Mary Bottari has a good post on the Federal Reserve Bank’s role in the ongoing financial bailout. The media and voters have focused on the Troubled Asset Relief Program (TARP) legislation passed in a hurry late in 2008. But, as Bottari emphasizes, the TARP is only a minor part of the federal bailout of the banks. As she writes: “TARP funds were a mere seven percent of total funds disbursed by federal government to aid the financial sector since 2007 … the more we focus on the much-despised TARP, the less we see the invisible hand of the Fed doing the heavy lifting.”
The most important elements of the government intervention on behalf of the financial sector have been Fed actions: low interest rates and Fed asset purchases. Rock-bottom interest rates have allowed banks to borrow money from the Fed at close to no cost and then to lend those funds to the Treasury at a several-percent, zero-risk, profit. (Maybe we should allow unemployed workers to form “banks” like these. It would take a lot of pressure off state unemployment insurance systems.)
The Fed has also purchased a lot of troubled assets from financial institutions, helping to clear those bad loans from the private sector’s balance sheets in quantities that dwarf the Bush administration’s TARP.
Where I differ from Bottari is on the implications for taxpayers. She argues that the Fed’s actions put taxpayers at risk. But, even if every asset the Fed bought suddenly lost all its value, US taxpayers need not be on the hook for any of the losses. The Fed has limitless ability to print money. The only risk here is that the Fed’s actions increase the money supply and that this results in inflation. But, as with other discussions of Fed policy (quantitative easing, for example), the challenge we face now is deflation, not inflation, so the risks are slight.
The spirited and principled rejection of the tax cut compromise by progressive Democrats in Congress is as welcome as it is unexpected. The deal between the White House and the Republicans , as Bob Borosage of Campaign for America’s Future observed, was “far more a deal to keep the economy from slowing than to get it going.” Facing negotiations with a nihilistic Republican leadership, avoiding a complete stalemate in which workers lost much needed unemployment insurance benefits, the Bush tax cuts for the middle class were rescinded, and low-income working families lost the expanded earned income tax and child tax credits seemed to be as much as could be hoped for.
The price exacted by the Republicans was steep: extension of the Bush tax cuts for the top 2% of households, exemption from inheritance taxes for estates up to $5 million dollars and a 35% maximum rate on estates in excess of that amount, and a 15% maximum tax rate on income from dividends and capital gains. As progressive Democrats in Congress have made clear, tax breaks for the wealthiest Americans are not only unconscionable but they make no economic sense. The Congressional Budget Office ranks these types of tax cuts as among the least effective ways to increase growth and jobs.
All the happy talk from the Administration and some economists about the boost to growth and jobs from the tax cut deal is just that – happy talk. Allowing tax cuts for the middle class and unemployment benefits for the long-term unemployed to expire would reduce incomes and are contractionary; letting them continue, however, does not raise incomes in January above where they were in December so these policies provide no additional stimulus to the economy. Very little in the tax package provides a stimulus. It is surprising, therefore, that Mark Zandi told reporters that he expects the tax compromise to add as much as a full percentage point to economic growth in 2011, bringing it to 4%. He also expects the unemployment rate to be under 9%, approaching 8.5% by the end of the year. This seems far too optimistic; based on this and other analyses, the Administration is once again overpromising what its policies can deliver.
But there is actually more to hate about the deal the White House struck with the Republican leadership than just the giveaway of tax cuts to the wealthy. Replacing the Making Work Pay Credit with a payroll tax cut is bad policy on multiple grounds. The MWP is a credit of up to $400 for workers earning less than $75,000 a year, with workers making as little as $5,000 a year receiving the $400. With the payroll tax cut, a worker would have to earn $20,000 a year to get a $400 tax break. Workers earning less than $20,000 would see their taxes rise, while those making over $20,000 would get a further tax reduction, obviously a bad deal for low-income workers. The most insidious aspect of the payroll tax cut, however, is that it threatens the idea that Social Security is sacrosanct, a reality so important to the economic security of the nation that the taxes that support it should never be tampered with.
The tax cut deal makes up the lost tax revenues from the partial payroll tax holiday out of general tax revenues. It would be far better to simply mail every working person and social security recipient a check from the Treasury out of general tax revenues – something I have advocated for in the past and that was done by both Presidents Clinton and Bush to deal with recession.
