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STARTING POINT WITH SOLEDAD O'BRIEN
Low Jobs Report for March; Shine a Light on Slavery Day
Aired April 5, 2013 - 08:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN BERMAN, CNN ANCHOR: Getting numbers before she yells them out loud. This week, these numbers are only part of the story.
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Absolutely. In fact the markets are indicated much lower right now because of North Korea stuff that's going on. And that's real talk about nuclear attacks and things like that. So that is affecting markets without these jobs numbers, we're expecting the markets to be down about 80 points at the open on the Dow. And that's very unusual. We've had very strong days, new records every day. These jobs numbers could either be a downer on the market and if they're bad --
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Eighty-eight thousand.
VELSHI: That's bad. Eighty-eight new jobs created in March, very bad.
BERMAN: That's way lower.
VELSHI: Yes. That's much, much -- remember, we're expecting 192,000. We probably needed 250,000 to 300,000 -- we weren't going to get that -- to keep the growth going. Eighty-eight thousand is very poor.
ROMANS: The jobless rate fell to 7.6 percent so you've got less job creation than expected. But the unemployment rate fell, but the unemployment rate falling, Annalyn Censky, our economics correspondent who's in the Treasury Department right now, telling us all for negative reasons, more people coming into the labor market or, you know, you have --
ROMANS: You have the jobless rate falling not for good reasons.
ROMANS: Eighty-eight thousand is not -- is not a good development when we look at the record of how we've had jobs growth.
VELSHI: And we were taking into account all of those things, like the forced spending cuts. Even with all of that we thought 192,000. And John, 192,000 would not have been a strong number, given what we need and where we are in terms of this economy right now. So to get more than 100,000 lower than expected, that's going to hurt. Those of you who are in the market today, expecting a new high, you're not going to get it.
BERMAN: Just to reiterate, that number, 88,000 jobs created in March. That number, less than half.
BERMAN: Of what we are expecting. Is this one of those reports that will come as a shock? Is that a shock to the system or just a downer?
VELSHI: Yes. This is bad -- I mean, to be less than 150,000 is bad. To be less than 200,000 is not growing fast enough. To be less than 250,000 is growing less than Obama and Romney said during the campaign. So 88,000 -- there's nothing you can paint as good about 88,000.
ROMANS: No. There -- there were a couple of revisions so January was revised up to 148,000. We can put a trend chart, I can show you what it's been looking like over the past year. So January was revised up. There was another revision. So all together, you had 61,000 more jobs added in the past couple of months than we thought. But an 88 print --
ROMANS: As they say in the market, it's not great for the month of March.
VELSHI: So even if you add the 88 plus the 61 --
ROMANS: No, not good.
VELSHI: You still -- that number came out as a total, I'd still tell you it is bad.
BERMAN: Let's bring in Diane Swonk. Diane Swonk is with the -- she, of course, the chief economist for the Chicago services firm, Mesirow Financial.
ROMANS: Let me -- I want to jump -- there's another number I want to ask you specifically about. We talked about the underemployment rate. U-6 is the line on the -- on the Labor Department report. It actually fell 13.8 percent. Are there any ways to find some -- I guess going in the right direction on this report, or is this a big negative?
DIANE SWONK, CHIEF ECONOMIST, MESIROW FINANCIAL: I think it's a big negative. I'm looking at -- I'm trying to get some of the detail on it now, but certainly the fall in the number of people looking for jobs, the fall in the labor force, that's the reason that the unemployment rate fell, was because fewer people are actually looking for jobs and some of that, of course, is retirees and things like that.
But let's face it. We know that what we really want to see here is only about half of the reduction in the participation rate is retirees, what really -- another part of it is people just not looking for jobs because they're frustrated. And you know, a lot of people are losing their extended unemployment insurance right now as well. And what we'd expect to see is people looking for more jobs as they're losing that extensions on their unemployment insurance.
ROMANS: And --
SWONK: And instead we're seeing them give up. So that really is something to be concerned about. This is the kind of issues that the Feds have been looking at is not just the quantity of jobs that we're -- that we're generating, which this month certainly are not good, even with the upper revisions to previous months, but they're also looking for quality of the job composition and the quality of the -- the reasons why the unemployment rate is falling.
SWONK: And they reiterated many times. If the unemployment rate falls for the wrong reasons, we're not going to take our --you know, take the paddle down, we're going to continue to try to ease out there because we really want to create more good reasons for the unemployment rate falling, not just because people are giving up.
ROMANS: And people giving up -- 500,000 people dropped out of the labor market. So that --
ROMANS: That's the number on there.
SWONK: It's just huge.
ROMANS: And that's a big number. And that shows a lot of frustration. We talked about the composition of the jobs that have been created. This has been something we've been concerned about for months now. You've got low-pay jobs with not a lot of benefits or any benefits --
ROMANS: -- that are -- that are being actually done by people with bachelor's degrees in some cases and you've got very high-skilled jobs that companies complain they can't fill because they don't have the workers to fill them. The composition of the labor market and the kinds of jobs -- were really the disconnect here right now, Diane.
SWONK: It is a disconnect. You know, although I don't really buy the mismatch argument that much, because I've been digging into the data a lot.
ROMANS: Some companies. Yes.
