a chunk of change.
        So as we look at how we are going to get our country out of
    this economic rut, reducing our deficit will be key. It is
    going to add confidence to the markets if we show that we are
    doing something in the long term, and it is certainly going to
    be better for our children who are inheriting this debt.
        So I don't think it is just a Band-Aid to look at where we
    revert to the Clinton levels where, by the way, things were
    much more prosperous in this country. Keeping those Bush
    levels--I just again will emphasize--up to $1 million, imagine
    it. Millionaires would still get the Bush tax cuts up to $1
    million. Then it simply reverts to the Clinton levels. That is
    what this debate is about.
        Thank you very much.
        Chair Maloney. Thank you. I now recognize Commissioner
    Hall--but first I would like to introduce him. He is the
    Commissioner of the Bureau of Labor Statistics for the U.S.
    Department of Labor.
        Dr. Hall also served as Chief Economist for the White House
    Council of Economic Advisers for two years under President
    George W. Bush. Prior to that, he was Chief Economist for the
    U.S. Department of Commerce. Dr. Hall also spent 10 years at
    the U.S. International Trade Commission.
        Thank you very much for your public service, and we now
    recognize you for as much time as you desire. Thank you.

      STATEMENT OF DR. KEITH HALL, COMMISSIONER, BUREAU OF LABOR
       STATISTICS, U.S. DEPARTMENT OF LABOR; ACCOMPANIED BY: MR.
    PHILIP RONES, DEPUTY COMMISSIONER, BUREAU OF LABOR STATISTICS;
    AND DR. MICHAEL HORRIGAN, ASSOCIATE COMMISSIONER FOR PRICES AND
             LIVING CONDITIONS, BUREAU OF LABOR STATISTICS

        Commissioner Hall. Madam Chair and Members of the
    Committee:
        Thank you for the opportunity to discuss the employment and
    unemployment data we released this morning.
        Nonfarm payroll employment was essentially unchanged in
    November, and the unemployment rate edged up to 9.8 percent.
    The jobless rate had been 9.6 percent in each of the prior 3
    months.
        Payroll employment has increased by an average of 86,000
    per month since its recent low point in December of 2009. In
    November, temporary help services and health care added jobs,
    while employment fell in retail trade.
        Temporary help services employment increased by 40,000 over
    this month. Since the industry's most recent low in September
    2009, employment has grown by 494,000.
        In November, health care employment rose by 19,000,
    including a gain of 8,000 in hospitals. Thus far in 2010, the
    health care industry has added an average of 21,000 jobs per
    month, about in line with average monthly growth in 2009.
        Retail trade employment decreased by 28,000 in November,
    including declines in department stores, and in furniture and
    home furnishing stores. Other major service-providing
    industries showed little employment change in November.
        Manufacturing employment changed little over the month.
    Following job growth earlier in 2010, factory employment has
    been relatively flat on net since May. Elsewhere in the goods-
    producing sector, construction employment also changed little
    in November, while mining employment continued to trend up.
        Turning now to measures from the survey of households, the
    unemployment rate edged up to 9.8 percent in November. Of the
    15.1 million persons unemployed in November, 41.9 percent had
    been jobless for 27 weeks or more. That proportion has been
    essentially unchanged since August. Among the employed, there
    are 9 million individuals working part time in November who
    preferred full-time work, about the same as in October.
        The labor force participation rate was unchanged at 64.5
    percent in November. Among those outside the labor force--that
    is, persons neither working nor looking for work--the number of
    discouraged workers in November was 1.3 million, up from
    861,000 a year earlier. These individuals were not looking for
    work because they believe no jobs were available for them.
        In summary, the unemployment rate edged up to 9.8 percent
    in November, and payroll employment was essentially unchanged.
        My colleagues and I would now be glad to answer your
    questions.
        [The prepared statement of Commissioner Hall, together with
    Press Release No. USDL-10-1662, appears in the Submissions for
    the Record on page 26.]
        Chair Maloney. Well thank you, Commissioner Hall. As you
    know, this is my last hearing as Chair of the Joint Economic
    Committee, so I would like you to give us the best news that
    you have. What is the best news that you have on the economy?
        Commissioner Hall. Well, there were industries that did
    grow this month in terms of employment. Temporary help services
    rose 40,000 in the month. Health care also added jobs, about
    19,000 jobs. Transportation and warehousing employment edged
    up. Leisure and hospitality employment edged up.
        And a little-cited number, the Diffusion Index, giving us
    some idea of how many industries are growing employment and how
    many are losing employment, the Diffusion Index was 52 percent,
    was 52 this month. So that shows that more industries are
    adding jobs than are reducing jobs at the moment.
        I see those as sort of the highlights.
        Chair Maloney. Thank you. That's good to hear.
        How does this recovery compare with the recoveries from
    past recessions that were not as deep as this one?
        Commissioner Hall. The last two recessions both had slow
    recoveries relative to other recessions. So far, this recession
    has fallen right in I think with those last two recessions--the
    recoveries from the last two recessions.
        We're probably a little bit ahead of the recovery in the
    2001 recession, but we're a little bit behind the 1990
    recession. And of course recessions prior to that were a bit
    deeper. They've had quicker recoveries than we've had so far.
        Chair Maloney. Is there any evidence that the holiday
    season hiring this year will be merrier than last year?