Congressional Democrats have already changed the terms on which future negotiations between the White House and the Republican leadership will proceed. Progressives in Congress will do a great good for the country if they succeed in getting a better deal with Republicans. But in their criticisms, they should also note the cynical way in which hysteria over the deficit and the debt has been promoted, and the willingness of the White House and the Republicans to jettison these concerns to make sure the wealthy get to keep their tax cuts. Talk of spending cuts to “pay for” extending middle class tax cuts and unemployment benefits must be met by progressive Democrats with the same vigorous opposition that greeted the tax breaks for the wealthy. As long as household spending and business investment remain weak and 25 million workers are unemployed or underemployed, spending by the federal government that raises the deficit and the debt poses no danger to the economy. On the contrary, short-term increases in the deficit and debt are essential to creating jobs and a growing economy.
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Eighteen consecutive months. That’s how long unemployment has been over 10.5 percent.
Officially, the worst spell of unemployment since the Great Depression came in 1982-83. Unemployment peaked in November and December of 1982 at a whopping 10.8 percent of the labor force. By contrast, the official rate of unemployment is only 9.8 percent, having peaked last October at 10.1.
So how can I say unemployment has been over 10.5 percent for a year and a half?
The official unemployment rate is a fine statistic as far as it goes. As unacceptable as 9.8 percent unemployment is on its face, it understates the historical depth of trouble in the labor market today. The U-6 alternative measure of unemployment is at 17.0 percent—more than 1 in 6 workers who have not completely dropped out of the labor force are unemployed or underemployed. Only 58.2 percent of the population age 16 and over are employed — the lowest rate of employment since the summer of 1983.
The tax cut deal between the White House and Congressional Republicans would reduce the payroll tax rate on employees by 2 percentage points (from 6.2 percent to 4.2 percent) for one year in 2011, but fails to extend the more progressive Making Work Pay tax credit. Authorized for tax years 2009 and 2010 in the Recovery Act, the Making Work Pay tax credit provided a refundable tax credit of up to 6.2 percent of earned income, capped at $400 ($800 for joint returns), for taxpayers with adjusted gross incomes below $95,000 ($190,000 for joint filers).
Because the payroll tax cut isn't capped, most tax filers (about 58 percent of those who benefit, according to the Tax Policy Center's preliminary estimates) will receive a greater benefit from it than they would have under the Making Work Pay credit. However, about 42 percent of tax filers will pay more in taxes in 2011 than they would of had the Making Work Pay Credit been extended. The chart below shows the average difference in taxes that workers will pay by income level.
The deal would extend three other fairly targeted tax benefits for certain low-wage workers that were included in the Recovery Act: 1) an increase in the EITC phaseout threshold for married couples filing jointly; 2) an increase in the Earned Income Tax Credit (EITC) for families with three or more children; and 3) allowing families with income between $3,000 and roughly $13,000 to receive a refundable Child Tax Credit. These extensions are a good thing, but it's worth noting that low-wage workers without children don't benefit at all from them, and that the EITC more generally provides only a tiny benefit for workers without children (and none at all for those under age 25 or over age 65). In fact, for minimum wage workers without children (and even many with children), the current combined amount of earnings and the EITC that they receive today is substantially lower than the minimum wage earnings alone that they received in 1979.
Instead of cutting payroll taxes directly, a better deal would extend the Making Work Pay tax credit and increase the cap to $600. If the misguided payroll tax cut stays in (for more on why it shouldn't, see this post by Dean), Congress should at least double the size of the EITC for workers without children (the maximum benefit is currently only $457) and extend it to workers under age 25 and age 65 or older, or adopt a partial restoration of Making Work Pay in a way that targets the benefits to workers with below-median incomes.
In a holiday season given mostly to Scrooge-like proposals for deficit reduction and belt-tightening that can only make recovery from the recession more difficult to achieve, the tax deal the White House struck with Congressional Republicans has what passes for virtue these days – it doesn’t make things worse.
Had the White House not reached this deal with the Republicans, about $700 billion in tax cuts and unemployment insurance benefits would have expired over the next two years, a cut in business and household after-tax incomes equal to about 2.5 percent of GDP each year. This is a hit the economy could ill afford.
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The extreme polarization of income and wealth in the U.S. has had a corrosive effect on the body politic. In this season that celebrates human generosity and compassion, our representatives in Washington could not muster the votes to reauthorize extended federal unemployment before the program expired on November 30.
