Washington is hardly alone in the continuing jobs crisis. California lost 29,200 jobs in May (vs. our loss of 700). According to the U.S. Labor Department, 27 states and the District of Columbia lost jobs, 22 saw modest gains and one state was unchanged. In April, 42 states gained jobs. This is what happens with 1.8 percent GDP growth in the first quarter, on top of many other job-killing factors already in place.
One reader emailed me and said Washington’s problem was simply high taxes and too much regulation. Perhaps. Unfortunately, many low-tax, light regulation states also have very high U-6 unemployment, including Nevada, Arizona, Florida, North Carolina and South Carolina. High-reg, high-tax New York, Massachusetts and Connecticut have relatively low U-6. Texas is a petroleum power, and still has a state fiscal crisis and some of the worst performance in measures of social well-being in the nation.
I suppose one way to look at it is that Washington would be far worse off without booming Boeing, a recovering software sector, Amazon, ports and trade, the ag economy benefiting from high prices, etc. But the mismatch between certain high-skilled positions doing well and the rest remains high. And the economy is just growing too slowly to create many net new jobs. As for “austerity,” government cutbacks and failure to invest in infrastructure are job killers, and the private sector is not picking up the slack.
Some of the week’s best links:
- Reuters’ Felix Salmon wades into the debate, arguing that philanthropy can’t be outsourced to the profit motive.
- For a laugh, be sure to check out the YouTube video, “Whole Foods Parking Lot.”
- And you thought a riot was un-Canadian. What if our neighbors to the north are working on a housing bubble? The average price for a detached house in Vancouver? $1,223,421.
- While we dawdle with a crumbling 1970 transportation system, China is expanding its high-speed rail ambitions to the rest of Asia.
- Workers’ share of national income is collapsing. Scary.
- Is the debt-ceiling debate dangerous? PIMCO’s El-Erian says, oh, yeah.
- So how’s austerity working out for the British economy? One more sign that the answer is disastrously.
- What do you get with money-driven health care? Ranked 37th worldwide by a new study in the New England Journal of Medicine.
- Is tort reform really the key to bringing down health costs? The evidence says…no.
Today’s Econ Haiku:
Greece, what’s the big deal?
Those hidden counter-parties
Banksters never learn