Dean Baker

Recent Articles

Good News: Job Openings In January Almost Up to February 2009 Level

Yep, the good news according to the headline of the USA Today article is that the Bureau of Labor Statistics reported that job openings in January were at their highest level since last February of 2009. That would be the month when the economy lost 726,000 jobs. The numbers are going in the right direction -- it's good to see the number of job openings increase. And the number of layoffs and discharges fell to 1,890,000, the lowest level since April of 2008, a month when the economy shed 149,000 jobs. But we still have a long way to go before we are going to see healthy job growth. These numbers must be put in context. --Dean Baker

The Post Give Dana Milbank an Opportunity to Show That He Knows Zero Economics

Those who favor affirmative action for people with no discernible skills undoubtedly appreciate Dana Milbank's page 2 column in the Washington Post. Today Mr. Milbank used his column to tell the world that he knows absolutely nothing about economics. The theme of the piece was that in ten years the United States will be like Greece. He discusses the trip to the United States of Greek Prime Minister George Papandreou seeking support for his country during its current fiscal crisis and tells readers: "if current trends persist, an American president will be doing the same thing in about 10 years." The article goes on: "He or she will probably be in Beijing, asking for more favorable interest rates or pleading with the Chinese government to keep speculators from betting on an American default." Okay, now let's imagine that Milbank had taken an econ class at some point. Suppose speculators were betting heavily against the dollar. The value of the dollar would be plummeting. If China still...

What Is "Heavy Investment" in Education, Clean Energy and Scientific Research?

In an article about the increasing number of people receiving long-term unemployment benefits the Post told readers that to have a labor force suited for the jobs of the future: "the Obama administration has tried to address that by investing heavily in education, clean energy and scientific research." Actually, the Obama administration's investments in education almost certainly don't even offset the state and local cuts in spending forced by the recession. Its heavy investment in clean energy and scientific research is dwarfed by its spending on the war in Afghanistan. --Dean Baker

Instant Lie Detector Test: Small Business Hiring Delayed by Uncertainty

There is a line being pushed by some on the right (e.g. David Brooks today ) that small businesses are putting off hiring because of uncertainty over the costs they may face from health care reform, global warming restrictions, or other tax and regulatory changes. It is understandable that small businesses would be reluctant to commit themselves to having another employee on the payroll if we were in a country like Italy or Spain where permanent employees have a substantial degree of employment protection. Employers in these countries (and most other wealthy countries) cannot simply lay off workers any time they choose. However, if we live in the United States, we know that employers here can lay off anyone they want, any time they want, with no restrictions whatsoever. This assumes that there is not a union contract, which is the case for 93 percent of private sector employees and close to 100 percent of employees of small businesses. Suppose that we have a conscientious small...

WSJ Gets Carried Away With Optimism on Jobs

I was one of the economists who thought the February jobs report was relatively good given the weather. Still, that was only compared with an expectation of a very bad report. The WSJ went a bit overboard with a headline: "Outlook Brightens for Jobless." The report still showed a loss of 36,000 jobs. It is certainly possible that if we remove the effect of the weather, that the number would have been a small positive, but this is nothing to write home about. The economy has to generate about 125,000 jobs a month just to keep even with the growth of the labor force. No one thinks the economy would have created that many jobs in February even if the weather had been great. Given the severity of the downturn, we should be seeing job growth in the neighborhood of 300,000 to 400,000 a month. There is no plausible story that gets us there any time soon. And, there are many downside risks with the withdrawal of supports for the housing market, state and local government cutbacks, and the...