On the face of it, it might have appeared to be a minor blip of little significance last week when the Labor Department reported the nationwide unemployment rate rose to 9.1% in May, from 9.0% the month before. The problem, of course, is that we’re not talking about a change from 5.0 to 5.1%, but rather, almost double-digit unemployment, which has barely budged in more than two years. We’re talking about millions of people who have been unable to find employment for months, or years. We also learned last week that the number of jobs created in May was not sufficient to keep up with the growth in the working-age population, let alone move our tepid recovery into high gear.
Clearly this is a serious problem that has confounded policymakers on both sides of the political aisle. At CEA, we’ve repeatedly called for policies that will open more of the country to oil and gas exploration and drilling as well as encourage investment in all sorts of energy sources – from solar and wind to nuclear – which are commonly referred to as “alternative,” but which must play a role in a balanced domestic energy policy. We cannot purport to have all of the answers to such a perplexing problem as high unemployment, particularly at a time of concern that the economy may be taking a turn for the worse, but we do know that this is a large problem that can only be tackled with appropriate job creation policies on multiple fronts.
Building a stronger domestic energy sector will help create jobs and stabilize prices. But if we fail to commit to the long-term sustainability of the energy industry, its ranks of workers will dwindle. The wind energy industry, for example, supported about 75,000 American jobs at the end of last year, but now fears that many of those jobs will be lost to China, which has consistently supported its own wind power sector with incentives to lower the cost of manufacturing at a time when U.S. policies appear subject to whim and sudden change. And in the oil sector, there are multiple examples – from the Gulf of Mexico to Alaska – of policies and practices that have blocked drilling activity, either by banning it outright or delaying leasing. All of these policies directly impact not only almost 10 million workers in the energy sector but also virtually every job in the U.S. that relies on energy (which is, of course, literally every job!).
Along with the ways energy policy influences energy supply and jobs, of course, it touches us all in our wallets. For several weeks now, we’ve been tracking the movement in gas prices, which are at the highest level in more than two years, further squeezing already strapped consumers. In recent weeks, those very high prices have begun to reverse course, but as the chart shows, they are still well above historic norms, and weighing heavily on our economic health. They may be moving in the right direction, but they are moving far too slowly. Last week’s employment data should serve to remind us all of the urgency of the current jobs crisis.