(Credit: New York Times.)

Remember the first pivot to jobs? After wasting much of 2011 trying to strike a Grand Bargain with the Republicans on deficit reduction, which earned him the worst approval ratings of his Presidency, Obama finally woke up in the fall of that year and pivoted toward the jobs issue. He proposed the American Jobs Act, a major package of infrastructure investment, extended unemployment benefits, tax cuts and job protection for teachers, police and firefighters, and pilloried the GOP for opposing the plan and not caring about the jobs and incomes of ordinary Americans.

You could date the revival of Obama’s political fortunes from that pivot. His approval ratings started improving and he went on to score a solid victory in the 2012 election.

But in 2013, Obama has regressed to his early 2011 form. The president has wasted a good deal of time and political capital this year trying to strike yet another Grand Bargain with the GOP and, once again, he has little to show for it.  And, with new budget forecasts showing the deficit already falling sharply and Republicans showing little interest in budget compromise, the prospects for such a Bargain are fading by the day.

Indeed, all that Republicans seem really interested in is attacking him on the scandal of the day. So far, Obama has been able to weather these attacks, partly by counter-mobilization of his own base.  But how long can he expect this to last and, crucially, how can he develop a head of steam heading into the 2014 election, where he hopes his party can hold the Senate and take back the House?

There’s really only one way; replicate his jobs pivot from 2011. That means a full-bore effort to change how Washington is dealing with (really, not dealing with) today’s economic problems. Jim Tankersley, in a great Washington Post article on Tuesday, details the sorry state of the economic conversation in our nation’s capitol:

Washington has all but abandoned efforts to help the economy recover faster…There are no serious negotiations underway between the White House and congressional leaders on legislation to spur growth, and no bipartisan “gangs” of senators are huddling to craft a compromise job-creation package.

Yet economic growth remains slow by historical standards, and 11.5 million Americans are still looking for work. More than 4 million people have been unemployed for longer than six months. A Washington Post-ABC News poll found in April that two-thirds of Americans said jobs were difficult to find in their communities.

Only the President is capable of breaking through this not-so-benign neglect and refocusing the Washington conversation on jobs.  It won’t be easy; occasional attempts to change the conversation, as in his recent his recent Middle Class Jobs and Opportunity Tour, have been ignored by the press and the GOP alike.  But if he focuses relentlessly, rather than occasionally, on the issue and does succeed in breaking through, the rewards could be great, just as he found in his first pivot to jobs back in 2011.

Wisconsin Governor Scott Walker (R) is pushing a report from his administration’s Department of Workforce Development that puts the state’s net private-sector job gains at 32,000 for 2012. Federally tallied figures for all states won’t be available until June, as CBS affiliate WSAW explains, which renders comparisons impossible:

Walker’s Department of Workforce Development released the new figures on Thursday, but they can’t be compared to other states until next month. Walker has been releasing the figures before they are published officially by the U.S. Bureau of Labor Statistics.

Critics say the state’s performance can’t be adequately measured until the numbers can be compared with other states. The most current ranking, comparing jobs created between September 2011 and September 2012, showed Wisconsin was 44th in the nation.

Walker is claiming a two-year total gain of 62,000 private-sector jobs, and a table on page 3 of the state’s report acknowledges the public sector is employing about 8,500 fewer people than it did the month before he took office. That puts the governor less than one quarter of the way to his campaign pledge of 250,000 total jobs created in four years.

If any independent organization would be likely to defend Walker’s record, it would be the conservative U.S. Chamber of Commerce. But the Chamber’s most recent annual scorecard of state economies has the state near the bottom in job creation, as the Madison Capital Times noted shortly after the report was released:

Its annual scorecard on state economies ranked Wisconsin 44th for overall economic performance and 50th — as in dead last — for short-term job growth as measured between September 2010 and November 2012. It also has Wisconsin 39th in “business climate” — on par with the state’s ranking under Gov. Jim Doyle.

Walker’s early-term agenda focused on busting public worker unions in the state and slashing state spending. His successes in pursuing those legislative goals amount to a localized version of the austerity approach to economic growth which Republicans have pressed with less success on the national level. Following the billions in budget cuts he pushed upon taking office, Walker has proposed both further cuts to school budgets and a tax cut that’s heavily slanted towards the state’s wealthiest residents.