        Commissioner Hall. Well I would say the early employment
    buildup in October was a little bit ahead of last year. In
    fact, it was a fair amount ahead of last year. But November has
    now fallen back a bit. The employment buildup was a little bit
    less. So I'd say on the whole we're looking, in terms of the
    employment buildup for the holidays, we're looking at about the
    same as last year.
        Chair Maloney. Does it look like over-qualified workers
    will still fill positions that might otherwise have gone to
    less skilled or younger workers? Is that happening in the
    economy?
        Commissioner Hall. It's hard for us to say on that, since
    we sort of count the numbers. So it's not obvious, at least in
    the data we collect, what the answer to that question is.
        Chair Maloney. Could you give us a rundown on demographic
    groups on recovery? How do African American men fare? African
    American women? Hispanic men and women? How are they faring in
    the employment situation?
        Commissioner Hall. Sure. For African Americans, the
    unemployment rate went up a little bit. It's at 16 percent for
    November, which of course is quite a bit higher than the 9.8
    percent overall. For Hispanics it remains at 13.2 percent,
    which is also quite a bit above the average unemployment rate.
        And both unemployment rates are well above the unemployment
    rate prior to the start of the recession.
        Chair Maloney. At an earlier JEC hearing, you reported on
    the high rates of unemployment among women who are the sole
    supporters of their families. Are these women still
    experiencing extremely high rates of unemployment?
        Commissioner Hall. The answer is, yes. The unemployment
    rate for women who maintained families is 13 percent, again
    well above the unemployment rate overall.
        Chair Maloney. And compared to other women who are not
    heads of their families? Is unemployment higher than among
    women generally?
        Commissioner Hall. Well, yes. For adult women the
    unemployment rate is about 8.4 percent, so 13 is quite a bit
    above that.
        Chair Maloney. Okay. Thank you.
        Mr. Brady.
        Representative Brady. Thank you, Madam Chairman.
        Dr. Hall, last month 390,000 Americans were laid off or
    lost their part-time jobs; 15.1 million are now unemployed,
    cannot find work. The Federal Reserve Board has lowered its
    projections for economic growth going forward; so has the Blue
    Chip Consensus.
        I thought it was important for you to acknowledge that
    compared to the severe recession prior to 1990, 1981-1982, that
    that was a much quicker recovery. Because this recovery is very
    subpar, about 2 to 3 times slower than the rate of recovery
    after '81 and '82.
        I think--I'm going to ask you, given how slow job growth is
    going, how many years will it take to get back to the Bush year
    average unemployment of 5.5 percent, very slow?
        One other point I want to make, if I could, I want you to
    think about that answer, is that psychology really plays a key
    role in economic recovery. Yesterday's vote was a good example
    of how to discourage job creation.
        Think about who you are looking to tax. You're going to
    raise taxes on the consumers in the upper income brackets who
    control one out of every three dollars going into our retail
    stores.
        So those most likely to be able to boost consumption will
    be spending a greater--sending a greater portion of their
    dollars to Washington rather than circulating it around in a
    local economy.
        And small businesses, which are the driver of job creation
    in America by far, half of all small business income will be
    taxed under that new law. Not all small businesses--in fact, if
    you just look at, if you count Tax ID numbers, it's only about
    3 percent, those 3 percent are the most productive and actually
    create the most revenue and create the most jobs, half of that
    income will be taxed at a higher rate under those new taxes.
        It's hard to believe that either hammering consumers who
    can help pull us out, or the small businesses that can create
    jobs, is a very good economic move.
        And I also question the myth about that money going to
    reduce the deficit. In the last two years, if you look at the
    seven, technically eight bills, that have gone to the White
    House and been signed by the President that raised taxes, $625
    billion, almost as much as this tax increase they voted to do
    yesterday, $625 billion, can anyone wager how much of that
    money went to reduce the deficit?
        The answer is zero. Not a dollar went to reduce the
    deficit. In fact, they spent all the tax increases and doubled
    it. So it's like being way over your credit card limit. You go
    ask for help to pay it down. Then you take the money and not
    only do you not pay it down, you spend that and twice more to
    add to the deficit.
        So I think most consumers, most of the public understand
    that myth about taxes and the deficit, that money will only go
    to an expanded government. Having said that, again, I'm always
    appreciative of how difficult this economy is, appreciative of
    the low unemployment rate we had prior to President Obama, and
    I'd like to know how long will it take us at this rate, how
    many years will it take us to get back to that 5.4, 5.5 percent
    average?
        Commissioner Hall. I think the way I would characterize
    what is going on right now is we've had steady job growth all
    of this year. And that's good. We've added 951,000 jobs this
    year. But that comes to about 86,000 per month. And because the
    population constantly grows and the labor force constantly
    grows, you need a certain growth in payroll jobs to accommodate
    the growth in the labor force.
        Representative Brady. Is that around 100,000, roughly?
        Commissioner Hall. I would say it's a bit higher. I would
    say you need somewhere around 130,000 plus.
        Representative Brady. To break even?
        Commissioner Hall. To break even. So I would say so far
    this year the 86,000 per month is not enough to start lowering
    the unemployment rate. And I think obviously this month we've
    had the tick up in the unemployment rate. That's reflecting
    that the job growth is not strong enough to start reducing it.
        So it makes it really kind of impossible to calculate how
    long it's going to take, because we're going to need stronger
    job growth to start lowering the unemployment rate.