This, despite the fact that for workers, the Great Recession is far from over. Yet, Congress and the administration appear ready to accede to Republican demands that tax benefits for the wealthiest 2 percent of households be extended. The job situation is grave. Unemployment remains near 10 percent of the labor force, and 15.1 million workers are unemployed, nearly 42 percent for more than 26 weeks. Job creation is anemic, and there are still five unemployed workers for every job opening. And that’s just considering official unemployment. Counting everyone who wants a fulltime job and doesn’t have one brings the number of unemployed and underemployed to more than 25 million Americans.
Despite this job outlook, Congress failed for the first time in 60 years to provide extended unemployment benefits during a period of high unemployment. Some 800,000 workers began losing their benefits at the stroke of midnight on November 30. If no action is taken, the Department of Labor estimates this lifeline will be cut for 2 million unemployed workers by the end of December.
Unemployment crept up to 9.8 percent after the economy added just 39,000 jobs in November, according to the latest Bureau of Labor Statistics' employment report. One notable finding in the report: The retail trade lost 28,100 jobs in November, with a decline of 14,500 jobs in general merchandise stores leading the way. The November drop in retail employment suggests that sales were inflated by an early holiday season — with stores beginning their hiring in October instead of November. This should dampen the optimism around the relatively good November sales figures released this week.
The data in the establishment survey offer little hope of the labor market improving anytime soon. With perhaps the exception of employment services, which saw modest job growth, there is no sector showing strong growth. Furthermore, average weekly hours actually fell slightly for non-supervisory workers, suggesting the demand for labor might actually be weakening. With house prices again dropping rapidly and additional cutbacks coming at all levels of government, there are no obvious engines of growth in this economy.
University of Chicago economist Casey Mulligan has a post on the New York Times Economix blog comparing the US and French tax systems. He argues, correctly, that the US tax system is almost certainly more progressive than the French tax system.
Our tax system is more progressive than most European systems because we raise a lot of government revenue through a progressive federal income tax. Europeans meanwhile rely much more heavily on regressive payroll and value-added taxes.
But, beyond that simple economic observation, Mulligan makes claims that are innaccurate and misleading.
The first problem is that Mulligan looks at only one side of the ledger –taxes– and not the other –government expenditures. What matters to people is not their income after taxes, but rather their income after taxes and transfers (including government services such as health care). Europeans, rich and poor, pay higher taxes than we do here, but they also receive much higher levels of government transfers, from more generous unemployment insurance benefits to subsidized day care to universal health care. These transfers, in cash and services, are generally highly progressive. The net result is that the European tax-and-transfer systems are substantially more progressive than our tax-and-transfer system, even though our tax system, on its own, is more progressive than the typical European tax system.
We have our own experience of this phenomenon in the United States with Social Security. The payroll tax used to finance Social Security is fairly regressive. Every worker pays Social Security tax at the same rate (12.4 percent, employee plus employer contribution) on the first $106,800 earned, and then no tax at all on earnings above that cutoff. As a result, in percent terms, the Social Security tax rate paid by workers making more than $106,800 per year is lower than the rate paid by, say, a worker earning the federal minimum wage (about $14,500 per year for a full-time, full-year worker). Nevertheless, Social Security is a strongly progressive program once the progressive retirement benefits (and survivor and other benefits) are factored in.
A second problem with Mulligan’s piece is that it subtly suggests that the choice Americans face is between big but regressive (in a fiscal sense) government, on the one hand, and small but progressive (again, in a fiscal sense) government, on the other.
Within our own system, the “big” federal government is financed overwhelmingly by progressives taxes (the federal income tax), while our “small” state and local governments are financed largely (and increasingly) by regressive taxes (such as sales and property taxes). In the United States, “smaller” government is the threat to our progressive tax structure, not “big” government. And, of course, Mulligan’s conservative political allies have pushed relentlessly to reduce the progressivity of the federal tax system. Conservatives have, for example, long championed replacing the progressive federal income tax with a single-rate “flat-tax” that would likely be highly regressive in practice. If they have their way, we won’t have a small, but progressive, tax system; we’ll just have small and regressive.
The Fed released most of the data on its special lending facilities yesterday. (We are still waiting for fuller information on the collateral that was posted.) The world did not end. In fact, there is no evidence that the release of the data created any economic or financial disruptions whatsoever.
This is not surprising, since there is no reason that informing the public about what the Fed did with their money should create financial disruptions, however this is exactly what Fed Chairman Ben Bernanke and others argued when they originally objected to the release of this information. The origins of this release are in an audit the Fed bill that had Ron Paul as it original sponsor. He was later joined on the left by Alan Grayson and Bernie Sanders, as the leading proponents of the bill.