Those policies have pulled demand out of the state’s economy, undermining Wisconsin’s growth prospects. Beyond the paltry jobs progress Walker is touting, U.S. Commerce Department figures show the state ranked near the bottom in terms of personal income growth over the 2011-12 period.

The budget deficit will shrink to its smallest level since before the Great Recession in 2013, and it will continue shrinking through 2015, according to revised estimates from the Congressional Budget Office released Tuesday. In reality, the deficit is even smaller than the CBO predicts, since its “current law” projections assume that funding for the war in Afghanistan and federal disaster relief for states hit by Hurricane Sandy will continue in perpetuity. But that funding isn’t endless, and it will bring the deficit down to even smaller levels.

Still, under CBO’s projections, the deficit is now half as large as it was in 2009, the year President Obama took office:

If the current laws that govern federal taxes and spending do not change, the budget deficit will shrink this year to $642 billion, CBO estimates, the smallest shortfall since 2008. Relative to the size of the economy, the deficit this year—at 4.0 percent of gross domestic product (GDP)—will be less than half as large as the shortfall in 2009, which was 10.1 percent of GDP.

The deficit is shrinking so rapidly because of spending cuts and new revenues and because CBO continues to revise down projected health spending. But that the deficit is shrinking so rapidly isn’t necessarily good news — as U.S. News and World Report’s Pat Garofalo put it, it is instead “one more piece of evidence showing that the economic discussion that has gripped Washington recently is absurdly backwards.”

Despite smaller deficits, congressional Republicans remain focused on spending reductions, and the most recent round of cuts has kicked children out of preschool, left cancer patients without needed screenings, and gutted programs that help low-income Americans in a variety of ways. Those cuts have also threatened to derail the economic recovery, which has sputtered along despite the headwinds created by a consistent focus on deficit reduction. In past recessions, increased government spending has pulled the U.S. to recovery. In this one, it has only made recovery harder.

The crisis the U.S. is facing isn’t the deficit. It’s that the unemployment rate is still 7.5 percent, and more than 4 million of those workers have been off the job for at least six months. A shrinking deficit might be good news in the long-term, but it isn’t putting people back to work or sparking a robust economic recovery. And yet, even with evidence that stimulus policies like the American Jobs Act would help, and despite the fact that the deficit continues to subside, congressional Republicans aren’t just ignoring the devastating impacts of sequestration — they are pushing for even more spending cuts in the immediate future.

While the economy has seen decent job growth in recent months, the jobs being created may not pay very well. A new report has found that about half of the jobs created in the last three years have been low-paying, reports the Huffington Post’s Mark Gongloff:

Nearly all of the 6.2 million jobs created since the job market first started its historically lousy recovery in the spring of 2010 (nearly a full year after the recession ended) have been in the private services sector, according to RBS. And of the roughly 160,000 jobs per month created in that sector, about 80,000 of them have been “low-paying,” according to RBS. “High-paying” and “average-paying” jobs account for about 40,000 jobs each, according to RBS.

Previous research has found that the majority of the jobs added to the economy since the end of the recession pay low wages. Middle-wage and high-wage jobs haven’t seen nearly the same rate of growth, meaning that the economy has traded comfortable jobs for those that merely allow workers to scrape by.

Private sector companies aren’t the only culprit, however. A recent study by Demos found that tax dollars, through government contracting, health care spending, Small Business Administration loans, federal construction grants, and maintenance on buildings leased by the federal government pay two million workers $12 or less per hour, wages too low to support a family. That figure is more than the number of low-wage workers at Walmart and McDonalds combined.

President Obama has recently pushed his proposal to increase the federal minimum wage to $9 from the current $7.25, which hasn’t been raised in nearly five years. But to raise it to the buying power of the minimum wage in 1968, it would need to be $10.55 an hour. Meanwhile, pay at the top of the economic ladder has far outpaced growth at the bottom: CEO pay increased 127 times faster than worker pay over the past three decades.

College graduates have fared better than workers without degrees during the economic recovery, as their unemployment rate fell to 3.9 percent according to data released in May. That’s far lower than the 7.5 percent overall unemployment rate.