        Representative Brady. Have there been some projections out
    there that you're aware of?
        Commissioner Hall. No--I tend not to look at them, since we
    deal in the actual data. We stay away from trying to forecast
    this.
        Representative Brady. My sense is that last Christmas time
    when economic growth looked like it was starting to pick up,
    you know, fairly strongly, I think people, economists were
    estimating it would take four to five years. Now that that
    economic growth has slowed by almost half, you know, now we're
    looking at, you know, heading toward hopefully not the end of
    this decade, but the time frame clearly is being extended each
    month. I hope we can come up with the policies that can get us
    not just 130,000 each month, but, you know, a more robust
    200,000 and above in order to get these 15 million people back
    to work.
        Thank you, Dr. Hall.
        Chair Maloney. Senator Klobuchar.
        Senator Klobuchar. Thank you very much, Chair Maloney.
        I always am curious if you see any geographic trends,
    Commissioner Hall, when you look at the United States. I know
    when we were in the midst of this recession we saw that there
    was just a patchwork of which states were doing better, which
    states were doing worse. There wasn't really a regional bias.
        And I wonder if you see any regional differences in terms
    of improvements?
        Commissioner Hall. I'm not sure there's a clear pattern. I
    can give you some idea of where the different regions sit at
    the moment.
        For example, the Northeast Region of the United States, the
    employment is down about 3.8 percent from before the recession.
    That's at the low end. And the West is down about almost 8
    percent. So there are some differences by region. The South is
    down about 4.8----
        Senator Klobuchar. What do you mean by ``down''? That the
    unemployment is down more?
        Commissioner Hall [continuing]. No, I mean the number of
    payroll jobs----
        Senator Klobuchar. Are down, employment is down?
        Commissioner Hall [continuing]. Yes.
        Senator Klobuchar. For the West.
        Commissioner Hall. Yes.
        Senator Klobuchar. Okay.
        Commissioner Hall. Other than that, the State patterns, at
    least certainly month to month, are really hard to
    characterize.
        Senator Klobuchar. And which states have the highest
    unemployment? And I know these numbers lag behind where your
    number is for today.
        Commissioner Hall. Yes, they lag behind a month. So it's
    not too old. Right now the highest unemployment rates are
    Puerto Rico, Nevada, Michigan, and California, Florida, Rhode
    Island, those are all states with particularly high
    unemployment.
        Senator Klobuchar. And the lower unemployment states?
        Commissioner Hall. North Dakota, South Dakota, Nebraska,
    New Hampshire, Vermont. Then obviously there's quite a lot in
    between.
        Senator Klobuchar. Very good.
        Commissioner Hall. There's no obvious patterns.
        Senator Klobuchar. How about small business hiring? Earlier
    this week, Automatic Data Processing reported that of the
    93,000 private-sector jobs they saw added last month, 54,000 of
    the jobs were created by businesses with fewer than 50
    employees. Do you have data that supports that? And does small
    business hiring serve as any kind of an indicator for future
    economic growth?
        Commissioner Hall. Our data on size of business lags behind
    quite a bit. You know, I think our most recent data only has us
    through May, or something like that. So it still lags behind a
    bit.
        The job loss in this particular recession was really spread
    out. A much higher percentage of the job loss was in small
    establishments than in the last recession, for example. And I
    think the recovery so far, at least through the early part of
    this year, a lot of the recovery was in the larger
    establishments and not so strongly in the smaller ones.
        Senator Klobuchar. That would make sense, because our
    unemployment in Minnesota is at 7.1 percent, and we've actually
    seen--we're number one in the country per capita for Fortune
    500 companies now. So that would explain part of why we have a
    lower unemployment rate I think.
        The other thing I wanted to ask about, you mentioned the
    part-time job openings. You know, we found in our state that
    job openings went up 32 percent in September, but 42 percent of
    the openings are for part-time jobs. And you've seen an
    increase in part-time jobs. How many people did you say that
    would like to work full time but are working part time?
        Commissioner Hall. Right now there are almost 9 million
    people who are part time for economic reasons.
        Senator Klobuchar. And what do you see as a trend for that?
        Commissioner Hall. That hasn't changed a lot over the last
    few months. I mean, it's changed a little bit but not a
    significant amount. So that's been sort of holding.
        Senator Klobuchar. And the Veterans numbers? You know, I
    ask you that every month, where those are. I always find it
    disconcerting and discouraging that our Veterans coming back
    from Iraq and Afghanistan have higher unemployment. You and I
    have talked about it before. They left when they were maybe in
    a job, and now that job is no longer there, and so they are put
    at a disadvantage. What are those numbers like?
        Commissioner Hall. The Gulf War Era II Veterans still have
    a higher unemployment rate. It's about 10 percent as opposed to
    9.1 percent for non-Veterans.
        Senator Klobuchar. And has that gotten a little better
    lately? Or is it about the same?
        Commissioner Hall. It actually has--well, it's hard to look
    at this data month to month because the sample size is not
    large, but it's up from about 9.6 percent a year ago. So it is
    still up over the last 12 months.
        Senator Klobuchar. There are some proposals I won't go into
    now to help some of them get jobs and use the skills that
    they've learned, especially with paramedics, those kinds of
    things.
