An eye-popping 257,000 private-sector jobs were added in January. The unemployment rate went down to 8.3 percent, down from 8.5 percent in December. The unemployment rate for African-Americans dropped to 13.6 percent, a drop of over 2 percent from December. The big drop may have been more — have more to do with a new computation on total Black population than such an actually large reduction.
MR. MARTIN: We begin with the latest jobs report released Friday. An eye-popping 257,000 private-sector jobs were added in January. The unemployment rate went down to 8.3 percent, down from 8.5 percent in December. The unemployment rate for African-Americans dropped to 13.6 percent, a drop of over 2 percent from December. The big drop may have been more – have more to do with a new computation on total Black population than such an actually large reduction.
Joining us from Princeton, New Jersey, to talk about that and more is former White House economic advisor and current Economics and Public Affairs professor at Princeton University Cecilia Rouse.
Cecilia, welcome back to “Washington Watch.”
DR. CECILIA ROUSE: Thank you very much. Happy to be here.
MR. MARTIN: All right. Let’s get right into these numbers. Clearly, 16 consecutive months of overall job growth in the country, [unemployment] down 8.3 percent. How important is this? Is this a true sign this – our economy is sluggish, but we’re digging our way out of the rut that we saw take place in 2008 and 2009?
DR. ROUSE: I think this jobs report is definitely good news. If you had looked and read what analysts were expecting just yesterday, they were expecting that December rel- — was overly optimistic and, therefore, we could expect that January would be even more disappointing. And so I think what this reflects is that we’re seeing real recovery. As you mentioned, it’s still a little bit more sluggish than we would help, or ex- — you know, really hope for, and I think there’re still risks out there; but nonetheless, I think this is absolutely a good report.
MR. MARTIN: One of the things that jumps out: 50,000 of those jobs were in manufacturing. We’ve heard for so long that manufacturing jobs were going overseas. We’re n- — we were not going to see the kind of growth. And so how do you explain that? Are we seeing a resurgence in America of manufacturing jobs?
DR. ROUSE: Well, I think if you look at this employment report, there were gains – it was – i- — there were gains across many sectors. It was very broad-based, and I think what it suggests is that our economy is recovering wholesale. That also means manufacturing. Manufacturing had taken a very large decline in the recession, and I think many people forecasted that it would be coming back to some extent. And I think what this reflects is that our economy is beginning to heal and recover.
MR. MARTIN: Can you explain that 2 percent drop for African-Americans in the unemployment rate? W- — what does that actually mean?
DR. ROUSE: Well, it’s – I think it’s good news. Now, one – as you – one thing we have to be careful about, as you mentioned, is that this report reflects some important benchmark revisions, so they did some recalibration of the data, which means we really technically cannot compare these numbers for this month – in January – to December. Nonetheless, I don’t believe, looking at the report, that the entire 2 percentage point – 2-percentage-point drop for African-Americans is due to that revision. I say that because the employment growth was just so strong, and it was so broad-based, that you saw employment growth for African-Americans as well.
MR. MARTIN: Cecilia, during the President’s State of the Union address, he talked about a proposal requiring states to mandate that young folks stay in college until they’re ei- — sorry – stay in high school until they’re 18 years old, for them to graduate. Right now, some 21 states have that as a law. Does that go far enough? What does that actually mean?
DR. ROUSE: I think the President’s proposal – what it mostly did was highlight the importance of high school dropout and what a tragedy it is in this country. The proposal is not enough, and the President knows that; it’s why his whole education agenda is what’s important, from pre-k through postsecondary, but I think it’s a step in the right direction. I think we need to couple that with much stronger elementary and secondary school curricula, smarter ways to be educating our students; but I think what we would see is that, with smart investments, that every dollar that we invest in these kids when they’re younger gets paid back. Not only do they earn higher earnings as adults, but as a society we get paid back because they’re less likely to be participating in crime, they’re more likely to vote, they’re less likely to end up on social assistance, and they pay higher taxes. So, it’s win-win. They win as individuals. We win as a society.
MR. MARTIN: You’re a professor at Princeton. One of the things the President talked about is stemming the increase when it comes to tuition. Really, can that happen? Can he really have that kind of effect on universities and the amount of money they receive based upon tuition increasing?
DR. ROUSE: Well, I think what the President was highlighting is that tuition has been going up very rapidly and that it’s important that colleges and universities look carefully at how they’re pricing and to make sure that the education they’re providing is worth the dollar. So, he’s really calling for them to be trying to be efficient in their pr- — in their provision of higher education and to make it as affordable as possible for students, because we know just how important it is for those students in today’s society.
MR. MARTIN: On Tuesday, when Mitt Romney won Florida i- — in the GOP primary, this is what he had to say in his victory speech.
MR. MITT ROMNEY: I will insist on a military so powerful, no one would ever think of challenging it.
MR. ROMNEY: Without raising taxes, I will finally get America to a balanced budget.
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MR. MARTIN: Now, look. You worked in the White House. Can you actually do that? Can you say, “I’m not going to raise taxes,” “I’m going to get a balanced budget,” and, “I’m not going to,” frankly, “go forward with the cuts that Pres. Obama has sugge-” — “has put forth when it comes to the military”? Is that even possible?
DR. ROUSE: I – I – I actually don’t see how it all adds up. If you do the math, we have to make choices about how we’re going to spend our scarce dollars, and we have to invest them wisely, and we know that we can do , and we can balance our budget with very sensible cuts, and – but we have to balance it out with increased revenues as well. So, I – I actually don’t understand his math.
MR. MARTIN: Cecilia, also this week, Mitt Romney made a – some would say a gaffe – I – I say it’s even more than that – when he talked about the issue of the poor, saying he wasn’t concerned with the poor because there was already a safety net. If it needed fixing, he would fix it. Said he wasn’t concerned with the rich, that he really wa- — really was concerned with the 90 to 95 percent of Americans in the middle class.
Well, according to the numbers, 15.3 percent of all folks in the country are living in poverty – some $22,000 a year sa- — a year earnings for a family of four. What do you make of that kind of comment from a presidential candidate, who basically says, “Poor folks – I’m not really that worried about ’em”?
DR. ROUSE: It really concerns me, because he would be president of everybody, of all Americans – not just the middle class, or not just, you know, the wealthy; but of the poor as well. And we know that the safety net doesn’t go nearly far enough, and it’s not like those folks are living high off the hog. And – and the thing that really concerns me, coming back to the dropout issue, [is] a lot of those individuals did not complete a high school degree, or have just a high school degree, even. And so what we know is that we need to be helping these individuals obtain the skills that they need, be able to take – so they can get the kinds of skilled jobs, take care of their families. So, you know, it concerns me because, you know, we live and rise together; and I don’t think one can just say that it’s the middle class that’s struggling the most. We’re all struggling. We’re just now recovering from this recession.
MR. MARTIN: Well, Cecilia, we certainly appreciate it; and we look forward to having you back on “Washington Watch.”
DR. ROUSE: Thank you, Roland.