For recent college graduates, though, the unemployment rate doesn’t tell the full story. According to a new report from McKinsey & Company, nearly half of America’s recent graduates say they are working in a job that does not require a college degree. Instead, they are working as waiters, salespeople, or in other low-wage jobs, the survey found:

[T]he most striking finding from our survey may be the extent to which recent graduates find themselves in jobs that they say do not require a college degree. Overall, nearly half say this is the case, though graduates of public universities are 11 percent more likely to feel overqualified than those who attended private universities. [...]

For example, assuming that our sample is broadly representative of the nation’s 1.7 million college graduates last year, roughly 120,000 Americans who would rather work elsewhere took jobs as waiters, salespeople, cashiers, and the like. That’s one every five minutes.

The survey echoes recent data from the Bureau of Labor Statistics that showed college graduates are increasingly turning to low-wage jobs when they finish school. 284,000 college graduates are working minimum wage jobs according to the BLS, more than double the number that worked such jobs before the Great Recession.

That’s largely because low-wage sectors have dominated the economic recovery, accounting for a majority of the jobs added since the recession’s end even though they made up just 21 percent of jobs lost during the downturn. Mid-wage jobs that generally go to recent college graduates, by contrast, made up 60 percent of recession losses but just 21 percent of gains since it ended.

That has broad implications for the American economy, as recent graduates working in low-income jobs are less able to contribute to economic growth through the purchase of houses and other goods, particularly as they remain overburdened by student loan debt. Worse, those low-wage jobs are less likely to provide substantial retirement or health benefits, and working for low wages immediately out of college leaves workers behind for the rest of their lives, meaning they will lag older generations in income, savings, and wealth accumulation for years to come. (HT Huffington Post)

America’s budget deficit is shrinking at a faster pace than at any time since World War II, and it is now projected to fall below 5 percent of GDP this year, 3 percent of GDP in 2014, and 2 percent of GDP in 2015, according to a Potomac Research report released Wednesday. That may please Washington politicians who have ignored jobs and unemployment over the last three years, but it isn’t good for the economic recovery.

The immediate deficit reduction efforts Washington has pursued repeatedly since Republicans took control of the House of Representatives in 2011 have in fact dampened the economic recovery, economists told the New York Times, and without the spending cuts and tax increases enacted in the last three years, unemployment would be a full-point lower and economic growth two points higher:

The nation’s unemployment rate would probably be nearly a point lower, roughly 6.5 percent, and economic growth almost two points higher this year if Washington had not cut spending and raised taxes as it has since 2011, according to private-sector and government economists.

After two years in which President Obama and Republicans in Congress have fought to a draw over their clashing approaches to job creation and budget deficits, the consensus about the result is clear: Immediate deficit reduction is a drag on full economic recovery.

Hardly a day goes by when either government analysts or the macroeconomists and financial forecasters who advise investors and businesses do not report on the latest signs of economic growth — in housing, consumer spending, business investment. And then they add that things would be better but for the fiscal policy out of Washington. Tax increases and especially spending cuts, these critics say, take money from an economy that still needs some stimulus now, and is getting it only through the expansionary monetary policy of the Federal Reserve.

The spending cuts have been especially damaging, as they have made up the vast majority of deficit reduction efforts since the end of the Great Recession. Modest tax increases targeting the wealthy went into effect at the beginning of 2013, but it is the expiration of the payroll tax holiday, which will raise taxes on the median American family by roughly $1,000 this year, that will hurt the recovery, the economists and analysts said. Nonpartisan reports have said the income tax increases on the wealthy would do little to affect growth.

That deficit reduction is holding back the recovery should not come as any shock. The stimulus bill President Obama signed into law in 2009 put the U.S. on a path to recovery that far outpaced the austerity-laden European economies, but as focus has turned to deficit reduction, growth has turned tepid. While rises in government spending have traditionally added to growth and pulled the U.S. out of economic downturns, it has plateaued since 2010, hampering recovery efforts this time. Reduced spending, in fact, “has detracted from growth in five of past seven quarters,” one investment bank wrote in a midyear report this week.