        The last thing I wanted to ask you was: I am still
    concerned, as I know you are, about the number of long-term
    unemployed Americans. I recently got a letter from someone in
    Minneapolis, Jean, who wrote saying:
        I lost my benefits in August. I still have not been able to
    find a job. I don't care about Minnesota's unemployment rate
    being lower. Unemployed is unemployed.
        Do you see any promising signs for the millions of
    unemployed Americans like Jean from Minneapolis?
        Commissioner Hall. I would have to say, unfortunately, the
    very large number of long-term unemployed hasn't made a lot of
    movement. Of the 9.8 percent unemployment rate, 4.1 percentage
    points of that is long-term unemployed. And it's been over 4
    percent for over a year now. And that is an extremely high
    level.
        Senator Klobuchar. So you see my interest in some of these
    longer term competitive issues with the exports, and really
    looking at what are ways that we can get rid of some of the
    obstacles for creating these private sector jobs. Because given
    that 95 percent of our potential customers are outside of our
    country, I really believe that the way we are going to get out
    of this is by making things again, by exporting to the world in
    any big way.
        Because right now we are just kind of hanging in there, it
    seems to me, and are obviously doing much better than we were,
    as the Congresswoman pointed out, a few years ago but still not
    getting to that point that we want to be. Correct?
        Commissioner Hall. Yes.
        Senator Klobuchar. Okay. Thank you, Commissioner.
        Chair Maloney. Thank you, Commissioner Hall. What was
    November's long-term--oh, excuse me, Elijah, I'm sorry. You
    came in and I didn't see you. Elijah Cummings is recognized.
        Representative Cummings. Thank you very much, Madam Chair.
    I know this is your last hearing, and I want to thank you for
    your leadership.
        Chair Maloney. Thank you.
        Representative Cummings. You've done an outstanding job
    addressing the very, very many sensitive issues and difficult
    issues, and the reports and the research that the staff has
    done under your leadership has been extremely helpful to the
    entire Congress, and I want to thank you.
        Chair Maloney. Thank you.
        Representative Cummings. Commissioner, how are you doing?
        Commissioner Hall. I'm doing well, thank you.
        Representative Cummings. Good. What are the current trends
    in worker productivity? And what is the impact of these trends
    on wages?
        Commissioner Hall. The productivity trends have been rather
    high, actually. And, you know, what usually happens after a
    recession, the early stages of a recovery, productivity gets
    very high. In large part I think it is because basically
    businesses bring back labor kind of slowly.
        And that has certainly been happening. The last
    productivity number was well over 2 percent. The productivity
    growth was pretty high. And that has not been reflected in wage
    growth. The wage growth, at least out of this report the
    average hourly earnings I think only grew about well under 2
    percent I think over the past 12 months, which is kind of slow
    growth.
        Representative Cummings. They say that people are--
    companies are now realizing that they can do more with less,
    less people, and do you think that that's part of the problem
    there, too?
        Commissioner Hall. I do think that's part of what's going
    on. You know, I think it's something we can all see when you go
    shopping. You can see that the use of technology has really
    changed, and I think that will be one of the interesting things
    to see when this recovery strengthens is how the job recovery
    goes in areas like retail trade, et cetera, where we have
    obvious productivity improvements.
        Representative Cummings. A group of people I am always
    concerned about are those over 50. What are the unemployment
    trends among workers over that age? And do these older workers
    constitute more of the long-term unemployed? Because that's a
    zone which is kind of a difficult one I guess. Employers I
    guess are not anxious to hire older people, and at the same
    time they end up in that twilight zone.
        Commissioner Hall. Yes. The makeup of the long-term
    unemployed is a concern by age. The older workers, for example,
    55 and above, the mean duration of unemployment is something
    over 30 weeks for those folks, which is higher than any other
    age group.
        And that is probably part of why the long-term unemployment
    rate is so high. And unfortunately the longer somebody is
    unemployed, data shows pretty clearly it takes them longer to
    find work.
        Representative Cummings. You know, there is something else.
    We have got this discussion going on with regard to reducing
    the--I mean increasing the age where people become eligible for
    Social Security. As you do your numbers, I am assuming you are
    looking at people who are retiring. You almost have to, right?
        Commissioner Hall. Right.
        Representative Cummings. Are you finding that people are
    retiring later, or earlier? Would your numbers even yield any
    kind of information like that? Are you following me?
        Commissioner Hall. Yes.
        Representative Cummings. Because the argument I make is
    that in my District a lot of people, by the time they get to be
    60, because of the difficulty of their jobs they almost have to
    retire. But in other situations, people may have a job where
    they are sitting down and, you know, not lifting heavy drums
    and things of that nature, and 70, 72 might be a good age. And
    I am just wondering. What are you finding in that regard? Are
    people retiring earlier because they cannot find jobs? I mean,
    what are you finding going on there? Would you have any
    information on that?
        Mr. Rones. What we have seen, actually even throughout the
    recession, is that the older folks are actually staying in the
    labor force longer, as opposed to dropping out.
        Representative Cummings. Okay.
        Mr. Rones. I am sure there are quite a number of reasons
    for that. One is that if you have a job, that job is precious
    and you would tend to hold onto it. But of course a lot of
    people have lost a lot of asset value in their homes and their
    stocks, and so financially it might have been more difficult to
    retire than they might have planned 10 years ago.
        That is really the only group whose labor force
    participation rate has been increasing over the last few years.
        Representative Cummings. Interesting. So under normal
    circumstances, while they might not be counted when you look at
    unemployment, you are seeing at least a slight increase in the
    number of people who are in the pool to be employed now? Is
    that right?
