Unemployment in November fell to its lowest level since March 2009, dropping from 9 percent to 8.6 percent. We continued added private sector jobs at more or less the same pace, with 140,000 new ones in the private sector offset by 20,000 jobs lost in the public sector. In a normal month, that would just about enough gain overall to keep up with population growth.
But if we’re adding jobs at a steady rate rather than an amazing one, why did the unemployment rate drop at such an impressive amount? It’s so many people quit looking for work. Unemployment measures the portion of the workforce that cannot find work. If you drop out of the workforce, you stop counting. Bloomberg puts it this way:
The decrease in the jobless rate reflected a 278,000 gain in employment at the same time 315,000 Americans left the labor force.
In other words, the unemployment rate looks much better, and we did add jobs, but we may not actually have gotten anywhere. The politics of the economy, however, are changing.
On the eve of last month’s unemployment report, Senate Democrats forced Republicans’ hand on a jobs bill – $50 billion in infrastructure spending to rebuild the country and create jobs. The idea has support from 80 percent of Americans, but Republicans voted it down. Who knows if it’ll work in the long run, but the plan clearly is to set the GOP in opposition to the interests of most voters.
Last night, again the eve of an unemployment report, Senate Democrats forced Republicans’ hand again. This time Democrats got the GOP to vote against continuing the payroll tax cut for working Americans. Republicans objected because it would have been paid for by raising taxes on the rich. Jackie Calmes of the New York Times reports that Democrats believe the payroll tax is how they’ll win in 2012:
With Mr. Obama leading the charge in Washington and political swing states, Senate Democrats have put proudly antitax Republicans in the position of opposing a tax cut for more than 160 million mostly middle-class Americans because they object that it includes a tax on about 350,000 people, those with more than $1 million in annual taxable income.
It’s the many against the few – 160 million working Americans compared to 350,000 who are making bank. Given the amount the rich can spend on elections now, the many against the few may not be the soul of politics, but it’s still the soul of democracy.