The idea that the Fed should be held accountable to the Congress and the public was originally treated as a crank notion pushed by extremists who did not understand modern finance. Well, the data are now public and there has been no implosion. Yet again, it turns out that the cranks were right, and those in positions of authority were either ill-informed or lying.
The following highlights CEPR's latest research, publications, events and much more.
CEPR Talks Back to the Co-Chairs of the Deficit Commission CEPR Co-Director Dean Baker issued a statement following the recent release of the draft of the President’s Deficit Commission Co-Chairs report. Dean questioned the logic behind many of the spending cut proposals in the draft, including the lack of attention paid to long-term health care costs, the main factor behind the rise in future deficits. Dean also points out that Social Security is actually outside the mandate of the commission. He reiterated these thoughts in a piece in theNew Republic.
CEPR on the US Election… CEPR Co-Director Mark Weisbrot’s McClatchy News column, “Failure to Enact Bigger Stimulus Was Fatal Mistake” appeared in dozens of U.S. newspapers. In the article, Mark points out that “the overwhelming reason for the Democrats’ losses was their failure to take the necessary measures to ensure a robust recovery from the recession.” He also discussed the implications for the 2012 election in his Guardian column as well as in an interview with The Real News.
The economist Dean Baker calculated that the yearly tax increase at the lower end of that bracket, for those with earnings between $200,000 and $500,000, would amount to $700 — which “isn’t enough to hire anyone.”
The New York Times' deficit-reduction calculator is worth playing around with, though the Center for a Responsible Federal Budget's calculator is more comprehensive, and the calculator from the Center for Economic and Policy Research works harder to include policies that are too often left out of the mainstream debate. But they're all good, clean fun, and they all make the same basic point: It's the health-care system, stupid.
...In some ways, my favorite budget calculator is an older one released by the Center for Economic and Policy Research. This calculator doesn't give you any viable choices. Instead it allows you to plug in the per-capita health-care spending of other countries and then see what happens to our deficit. I've looked at this dozens of times, and I still find it startling: If we spent what high-performing, fully universal systems like France and Germany spend, we'd have no budget deficit.
Even worse, Geithner reiterated that the U.S. "will bring our fiscal position back to a sustainable balance."
Loosely speaking, our national income is equal to what we produce in any given year-- that is, GDP (Y). GDP may be broken down into private consumption (C), private investment (I), government consumption and investment (G), and trade surplus-- exports minus imports (X-M).
If we take national savings (S) to be income which is not consumed, then S=Y-(C+G)=I+(X-M). If "we haven't saved enough" then by definition we have insufficiently invested or we have too large a trade deficit. There is no escape from the iron grip of elementary mathematics.
In turn, national savings may be private or public, where public savings is taxes minus government spending. If the private sector suddenly decides to save more-- as they did with the collapse of the housing bubble-- then the public sector must save less. That is, budget deficits must rise.
As a matter of pure accounting, there are exactly the two ways to avoid large government deficit. One is for private investment to rise. Unfortunately, unemployment is at 9.6 percent and capacity utilization is low. Businesses have no incentive to invest in more capital when they have existing capital already going to waste. The only other way to avoid increasing government deficits is to increase net exports. Econ 101 says the dollar must fall relative to other currencies in the world.
So when unemployment is high, capacity utilization is low, and devaluation is unprincipled, what is left to do to increase national savings? Declare war on algebra?
As for Geithner, he has a little more wiggle room, reportedly declaring that the fiscal consolidation will wait until the recovery strengthens. Currently, CBO projects unemployment to average 9 percent next year and finally fall below 8 percent... sometime in late 2012.
There has been a serious effort by many on the right to claim that public sector workers are overpaid. The typical way that critics make this argument is to simply compare the average wage of workers in the public sector and the private sector. This comparison does indeed show that public sector workers are paid more than private sector workers.
However, this comparison is highly misleading, as any serious analyst would quickly acknowledge. Public sector workers on average have more on-the-job experience and are far more likely to have college degrees (think teachers and nurses) than the workforce as a whole. Several analyses have compared the pay of public sector workers with their private sector counterparts and found that private sector workers actually enjoy a small pay premium. (For example, see the studies from the Center on State and Local Government Excellence, the Center for Economic and Policy Research, and the Economic Policy Institute.)