        Mr. Rones. That's right. And so among those people in the
    labor force, of course there has been a growing share that were
    unemployed. That is, that kept looking for work. So some of
    that labor force--by our definition, ``the labor force'' are
    people who are working and those who are unemployed. So some of
    those people are unemployed. But it could be that in other
    periods people would have just, after a certain period of job
    search, they would have just left the labor force, what you
    might call discouraged workers. Now it seems that people are
    more likely to persevere, and so they become, as Commissioner
    Hall said, they become long-term unemployed. That is, they
    continue to look for work where in other periods--well, also in
    other periods they might have been able to retire because, as
    you know, a number of years ago private pensions were much more
    common than they have become now. We are much more dependent on
    the 401(k) type of arrangements, rather than the traditional
    pension.
        Representative Cummings. I see my time has expired. Thank
    you, Madam Chair.
        Senator Klobuchar. Madam Chair, could I just have a point
    of clarification?
        Chair Maloney. Yes.
        Senator Klobuchar. I really appreciate Representative
    Cummings's focus on some of these deficit issues and the Social
    Security. I share his concerns about the age.
        I just want to point out that, as the Deficit Commission is
    coming out with their report, that actually that
    recommendation--because there is so much misinformation out
    there--people who have to be 28 years or younger to have that
    recommendation affect in any kind of increase in the age at
    which you could get Social Security. They have to be 28 or
    younger right now.
        In addition to that, I just think it is worth looking at,
    it also increases the benefits for people when they reach a
    certain age that are older. So I know there is a lot of talk
    about that right now, and I always think it is important to get
    the facts straight, and it is worth looking at that
    recommendation. And of course the focus is to shore up Social
    Security.
        Thank you.
        Chair Maloney. Thank you.
        Commissioner Hall, what was November's long-term
    unemployment rate? In other words, what was the share of the
    civilian workforce that was out of work for 27 weeks or more in
    November?
        Commissioner Hall. It was 4.1 percent.
        Chair Maloney. And what was the highest long-term
    unemployment rate in the past when Congress failed to renew
    Federal Unemployment Benefits?
        Commissioner Hall. Would this be June of 1985? Is that the
    time period?
        Chair Maloney. Well that is what I believe it is, but I am
    asking you.
        Commissioner Hall. My data says I think that it is June of
    1985----
        Chair Maloney. Yes, it is.
        Commissioner Hall [continuing]. I just wanted to make sure
    I am correct.
        Chair Maloney. The chart shows June of 1985 at 7.4 percent
    unemployment.
        [Chart titled ``In Past Economic Downturns, the
    Unemployment Rate Was Far Lower When Congress Allowed Federal
    Unemployment Benefits to Expire'' appears in the Submissions
    for the Record on page 66.]
        Commissioner Hall. The long-term unemployment rate was only
    1.1 percent at that time period.
        Chair Maloney. And can you put these numbers into context
    for me? How many long-term unemployed workers are there now
    versus in the past when we failed to extend unemployment
    benefits?
        Commissioner Hall. Well the number right now is about 6.3
    million. I have the unemployment rate, but I don't think I
    have--we will look up the number for 1985.
        Chair Maloney. Do you have it?
        Commissioner Hall. Yes, we do. It was about 1.3 million, as
    opposed to 6.3 million.
        Chair Maloney. And what share of the unemployed were long-
    term unemployed in November versus in the past when federal
    benefits were stopped?
        Commissioner Hall. Well the share of the unemployed that
    are long-term unemployed right now is about 42 percent. We have
    got this.
        Chair Maloney. Thank you.
        [Pause.]
        Commissioner Hall. It was about 15 percent.
        Chair Maloney. Thank you very much.
        Mr. Brady is recognized.
        Representative Brady. Thank you. Let the record note that
    every person under 28 in the room sat up straight after Senator
    Klobuchar talked about the Social Security reforms. But I do
    think it has been helpful for the Deficit Commission to make
    the point that, as life expectancy grows over decades and
    decades, the Social Security age will have to be adjusted at
    some point. But you're talking 30, 40 years in that process.
        A couple of thoughts. I think obviously construction and
    manufacturing are major parts of our economy. We were told with
    the Stimulus Bill that we would see the most job gains in
    manufacturing and construction. But my understanding from your
    remarks is that manufacturing has been flat since the spring,
    in May. Construction employment has also changed little. As
    well, mining employment is up a little bit. Construction and
    manufacturing is not. What happened to all those shovel-ready
    jobs?
        Commissioner Hall. Well I can just tell you where the
    trends were, and I think you fairly characterized the trends in
    the payroll jobs.
        Representative Brady. Energy is obviously a key part of our
    economy. Earlier this year, a terrible BP spill I think
    revealed weaknesses in spill control. But a drilling moratorium
    was put in place pretty hastily over the objections of
    scientists and those who understood energy exploration.
        We have had a shallow-water exploration drilling moratorium
    that continues in many ways because permits simply are not
    being granted to get those workers back to work. Deep-water has
    had an amazing safety record as well over the years, over the
    decades, yet drilling permits still are not being granted
    there.
        Are we continuing to lose--did we continue to lose energy
    jobs in November?
        Commissioner Hall. Let me see here.
        Representative Brady. My sense is it was around 2,000 jobs.
