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Former Obama economic advisor Austan Goolsbee on the latest report from the Labor Department and the state of the economic recovery.
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Support we want to bring in Austin Goolsbee.
Professor at the university Chicago Booth school of business and former White House economic advisor -- -- he's in Chicago -- thanks for joining us.
Yeah -- grabbed me you're initial assessment of the jobs report number.
So so you know it's right around expectation little below its its what I was predicting.
I think this just reflects the fact that we're growing about 2% which is.
Modest but it's not -- -- not good and that's kind of where we've been stuck for the last year and a half.
And here's the thing is you you that you teach about economics at some point sitting there recovery be much stronger than this.
You -- well you certainly want it to be would come and out of all big financial crisis.
Usually.
The recoveries are not robust.
Of the V shape kind of warm well Austin no this -- yours say this is the -- like 2001 that's the worst post recession recovery in history -- Well -- second worst after 2000 what kind -- after you get and when you come out of bubbles.
-- like it -- it usually takes a fair amount of time to come out of it so the last two recoveries.
Have had this.
Feeling double of the well we're not growing fast enough to really just set things on fire and that's -- Economy can't go back to doing what it was doing before the recession began.
I wanna talk about the the human face behind these numbers because we -- -- -- the numbers up all time in this is what bothered me two things that really stand out for me.
-- several weeks along are unemployed four point seven million people -- are we talking about a new permanent underclass of people formally.
Proud American workers who probably will never get a job again or get a job that substantially below what they were making and what they're capable.
I don't think it's permanent but it certainly this long term unemployment problem.
Is the worst part of the job market you know that that you've got.
Decrease in the labor force.
Participation.
From people they got discouraged that -- -- people have been out of work for literally you know years at a time.
That that's that's a tough nut to crack as it's gonna involve changing of industry retraining.
Likely to be some wage cuts yeah I think we got to deal with that.
Austin -- -- Cheryl Casone.
I wanted to ask you about the president's decision to shut down the jobs council.
Yesterday he didn't speak much about it at really frankly at all in his inauguration speech.
Did you at some point advise the president of the jobs council wasn't worth pursuing or if you were still in the White House would you advise them to -- made that decision yesterday.
Well the thing is -- that it was scheduled to go for two years you would've had to do some active change to.
To re created or or -- it I think that it.
For economic recovery advisory board.
Which was for the first two years and I was the chief economist on that more into this the jobs and Competitiveness Council.
It was a bipartisan.
Thing it went by design you had a bunch of people from different side.
Really important is often -- that -- high and well.
And president of point 9% unemployed now it's that that that that's not correct they met four times for the large meetings.
And they met scores of times before their regional meetings.
The problem was.
Unlike the other several hundred advisory committees to the president.
This one became political.
Right from the beginning and it one of the main reasons that they didn't meet at the big public meetings.
What the fact that the executives themselves did not want to get put in the middle of the presidential election and so I think.
The export council there are many big council made up of business leaders that they should continue they wanna continue business -- -- that's -- got.
Overly political I think it was uncomfortable for a lot of the business loss -- on it that became so.
Also want to get back to 22 looking Ford went in and in some of these friends that are very alarming blasphemy -- overeating you just mentioned participation -- a moment ago.
You know for me the participation rate amongst young Americans.
-- has been spiraling to significantly lower in on the flip side of that.
Older Americans have actually been coming into the job market last time you hear you over Stewart -- kind of indicated.
We should be worried about it is natural attrition but the fact of the matter is is that unnatural older people working more than jumping back into the job market but that's young people.
Who have given up on this -- now you think they're encouraged to give up on this.
Or do you think.
Why that's happening.
Well I think who -- and that's -- inflating a few different things.
Among young people there's no question it's because the unemployment rates -- high among young people so you've seen a lot of them going back to school.
Trying to find other things to do -- they can't get a job that's a disturbing part of the number.
What I had said before and remains true is that of the big drop in labor force participation.
More than half -- it is from the aging of the population that over time.
You would expect as people get older they're gonna be more retirement of the baby boom start -- about the labor force.
However.
The others say 40%.
Of the decline in labour force participation.
He is part of what I've describing as the weakest part of the job market I think that is the thing that we should be.
Highly concerned about its core it's the same problem -- of the long term on avoid.
Those who fewer people entering the work right I think that's the tough part we got to address that we've got to address all of this you know whether it's the worst source second worst is certainly unacceptable to most Americans and -- dragon on a long time but we appreciate it you've been fantastic administration and we appreciate you come on thanks -- -- Austin.
Yep nice target you guys -- well let's get back.