Andrew Biggs, an economist at the American Enterprise Institute, has responded to these studies by arguing that public sector workers are still overpaid, if we properly account for the cost of public sector pensions. Biggs argues that these studies failed to note that public pension funds currently have large shortfalls. This means that current contributions for pensions, which were used in the recent comparisons of public and private sector compensation mentioned above, are the inappropriate measure.
Biggs argues that an accurate analysis would include the additional contributions needed to make up the pension shortfalls. In the case of the state of California's pension funds, which have one of the largest shortfalls, Biggs calculates that factoring in the under-funding of the pension would increase a 2 percent wage premium for public sector workers to a 10 percent premium.
But, there is a serious problem with this analysis. The main reason that public pensions are under-funded is not that states have grossly underpaid for their workers pensions. Rather, the problem is that state and local pension funds got zapped by the stock market plunge and the economic crisis. If state and local pension assets had grown at just a 5.0 percent nominal rate (modest by histrical standards) from their levels at the end of 2007, they would stand at more than 3.6 trillion today, 41.3 percent above their actual level at the end of the second quarter of 2010. This would leave the pension funds close to being fully funded.
In short, pensions are facing shortfalls today because they were hit by bad luck. We can ask why the pension funds were so foolish as to not recognize the risks of investing with Wall Street. For what it is worth, some of us did try to warn them. But, this bad luck has nothing to do with the workers’ pay. It is like saying that a cancer patient is overpaid because his employer-paid health insurance plan spends lots of money on cancer treatment. The issue is not the actual payment for the specific worker’s health care. The relevant question is how much should we have reasonably expected pensions to cost the government. By this measure, the state contributions are a reasonably good estimate.
So, this boils down to yet another case of the Wall Street crew trying to use the disaster that they themselves generated to force cutbacks in the living standards of ordinary workers. File it under “what did you expect?”
The ad campaign of course is intended to promote more redistribution. It is about taking away the Social Security benefits that ordinary workers have already paid for in order to keep down the taxes paid by the Peter Peterson Wall Street banker types.
The great part of the story is that Peterson's crew claims that taking away workers' Social Security will help their children and grandchildren. That might fool a highly paid Washington pundit, but not anyone who works for a living.
As anyone who ever looked at the Social Security Trustees Report or the Congressional Budget Office's projections knows, we can easily afford Social Security. What we can't afford is the endless thievery of the Peterson Wall Street crowd.
USA Today has a big, front-page story today reporting that the "number of federal workers earning $150,000 or more a year has soared tenfold in the past five years and doubled since President Obama took office."
The piece provides a lot of useful numbers, but is short on context. As written, headlined, and positioned in the paper (the biggest story in the paper today), I'm concerned that the story will be used primarily as ammunition to argue that federal workers are overpaid.
First, some of the key numbers in the piece are not adjusted for inflation. The chart accompanying the text shows the share of workers who made more than $150,000 per year in 2005 --in 2005 dollars-- and then shows the share who made more that $150,000 per year in 2010 --in 2010 dollars. Even if federal salaries had not increased at all in inflation-adjusted terms over those years, salaries would have been about 12 percent higher in 2010 than they were in 2005 (that was how much inflation there was between 2005 and 2010). This would have pushed workers who were as much as 12 percent below each of the various salary cutoffs above those cutoffs, even if there had been no increase in their after-inflation pay. This effect may or may not be important here, but it is impossible to tell from these data. At the very least, USA Today should have noted that the figure did not adjust for inflation.
The White House and Monster.com, the job search website, teamed up yesterday to launch a new initiative to save the job market. According to Monster.com, the goal is to let job seekers have a voice in the debate.
Here’s a better idea - how about providing workers who are currently employed with more employment security and a greater chance of keeping their jobs?
The U.S. is a dynamic market economy that both creates and destroys millions of jobs every month. Job growth has been anemic over this recovery because nearly as many jobs have been killed each month as have been created. According to numbers released this morning by the Labor Department, 4.2 million people were newly hired in September 2010, while 4.2 million quit, retired, or were let go by their employer. About half of these, between 1.8 and 2.6 million workers each month over the last year, are laid off or discharged by their employers – about 24 million workers a year.
In the next month we will see reports from three commissions on what we should do about the budget deficit. The remarkable aspect of these commissions is that they are composed entirely of people who were unable to see the $8 trillion housing bubble, the collapse of which wrecked the economy. In fact, the commission members think that their prominent role in driving the economy to ruin makes them especially qualified to tell the rest of us what we should do with Social Security, Medicare, and other key programs.