        Commissioner Hall. Yes. We have got mining and logging
    here. I may actually have something a little more detailed.
    Yes. In mining we gained about 4,000 jobs overall.
        Representative Brady. Energy?
        Commissioner Hall. Right. That would be mining of all
    sorts, oil and gas extraction, support activities for mining,
    et cetera.
        Representative Brady. I think I've got oil and gas
    extraction, minus 2,000 jobs?
        Commissioner Hall. Yes, the oil and gas extraction was
    minus 2,000, that's right. But support activities for mining
    may include some things, and that gained 5,500.
        Representative Brady. Petroleum was down 20,000 jobs--no,
    200 jobs is all. So it stayed flat as well. Thank you.
        I know we continue to push the Administration to get these
    energy workers back working. Energy jobs are not expendable in
    America, especially with so many people out of work.
        It is the holiday season. I wish we had better news today,
    but again I want to reiterate and thank you for the work that,
    Commissioner, you and your group do.
        And again, thanks for the leadership of Chairwoman Maloney
    throughout the past two years. It has been a fascinating time
    in our economy. We are all looking for those green shoots as
    positive signs. I know through the next session we will
    continue to do so, as well.
        Chair Maloney. I hope so. Thank you.
        Mr. Cummings.
        Representative Cummings. Just a few questions. You know I
    always ask you the Presidential question. That is, that if the
    President came to you right now and said: ``Commissioner Hall,
    how would you describe the situation? And what do you think we
    should be doing? I mean, are we on the right course?'' How
    would you see this situation, to summarize your report, and
    what would you say to the President?
        Commissioner Hall. Well----
        Representative Cummings. You were ready for that question,
    right? You know I always ask you that.
        [Laughter.]
        Commissioner Hall [continuing]. Well, in terms of looking
    backwards, I think we have had relatively steady job growth
    this year. We have had about 951,000 jobs this year, which is
    good. But the job growth just has not yet strengthened enough
    to start lowering the unemployment rate.
        While it is not unprecedented to have this long period here
    where we are sort of waiting for strong job growth to come on,
    we are going to have to have stronger job growth to start
    putting people back to work and lowering the unemployment rate.
        Representative Cummings. And the other question is that, if
    somebody is looking at this and they are saying I realize I may
    not be able to get a job any time soon, what are my best
    prospects for getting a job? What kind of retraining do I need
    to do? You know, what would you say? In what region of the
    country do I need to be in?
        Commissioner Hall. In terms of sort of the long term job
    prospects, you know, obviously a lot of the service sectors
    like health care, et cetera, are likely to grow over time in
    the next 10 years with our changing demographics. I think that
    in particular.
        There are probably a number of other industries which I do
    not have off the top of my head right now, but we did do some
    long-term employment projections by occupation near the
    beginning of the year. If you like, we can take a look at that
    and summarize some of that for you.
        Representative Cummings. I would love to have that.
        [Letter transmitting Commissioner Hall's response to
    Representative Cummings appears in the Submissions for the
    Record on page 67.]
        Again, I want to thank you, Commissioner, and Mr. Rones,
    and Mr. Horrigan, for all of your hard work. You all have
    helped us tremendously, and I thank you so much. I know
    sometimes you are unseen, unnoticed, unappreciated, and
    unapplauded, and sometimes you bring messages that people do
    not necessarily want to hear, but we do appreciate you. We also
    appreciate the staff that is behind it, the office that's
    looking at us right now, I guess, and we wish you a happy
    holiday.
        And again, Madam Chairman, thank you for your leadership.
        Chair Maloney. Thank you so much.
        This is my last hearing as Chair of the Joint Economic
    Committee. In the last two years, we have had the opportunity
    to examine a whole variety of critical issues that are vital to
    our future and to our country's economic well being.
        In the wake of the Great Depression, this Committee was
    established by the Employment Act of 1946. It seems appropriate
    that the first hearing and the last hearing of this Congress
    have been on the employment situation.
        Dr. Hall, we want to thank you and your team and your staff
    for all of your hard work, for appearing before the JEC each
    month, for your professionalism, and for your public service.
    Thank you.
        Commissioner Hall. Thank you.
        Chair Maloney. I would also like to thank the other members
    of the JEC. I have valued your insights and have thoroughly
    enjoyed our spirited exchange of ideas.
        I would like to especially thank Vice Chairman Schumer,
    Ranking Member Brownback, and Senior Republican House Member
    Mr. Brady. Thank you.
        While this is the last JEC hearing of the 111th Congress, I
    will be issuing at least one more report before the end of the
    year. As the first woman chair of the Joint Economic Committee,
    I have asked the Majority staff to prepare a comprehensive
    overview of women and the economy. I have asked the staff to
    focus on how unleashing women's economic potential will help
    fuel our recovery.
        I look forward to releasing that report before I hand over
    the gavel to the next Chair. Again, I thank all of the members
    of this Committee, and thank you very much, Dr. Hall. Thank
    you.
        Commissioner Hall. Thank you.
        Chair Maloney. This meeting is adjourned.
        [Whereupon, at 10:33 a.m., Friday, November 3, 2010, the
    hearing of the Joint Economic Committee was adjourned.]
                           SUBMISSIONS FOR THE RECORD

     Prepared Statement of Carolyn Maloney, Chair, Joint Economic Committee
        Today's Employment Report from the Bureau of Labor Statistics shows
    the economy added 50,000 private sector jobs last month, making
    November the eleventh straight month of employment gains in the private
    sector.
