South By North Strategies, Ltd.

Around the Dial – Dec. 7

Economic policy reports, blog postings, and media stories of interest:

• The Winston-Salem Journal looks at the recovery package’s local impact.
• The Washington Post’s op-ed page revisits welfare reform.
• The New York Times says it is time for “a Plan B for mortgages.”
• The Brookings Institution asks about food stamp use in the suburbs.

Innovation in North Carolina

Innovation plays an essential role in economic growth, yet less well understood is just  how innovation works and how an innovative climate can be fostered . To bring some clarity to those issues at the state level, a group of civic leaders in North Carolina recently launched Change Papers, a blog that strives to generate a discussion about how North Carolina can become more innovative.

Recent papers have focused on what government can learn from the private sector, how open-source models can generate new ideas, and how innovation can be fostered.

Right to the Point

An article in the current issue of The Economist offers a to-the-point assessment of the state of the American job market and the policy choices facing federal leaders:

Even though the economy is growing again, this picture is unlikely to change quickly. The hangover from the financial bust means the recovery will be muted. And much as they did after the 1990-91 and 2001 recessions, nervous employers are working remaining staff harder before hiring new ones. Labour productivity has soared, but the result could be a poisonous combination of deep recession followed by jobless recovery. The Federal Reserve’s latest forecasts suggest a jobless rate above 8% in 2011, and half a decade or so until the economy returns to full employment.
…
The economic scars could be deep. Evidence from Europe suggests that long spells of high joblessness leave a country’s underlying unemployment rate permanently higher, as workers lose skills, becoming detached from the labour force and increasingly hard to re-employ. For America’s young and black workers, especially, that is a big worry.
…
This grim trajectory suggests an economic, as well as a political, rationale for government action. But what sort? The administration’s original approach was to boost employment by underpinning demand with fiscal stimulus. And for all the criticism of the $787 billion stimulus package, there is little doubt that the jobs picture is less dire than it would have been without it. A report released on November 30th by the Congressional Budget Office suggests it created or saved somewhere between 0.6m and 1.6m jobs. Yet with voters increasingly worried by trillion-dollar budget deficits, that route is harder. The new focus is less on supporting demand than on policies that increase the job-intensity of the recovery.

Weekend Wonk Out

A round-up of policy reports from the week ending on 12/4:

• The NC Budget & Tax Center summarizes county-level economic data.
• The San Francisco Federal Reserve asks what has been learned from the crisis.
• The Center on Budget and Policy Priorities explains the basics of the Food Stamp program.
• The Pew Center on the States looks at state budget shortfalls.
• The Economic Policy Institute has a jobs plan.

National Employment Situation

New national employment data show that November was the 22nd-straight month in which the economy shed more jobs than it added. Last month, 11,000 positions were lost, and 10 percent of the labor force was unemployed.

In November, the nation’s employers eliminated 11,000 more payroll positions than they added. Also, revisions to the September and October data revealed that the economy lost fewer positions than first reported.

Last month, 15.4 million Americans – 10 percent of the labor force – were jobless and actively seeking work. Proportionally more adult male workers were unemployed than female ones (10.5 percent versus 7.9 percent). Similarly, unemployment rates were higher among Black (15.6 percent) and Hispanic workers (12.7 percent) than among White ones (9.3 percent). Additionally, employment participation levels were the lowest ones recorded since the mid-1980s.

Click here to read South by North Strategies’ analysis of the November employment report.