There is no reason that we should have affirmative action for ignorance.
Someone who could not see the onset of the biggest economic disaster in 70 years obviously has little grasp of basic economic relationships.
These are not the sort of people who should be setting economic policy.
Furthermore, the timing of these reports are an incredible insult to the American people. We have elections to decide items like the future of Social Security and Medicare. If the members of these commissions were acting in good faith they would have issued their reports three months ago with the goal of having them feature prominently in the election debate.
Instead these commissions hope to act in the darkness, pushing their agenda among inside Washington circles outside of the view of the electorate. Congress should absolutely do nothing on any of these commission reports until at least January when the new Congress takes power. Then, it can have committee hearings and have the issued aired in full public view. That is the way things work in a democracy.
This article originally appeared on POLITICO's Arena Digest.
In the early years of the past decade, two hard-line Cold Warriors, closely associated with radical Cuban exile groups in Florida, occupied strategic positions in the U.S. foreign policy machine. Otto Reich, former head of the Reagan administration’s covert propaganda operations in Central America, and Roger Noriega, co-author of the 1996 Helms-Burton Act, took turns running the State Department’s Bureau of Western Hemisphere Affairs and held other influential administration posts such as ambassador to the Organization of American States and White House Special Envoy to the Western Hemisphere.
During their years of tenure in the George W. Bush Administration, they led a zealous crusade against left-leaning governments in the region and, among other things, actively supported a short-lived coup d’Etat against Venezuelan President Hugo Chavez in 2002 and a successful coup against President Jean-Bertrand Aristide of Haiti in 2004. Ultimately, their extreme views and outrageous antics on the international stage proved to be too much of an embarrassment even for the Bush Administration, and they both eventually were relieved of their government jobs well before the end of Bush’s term.
Now, as a result of the Nov. 2 elections, another duo of a similar ilk is poised to re-set the legislative agenda on Latin America in the House of Representatives. Cuban-American representative Ileana Ros-Lehtinen is expected to replace Howard Berman as chair of the House Foreign Affairs Committee and eternally tanned Congressman Cornelius McGillicuddy IV -- otherwise known as Connie Mack -- is slated to take the reins of the Foreign Affairs Subcommittee on Western Hemisphere.
The Washington Post’s Jackson Diehl has enthusiastically celebrated the ascension of these two South Florida legislators, heralding Ros-Lehtinen as a “champion of Cuban human rights” and stating triumphantly that “one big un-American loser” of the US legislative elections will be Cuban president “Raul Castro.” To see whether there is in fact cause to celebrate, let’s have a closer look at the track records of our two protagonists.
The economy added 151,000 jobs today, twice the consensus forecast. Relative to the experience since December 2007, when the recession officially got under way, that is great news. But, we have dug ourselves into a very deep hole and the potential labor force continues to grow every month as the population grows.
As Tessa Conroy and I pointed out in a CEPR report (pdf) this summer, even if the economy were to create jobs at a rate of 166,000 per month –the job creation rate in the weak expansion of the 2000s and about 10 percent faster than today’s number– we would not return to the December 2007 employment level until March 2014 and we wouldn’t return to the December 2007 unemployment rate until 2021.
The unchanged unemployment rate today — at 9.6 percent, where it has basically been since May — is a stark reminder that we need high and sustained job creation to bring the unemployment rate down.
The economy added 151,000 jobs in October, the biggest increase since May, but the employment-to-population (EPOP) ratio still fell by 0.2 percentage points to 58.3 percent, according to the latest Bureau of Labor Statistics' employment report. The pace of job growth is about 50,000 above what is needed to keep even with the growth of the labor market. However, at this rate it would take more than 15 years to make up the job shortfall from the downturn. At least the economy is moving in the right direction.
The decline in the EPOP, which is just above the 58.2 percent low reached in December of last year, was primarily due to a falloff among whites. The EPOP for white men fell by 0.4 percentage points to 67.7 percent, just 0.3 percentage points above the low hit last December. The EPOP for white women fell by 0.3 percentage points to 53.3 percent, a new low for the downturn and the lowest EPOP for white women since October of 1993. By contrast, blacks saw a modest increase in their EPOP from 51.7 percent in September to 52.4 percent in October. In the report for September, the EPOP for black men aged 20 and over had fallen 0.5 percentage points in the month and 2.6 percentage points for African-American teens.