        Since the beginning of the year, the economy has added 1.2 million
    jobs in the private sector. Private payrolls grew by an average of
    79,000 jobs per month in the first quarter of 2010, 118,000 jobs in the
    second quarter, and 124,000 jobs in the third quarter.
        While job creation has picked up, the unemployment rate remains
    unacceptably high. This morning's employment report showed that the
    unemployment rate edged up to 9.8 percent in November.
        In addition to overall private sector job gains,

          GDP grew by 2.5 percent in the third quarter of 2010 due
    to stronger consumer spending. This is the fifth consecutive quarter of
    growth.

          Retail sales have risen steadily for the past 4 months.
    Excluding the more volatile sales of cars and gasoline, retail sales
    have increased steadily since June.

          Surveys of both the service sector and the manufacturing
    sector show that growth is expected to continue.

        When I became Chair of the JEC in January 2009, the economy was
    still reeling under the shocks of the Great Recession.
        As CEA Chair Christina Romer pointed out at one of our hearings
    last year, our economy endured shocks during the 2007 recession that
    were even greater than those experienced during the Great Depression.
        During the past two years, this Committee has closely monitored the
    employment situation and tracked its rebound.
        We have held close to 50 hearings and issued over 40 reports.
        In 2010, consistent with its mission to monitor the employment
    situation of the country, the Joint Economic Committee focused on job
    creation, holding hearings on problems in the labor market and
    solutions to spur employment.
        Job creation was also the central focus of the JEC annual report,
    our mandated analysis of the Economic Report of the President released
    earlier this year.
        While the economic shocks of the Great Recession will take time to
    heal, our economy has made substantial progress in the past year.
        The policies that Democrats in Congress quickly put into place over
    the last year are working.
        Policies DO matter.
        We passed the HIRE Act, which provides a payroll tax credit for
    businesses that hire unemployed workers.
        We passed legislation to promote hiring by smaller businesses--the
    engines of job creation in our economy--providing additional tax
    incentives to them, helping them access credit, and raising the cap on
    SBA 7(a) loans from $2 million to $5 million.
        We extended aid to states to pay for their increased Medicaid
    costs. We provided additional funding for teachers.
        The Department of Education estimated that 140,000 teacher jobs
    were saved because of this increase in funding.
        We passed legislation to help our domestic manufacturers by
    reducing their tariffs.
        One of the most important things we did for the 40 percent of
    unemployed workers who have been out of work for 27 weeks or longer is
    to extend unemployment benefits for them.
        The most recent extension did not raise the number of weeks that
    unemployed workers could receive benefits; but it did reauthorize the
    program so that unemployed workers could continue receiving those
    critical benefits.
        But we are aware that the latest extension of unemployment
    insurance benefits ran out this week.
        For most of the unemployed, the expiration of these benefits will
    mean that unemployment benefits will stop as soon as they enter their
    27th week of unemployment--at a cruel time when more than 40 percent of
    the unemployed have been out of work at least 27 weeks.
        If Congress does not act quickly to renew these benefits, nearly 2
    million unemployed workers will lose their benefits during the holiday
    season.
        Although preliminary reports show a bump up in consumer spending on
    Black Friday and Cyber Monday, the loss of unemployment benefits will
    have a significant impact on retail spending in the weeks and months to
    come.
        Prematurely ending the federal unemployment insurance benefits
    program will drain the economy of $80 billion in purchasing power and
    cost the economy up to a million jobs over the next year.
        According to the nonpartisan Congressional Budget Office,
    unemployment benefits are one of the most effective tools for boosting
    economic growth and employment.
        Allowing the federal unemployment insurance program to expire when
    the unemployment rate is well over 9 percent would be unprecedented and
    inconceivable.
        Congress never cut off benefits when the pain was this great.
    Previously, Congress has never let benefits expire with an unemployment
    rate above 7.4 percent.
        There are 5 unemployed workers for every job opening. Moreover,
    fewer than 1 in 10 unemployed workers looking for work for a year or
    more is likely to find a job in the coming months.
        This is a tragic time to break from precedent--it is unfair to the
    millions of families counting on these benefits, and unwise for an
    economy that is still recovering from the Great Recession.
        I hope that we can count on our Republican colleagues in both
    chambers to do the right thing and vote to maintain the current federal
    unemployment insurance program.

                Prepared Statement of Representative Kevin Brady
        Today we hold the last regularly scheduled employment hearing with
    the Bureau of Labor Statistics in the 111th Congress. Like all
    Americans hoping for an economic turnaround, this has been a difficult
    two years for members of the Joint Economic Committee with employment
    reports month after month showing large numbers of our fellow Americans
    out of work and stubbornly high rates of unemployment. But the focus of
    this Committee on the employment situation is a critical part of its
    function as no other aspect of the nation's economic wellbeing is more
    important than the ability of our citizens to find productive work.
        Dr. Hall has had the difficult task of presenting the many reports
    on the bleak employment conditions to us. He has done so in a
    professional and insightful manner. I want to thank him and his staff
    at the Bureau of Labor Statistics for the effort they make to compile
    the employment data in meaningful ways and for answering our questions.
    I welcome Dr. Hall again this morning.
