For the first time in more than a quarter century, unemployment in the United States has reached double digits.
That’s bad economic news for America, which has now been shedding jobs for 22 consecutive months.
That’s bad social news for the Americans who are out of work, for their families and for their communities, especially when we consider data that tells us 35 percent of jobless men and women have been looking for work for more than six months.
And that’s bad political news for President Barack Obama and the Democrats in Congress, who continue to make the mistake of treating unemployment as an afterthought rather than the most serious issue facing the nation.
Now that the United States has an official double-digit unemployment rate, the Obama administration and Democratic leaders in the House and Senate need to adjust approaches in order to make job creation their primary focus.
To do otherwise is to risk political disaster in 2010.
That may sound like an overarching statement.
But the president and his allies face an overarching challenge.
Not since 1983, when Ronald Reagan was in his first term, has the jobless rate gone over 10 percent. And in 1983, the unemployment rate was on a downward trajectory, while in 2009 it is rising.
Indeed, unemployment is rising faster than Obama aides, key members of Congress or top economists anticipated. Many had held out hope that the rate of increase would be slowed sufficiently to keep the official figure in single digits — thus avoiding the psychological wallop that that comes with the headline that say “one in 10 Americans are out of work.”
With the release of federal figures for the month of October, however, official unemployment now stands at 10.2 percent.
The official figure does not include millions of Americans who have given up looking for work in the midst of the deepest economic downturn since the Great Depression, and millions more who are underemployed. Factoring in those numbers, the real unemployment rate is closer to 17.5 percent.
But the official figure is bad enough.
When the federal government acknowledges the “one-in-10” reality, people get scared, and rightly so.
Modeling by social scientists confirms what we instinctually know: As unemployment rises, the reality gets closer to home and even those who are employed start to fret.
The fretting can have a serious impact on the economy.
It can also have a serious impact on politics.
In New Jersey, a state that Barack Obama won easily in 2008, Democrats lost the governorship in 2009. What was the top issue on the off-year election day according to exit polls? Jobs and the economy. Thirty-one percent of voters ranked the issue as the most pressing, compared with just 18 percent who cited health care.
In Virginia, another state where Obama won easily in 2008, the Democratic nominee for governor lost in a landslide this year. A remarkable 83 percent of voters told exit pollsters they were worried about “jobs and the economy”. Roughly half of voters said it was their top concern, while barely half pointed to health care.
This does not mean that the president and his congressional allies should abandon the push for health care reform. Obama is right that, in the long term, health care reform is essential to economic progress; America cannot continue to steer more and more of its GDP into the accounts of profiteering insurance companies and expect to experience meaningful growth in employment or prosperity.
But a singular or even dominant focus on health care — or any project other than job creation and retention — is now politically dangerous.
It is not just in New Jersey or Virginia where economic fears related to job losses rank as the top issue. Those are merely the states where a formal political measure was taken this fall.
If anything, the rising unemployment rate is an even bigger issue in states such as Wisconsin, Michigan, Indiana, Ohio and Pennsylvania, where Obama won in 2008 and where Democrats grabbed House and Senate seats from the Republicans at a fast clip in the 2006 and 2008 election cycles.
Concerns about the economy powered those Democratic advances in 2006 and 2008. Indeed, the top issue that correlated with Democratic wins in House and Senate races was not the war in Iraq, health care, social policy or generalized anger with George Bush. It was opposition to free-trade policies that are now broadly blamed for shuttering factories and outsourcing jobs.
The November 3, 2009, off-year elections were a mixed bag for Democrats, mainly because in many instances around the country the Republicans were either at war with one another or more generally struggling to get their act together.
But in New Jersey and especially in Virginia, where Republican candidates in high-profile races focused tightly on economic issues and job creation, they won.
That is the reality of 2009.
The reality of the 2010 congressional elections that will define the second half of Barack Obama’s first term has yet to be determined.
But one thing is certain: If unemployment continues to rise, it will be the only issue in key congressional districts and states across the country next year. Nothing else that the president or his congressional allies talk about will matter.
For economic, social and politic reasons, Democrats need to remake themselves as the party of jobs. If this requires a new stimulus plan with more money for job-creating infrastructure and development programs, Democrats cannot afford to be cautious. If this requires a radical alteration in trade policies and the abandonment of the absurd strategy for bailing out GM and Chrysler — which calls for shuttering more than two dozen plants across the United States – Democrats cannot afford to hesitate.
Of course, corporate Republicans and the faux Republicans of the Democratic Leadership Council will scream about the expense and about the rejection of the economic orthodoxies of Alan Greenspan and the other jokers who got us in this mess. But if Obama, Nancy Pelosi, Harry Reid and their compatriots listen to the counsel of the cautious as unemployment hits 12, 13 or 14 percent, they will fail the American people doubly.
The first failure will be a social one. If unemployment is allowed to rise into the mid-teens, families and communities across this country will experience a human crisis of daunting proportions.
The second failure will be a political one. High unemployment will remake the electoral landscape into an “Alice-in-Wonderland” fantasyland. Republicans who (assisted by some notable Democratic allies) laid the foundations of the current crisis — with misguided tax breaks for the rich, warped spending priorities and fundamentally-flawed trade policies — will be able to position themselves as pro-jobs populists. And Democrats will be stuck defending an indefensible status quo. That’s a guaranteed loser for Obama and his congressional allies, who will see their House and Senate majorities slashed if not obliterated by an understandably angry electorate.