[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
__________
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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.