New Unemployment Numbers Terrible News for the Economy

According to the Bureau of Labor Statistics (BLS) jobs report Friday, unemployment has stalled at 5.1 percent in September while job growth is slowing more than originally thought.

The latest employment numbers show slow growth. Despite adding jobs, it wasn’t enough to offset overall unemployment in a statically significant way. Additionally, the report found job numbers for July and August were lower than originally believed.

“The unemployment rate was unchanged at 5.1 percent,” the BLS report stated. “The change for August was revised from +173,000 to +136,000. With these revisions, employment gains in July and August combined were 59,000 less than previously reported.”

The Economic Policy Institute noted the numbers are even worse for certain industries like education. It’s an issue that likely hints towards a larger policy problem. For instance, the AFL-CIO believes Congress is to blame and unions need more power.

“The report should send a crystal clear message to policymakers in Washington, D.C.,” AFL-CIO senior economic adviser Thomas Palley said in a statement. “Congress must end the dangerous fiscal sequester and change our labor laws so that workers can bargain a fair share of productivity gains.”

Palley also argued the Federal Reserve should not raise rates until wages are better and the administration needs to improve trade policy. The Competitive Enterprise Institute (CEI), on the other hand, argues policies pushed by the Department of Labor and the National Labor Relations Board (NLRB) are to blame.

“Both bodies have made moves over the past few months that make flexible working arrangements difficult,” a report by CEI stated. “Thereby, they have discouraged both businesses from hiring and workers who would prefer flexible arrangements from getting the working conditions they want.”

One of the most contested regulatory changes impacts how union elections are held. The new procedure, dubbed the “ambush election” rule by critics, drastically shortens the length of time in which a union certification election must be held from a median of 38 days to as little as 11 days. It was implemented in April.

Republican lawmakers and business groups have argued the rule change unfairly benefits unions at the expense of workers and their employers. It leaves workers little time to study the impact of unionizing.

unemploymentAttempts to challenge the rule have been unsuccessful for the most part. The Republican-controlled Congress tried to prevent it with a resolution which was vetoed by the president. Lawsuits filed against the NLRB by the business community have also had trouble.

The NLRB, however, has countered critics by stating the rule will help to modernize the union election process. This, it argued, will help everyone involved.

Attempts to redefine franchising and contracting have also garnered a lot of opposition. Under the National Labor Relations Act, a company can be considered an employer over a company it contracts with if it has significant control over its employees.

Known as the joint-employer standard, the rule helps to resolve labor disputes when it’s not clear whether the dispute arose from decisions made by the direct employer or a larger corporation it contracts with. Cases involving McDonald’s, CNN, and Browning-Ferris Industries, however, have provided the NLRB the opportunity to revisit the standard which it now plans to drastically expand.

The problem is when a corporate brand name gets declared a joint-employer with a small business, it must accept responsibility for the actions of that operation. Business groups argue this will likely result in corporations being less likely to participate in the franchise model or asserting more control over the small businesses they contract with.

The NLRB has defended the changes. It argued in the McDonald’s case that franchisors often times have too much control over the independent franchisees they contract with for them to be consider their own operations.

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