        Chairwoman Maloney has held many additional hearings on various
    aspects of the labor market. I want to thank the Chairwoman for her
    compassion and dedication in setting the Committee's agenda. We
    appreciate her leadership. I also want to thank Vice Chairman Schumer
    for his contributions to the JEC.
        Senator Brownback will be leaving the U.S. Senate next year to
    assume his new duties as the governor of the state of Kansas. I
    sincerely thank him for his service as the ranking member on this
    committee during the 111th Congress and congratulate him on his new
    leadership position. All the best to you, your family, and the state of
    Kansas, Sam.
        As we approach the end of the year and of this Congress, the
    national employment picture unfortunately remains bleak. The
    unemployment rate increased to 9.8 percent mainly due to an increase in
    the number of job losers. And this month's 39,000 increase in payroll
    employment was very disappointing given the expectations. Worse still
    is the fact that we have lost 101,000 payroll jobs since the recession
    officially ended 17 months ago.
        Economic indicators generally tell us that we are making a
    painfully slow recovery. In November, total payroll employment was not
    significantly different than it was 17 months ago when the recession
    officially ended. Unfortunately, this recovery is too weak and private
    sector job growth too slow to reduce the unemployment rate appreciably,
    while the federal work force thrives. In contrast, by the 17th month of
    the Reagan recovery after the severe 1981-82 recession, total payroll
    employment had increased by 5.0 million, and the unemployment rate had
    fallen by 3.1 percentage points to 7.7 percent.
        Why is the current recovery so weak? Among the timeliest
    explanations is this: within less than one month Americans are facing a
    nearly $4 trillion tax hike. We cannot expect small, mid-size or even
    larger businesses to take on large numbers of additional employees when
    the government is raising the cost for employing them gainfully.
        Yesterday's House vote on a bill that is dead on arrival in the
    Senate was a waste of time. I don't mean to be too blunt, but raising
    taxes on the consumers and small businesses we depend on the most to
    put this economy back on track is a dumb economic move. No wonder
    substantial numbers of jobs aren't being created in America.
        To make matters worse, within a few days the federal government
    will run out of money. Congressional Democrats and the Administration
    have not been attending to their responsibilities. A frantic rush for
    band-aid fixes is no way to provide guidance to the economy.
        In addition to the looming increases in anti-growth tax rates, the
    out-of-control federal spending and the enormous national debt built-
    up, I have many times addressed the Democrats' ill-conceived health
    care and energy policies and the failed stimulus. I will not repeat
    those points here, but the burdens and uncertainty they create
    contribute to the fundamental reasons why the economy is not recovering
    faster.
        If we are to see faster economic growth and more rapid job
    creation, the Administration will have to relent from wasteful,
    redistributionist policies and the futile attempt to compensate for
    them with economic pump-priming measures, be they fiscal or monetary.
    The government cannot take up position against business, investment,
    wealth creation, domestic oil, gas, and coal production, and free trade
    and expect the economy to grow based on minimum wage increases,
    extensions of unemployment benefits, and increased subsidies to a
    plethora of causes. The U.S. economy does not work that way, and I
    doubt there are any that do. The Administration has been hearing as
    much from national leaders around the world.
        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.
        Nonfarm payroll employment was essentially unchanged in November
    (+39,000), and the unemployment rate edged up to 9.8 percent. The
    jobless rate had been 9.6 percent in each of the prior 3 months.
    Payroll employment has increased by an average of 86,000 per month
    since its recent low point in December 2009. In November, temporary
    help services and health care added jobs, while employment fell in
    retail trade.
        Temporary help services employment increased by 40,000 over the
    month. Since the industry's most recent low in September 2009,
    employment has grown by 494,000.
        In November, health care employment rose by 19,000, including a
    gain of 8,000 in hospitals. Thus far in 2010, the health care industry
    has added an average of 21,000 jobs per month, about in line with
    average monthly job growth in 2009.
        Retail trade employment decreased by 28,000 in November, including
    declines in department stores (-9,000) and in furniture and home
    furnishings stores (-5,000). Other major service-providing industries
    showed little employment change in November.
        Manufacturing employment changed little over the month. Following
    job growth earlier in 2010, factory employment has been relatively
    flat, on net, since May. Elsewhere in the goods-producing sector,
    construction employment also changed little in November, while mining
    employment continued to trend up.
        Average hourly earnings of all employees on private nonfarm
    payrolls were up by 1 cent in November to $22.75. Over the past 12
    months, average hourly earnings have risen by 1.6 percent. From October
    2009 to October 2010, the Consumer Price Index for All Urban Consumers
    (CPI-U) increased by 1.2 percent.
        Turning now to measures from the survey of households, the
    unemployment rate edged up to 9.8 percent in November. Of the 15.1
    million persons unemployed in November, 41.9 percent had been jobless
    for 27 weeks or more. That proportion has been essentially unchanged
    since August. Among the employed, there were 9.0 million individuals
    working part time in November who preferred full-time work, about the
    same as in October.
        The labor force participation rate was unchanged at 64.5 percent in
    November. Among those outside the labor force--that is, persons neither
    working nor looking for work--the number of discouraged workers in
    November was 1.3 million, up from 861,000 a year earlier. These
    individuals were not looking for work because they believe no jobs are
    available for them.
        In summary, the unemployment rate edged up to 9.8 percent in
    November, and payroll employment was essentially unchanged.
        My colleagues and I now would be glad to answer your questions.