Off the Charts Blog | Center on Budget and Policy Priorities

My latest post for U.S. News & World Report’s Economic Intelligence blog addresses conservative critics’ argument that SNAP (the Supplemental Nutrition Assistance Program, formerly food stamps) is “broken” and must be “reformed.”  In reality, as our recent blog series shows, SNAP expanded as it’s supposed to during the severe recession of 2007-2009 and subsequent slow recovery and will shrink as the economy improves.

But why, as critics note, did SNAP enrollment continue rising after 2009, even as unemployment began to fall?  Because, it’s not unusual for poverty and hardship to continue rising even after unemployment peaks.

Moreover, the last few years have been very different from a typical recession and recovery, as our Legacy of the Great Recession chartbook shows.  The unemployment rate thus has been a relatively poor indicator of the state of the labor market, for two reasons in particular.

First, the unemployment rate doesn’t include the many people who want a job and would likely have one in a stronger labor market but haven’t looked enough to count as officially unemployed.  Nor does it include the many people who would like to work full time but can only find part-time work.

The graph below, which highlights the share of the population with a job (the so-called employment to population ratio), paints a grimmer picture of what’s happened to employment.  Part of the sharp decline reflects higher unemployment, but the rest reflects a decline in labor force participation.

The Labor Department estimates that 22 million Americans who want to work either don’t have a job or are working only part-time when they want to work full-time.

Second, the unemployment rate doesn’t tell us about long-term unemployment — those out of work for at least 27 weeks — which remains historically high (see second graph).  With the deep and prolonged recession and weak recovery, SNAP has become increasingly valuable for the long-term unemployed, since it’s one of the few resources available for people who have exhausted their unemployment benefits.

In short, the number of people qualifying for and receiving SNAP benefits is still high because unusually high unemployment, reduced incomes, and limited job opportunities all persist.  The best way for policymakers to lower SNAP costs would be to aid the economic recovery to create jobs and boost incomes.

“While the high jobless numbers are partly a legacy of the Great Recession, the fact is that our economy has generated too few jobs for most of the last 30 years and is likely to continue to do so,” CBPP Senior Fellow Jared Bernstein writes in a New York Times op-ed on why full employment should be a central goal of domestic policy.

Here’s an excerpt:

What would it take to reverse these trends? For one thing, in the near term, do no harm. Austerity, including sequestration, is the economic version of medieval leeching. The Federal Reserve continues to apply high doses of monetary stimulus, and that’s supporting low interest rates, which in turn are linked to the improving housing market. But it can’t do it alone, and Congress is counteracting such tailwinds with fiscal headwinds.

We also need a significant, permanent program to absorb excess labor (an explicit part of the Humphrey-Hawkins law). We should consider restarting and rescaling a subsidized jobs program from the 2009 Recovery Act that, though relatively small, made jobs possible for hundreds of thousands of workers.

And we have to reassess our manufacturing policy, including reducing the trade deficit. That means both reshaping our dollar policy — going after competitors who suppress their currencies’ value to get an edge on net exports — and public investments in areas where clean energy intersects with production.

Finally, financial deregulation has become the enemy of full employment: it funnels capital to unproductive parts of the economy, and plays a key role in the “shampoo cycle” of bubble, bust, repeat. Less volatile capital markets mean fewer shocks to the job market.

Click here for the full op-ed.

Today’s jobs report shows that labor markets still bear the scars of the Great Recession despite 38 straight months of private-sector job growth and a drop in the unemployment rate from 7.9 percent to 7.5 percent since January. Unemployment remains stubbornly high and many people who would likely have a job in a stronger economy are not even looking for work. Consequently, the share of the population with a job remains well below what it was over the two decades before the recession started in December 2007.

Below are some charts to show how the new figures look in historical context. Check here for my full statement with further analysis.

Today’s jobs report suggests that state and local public job losses may be leveling out, a more hopeful picture than last month.  States and localities gained a modest 7,000 jobs in March and have cut 28,000 jobs over the last 12 months, a much smaller amount than in recent one-year periods.  But states and localities will need much more than a few months of modest job gains to recover fully from the recession.

The country has 718,000 fewer state and local government employees than in August 2008, when employment peaked before the recession took hold (see graph).

This means fewer teachers, child abuse caseworkers, firefighters, and police officers ― at a time when needs remain high.  And the large-scale loss of public-sector jobs has slowed the nation’s recovery, just as private-sector job losses have.

Whether states and localities begin to recover depends in part on federal policymakers.  If they allow the “sequestration” budget cuts to remain in effect and even extend beyond this year, states and localities will lose federal funding for schools and other services, forcing more layoffs and service reductions.

And if policymakers impose even harsher cuts in funding for states and localities, as would occur under the House-passed Ryan budget, states and localities will lose even more jobs.

Today’s jobs report, with disappointing job growth and a large drop in the labor force, shows that a robust jobs recovery remains elusive. That situation won’t likely improve in coming months as the sequestration budget cuts begin to slow the economic recovery and make it harder for the unemployed — especially the unprecedented numbers of long-term unemployed (see chart) — to find a job. Adding insult to injury, sequestration also cuts federal unemployment insurance (UI) benefits for the long-term unemployed.

Below are some charts to show how the new figures look in historical context. See my full statement with further analysis.