Republicans have blocked efforts, such as Obama’s American Jobs Act, that would have further stimulated the economy. That legislation would have led to the creation of a million jobs and added to growth, according to independent analysts, and would have aided states and local governments and federal agencies that have laid off more than 500,000 public employees, many of them teachers and public safety workers, since the end of the recession. With government borrowing costs at historic lows and unemployment still high, it’s that sort of shot in the arm the economy needs. But after Congress let sequestration, the damaging budget cuts that could wipe another 700,000 jobs out of the economy, take effect in March, it is now focused on finding even more deficit reduction in the immediate future.

The jobs report out this morning was full of good news: unemployment fell to 7.5 percent as the economy added 165,000 jobs, while big upward revisions to the past two months’ jobs numbers were added. The private sector carried those figures, adding 176,000 jobs in April. Yet the number was dragged down by the loss of 11,000 public sector jobs.

This has been a steadily recurring trend with each monthly jobs report: even when the private sector adds a solid number of jobs, the overall figure is pulled down by losses in the public sector. 741,000 jobs have been lost in the government sector since the beginning of the recovery period in June 2009, with 89,000 gone since this time last year.

Overall, the government has shed 718,000 net jobs since President Obama took office. While often accused of bloating the government, the trends show exactly the opposite: Obama has overseen a sharp decline in public sector payrolls as compared to his predecessor President George W. Bush, as can be seen in this chart from Calculated Risk:

While government workers have been maligned as lazy paper pushers, many of them perform vital work that benefits their communities. Take, for example, the loss in teaching jobs. “Local government education” jobs, or in other words teachers, dropped by 1,500 last month and have declined by 355,500 since the recovery began.

This trend can be tied very closely to a major cutback in government spending: the most recent GDP report showed that the federal, state, and local share of the figure was 0.01 percent lower than four years ago. This comes during a struggling economic period where money in the private sector is still tight.

The drop in public spending and, in turn, public employment has had big consequences for the recovery. If public sector rolls hadn’t been shrinking so steadily, the unemployment rate would likely be a full percentage point lower. The furloughs and potential job losses from sequestration cuts don’t even show up in these numbers. When the full pain of those cuts is felt later in the year, the trend may look even worse.

The economy added 165,000 jobs in April and the unemployment rate ticked down to 7.5 percent, according to the latest data from the Bureau of Labor Statistics. Analysts had expected 135,000 jobs.

The report also included big positive revisions for previous months. February’s jobs number was revised from 268,000 to 332,000, while March was revised up from 88,000 to 138,000.

The private sector added 176,000 jobs, while the public sector lost another 11,000 jobs last month. The number of people out of the labor force ticked down 31,000 from 89,967,000 to 89,936,000, as did the number of people who currently want a job, which dropped from 6,722,000 to 6,413,000.

In his weekly general address in Vatican City’s St. Peter’s Square on Wednesday — which is also the labor holiday May Day — Pope Francis condemned putting profits ahead of human suffering and called for job creation:

“And here I think of the difficulties that, in various countries, today afflict the world of work and businesses,” he told tens of thousands people gathered for his weekly general audience in St. Peter’s Square.

“I think of how many, and not just young people, are unemployed, many times due to a purely economic conception of society, which seeks selfish profit, beyond the parameters of social justice. I wish to extend an invitation to solidarity to everyone, and I would like to encourage those in public office to make every effort to give new impetus to employment.”

The Pope has long been an advocate for the poor, living a spare lifestyle, visiting impoverished areas, and taking his name from the Catholic church’s biggest advocate for the poor. He has called extreme poverty and growing income inequality violations of basic human rights.

Pope Francis joins a growing anti-austerity chorus on his continent. U.S. officials have also urged Europe to shift the focus away from budget cutting and toward pro-growth policies. Yet leaders in this country haven’t heeded the same advice, hurting growth with spending cuts and harming important social programs.

Francis also condemned the factory collapse in Bangladesh and working conditions in that country:

A headline that impressed me so much the day of the Bangladesh tragedy, ‘Living on 38 euros a month’: this was the payment of these people who have died … And this is called ‘slave labor!’

The death toll from that tragedy has already exceeded 400, yet major U.S. retailers have refused to implement a plan for better safety and working conditions.