SWONK: And the reality is, you know, although they say they can't find the skilled workers, they're not paying up. Wages are not accelerating in the areas where they say -- you know, the only place we've finally seen it is truckers. Trucker wages are picking up. It's going to take a while to get trained as a trucker. But let's face it. These truckers are independent contractors, now they need a lot more wages because they're also going to cover their own fuel costs. And it's long hours. So, you know, we're not seeing -- you know, builders are saying there are some shortages out there, but yet we've not seen construction wages accelerate at all because builders are saying, you know, hey, we don't get a lot of margin in this market because even though housing prices have picked up, it still costs a lot to build a new home.
So they're not willing to pay those wages up. So, you know, the mismatch is -- you know, until we see wages accelerate in those areas where they say we're missing the skilled workers, I think that's a bit of a bogey out there. It's not really the real issue. The real issue is that we've got an economy that's still not growing fast enough to generate enough good jobs. In fact about 2/3 of the jobs generated since the recovery have been in those what you mentioned, Christine, low-paid service sector jobs.
This is retail, food service, manual labor, in-home healthcare, and those have replaced very high-wage jobs that we lost during the great recession in the manufacturing, construction, and the office sector.
BERMAN: Diane Swonk, our thanks to you for being with us this morning.
Again, the headline here, 88,000 jobs created. Less than half of what analysts were expecting.
And, Ali, I guess my question to you is, any sense of what role do the forced government spending cuts had to play in all of this?
VELSHI: So we have not seen added government jobs in many, many months.
VELSHI: We're just not -- we've gutted the government. So we're not going to gut them more. So all of this, what typically happens, I haven't got the breakdown in front of me, but typically what happens is you -- when you have a number like this, 88,000, it means you had more than 88,000 jobs added in the private sector and you had -- so you subtract the losses that you got from government.
You're looking at the areas that grew, professional and business services had 51,000 jobs, healthcare always, healthcare added jobs throughout the entire recession, 23,000 jobs. Construction, you talked about Hurricane Sandy.
ROMANS: And housing.
VELSHI: And the big boom in housing, 18,000 jobs in construction, leisure and hospitality, employment in food services, they added 13,000. Remember a lot of the business done in American cities is done by people coming in from overseas. But retail, retail declined by 24,000.
ROMANS: We're going to get the payroll tax holiday. People have less --
VELSHI: It could be.
ROMANS: Less in their pockets to spend.
ROMANS: And they're starting to feel it.
VELSHI: Government -- by the way, here's the answer of your question. Government fell by 12,000. So when you -- it was 88,000. So it would have been -- it would have 100,000.
BERMAN: Hundred thousand.
VELSHI: And it's 88,000. One thing, manufacturing didn't grow. And that's one of the things we've been talking about for a long time as an underpinning of this growth in the economy that we're getting manufacturing jobs back, manufacturing didn't grow in this month. So I'm worried. I leave this report a little bit worried about what's going on.
BERMAN: So again, the news today, 88,000 jobs. Before we move on, we would be remiss if we did not say good-bye to our friend Ali Velshi, who is joining us for the last time on set today.
VELSHI: I'm going to miss you, guys. And it's been fun working with you. And of course I'm going to miss Christine, after 12 years of working together. We kind of grow up together in this place. But --
ROMANS: You've been wearing pin stripes and polka dots since the day I met you.
VELSHI: Yes, I walked in this morning, my producer said, does anyone want to have a picnic on Ali?
ROMANS: Anyway, guys, can we give him a round of applause?
UNIDENTIFIED MALE: Yes.
VELSHI: Thanks, everybody. And thanks mostly to you out there, the viewers who I've spent the last 12 years, who I'm going to -- going to miss you here.
ROMANS: Ali Velshi is a big personality around here. We're going to be miss you but we'll be looking for your smiling face and your bald head somewhere else.
ROMANS: Thank you. BERMAN: Thanks so much, Ali.
Of course these jobs numbers will play into the politics right now of the budget fight. President Obama's upcoming budget now we know expected to include cuts to Medicare and Social Security along with some new tax increases. This will be unveiled Wednesday.
White House officials says the cuts are meant to show the president is willing to compromise with Republicans. That budget also includes an offer President Obama made to House Speaker John Boehner of $400 billion in savings to Medicare over 10 years. The White House apparently hoping this will help kick start talks on long-term deficit reduction.
ROMANS: The FBI and Secret Service are again investigating a Web site that claims to divulge personal information about celebrities and U.S. government officials. The Web site's latest target is Julia Pierson, who was sworn in last month as director of the Secret Service. Information posted about her includes a credit report, banking information, retail credit card accounts. The FBI won't say if the information about her was accurate.
BERMAN: Maryland lawmakers passing a sweeping overhaul of the state's gun laws last night. The governor has promised to sign the measure. This bans assault style weapons, requires gun buyers to be finger- printed and puts a 10-bullet limit on magazines. Opponents have threatened to petition the bill, trying to put it on a ballot for voters to decide.
ROMANS: A robber in Arizona should have quit while he was ahead. Phoenix Police say the suspect pulled a gun at a pharmacy, got away with some Oxycontin pills. About two hours later, he's at another store doing the same thing. This time, an employee puts -- points a gun at him, and he runs out empty handed. Half an hour later, he's at a third location. He gets his pills and is out the door when two citizens with guns order him to the ground. They took his weapon and held him until police arrived.
BERMAN: So officials at a middle school in Attleboro, Massachusetts, are pointing fingers but failing to explain why students with negative balances on their prepaid lunch cards were told to go hungry. About 25 children left the lunchroom without a meal after cafeteria employees at the Coehlo Middle School ordered them to throw out their lunches after discovering the kids couldn't pay for them.
School officials and the company that operates the cafeteria are both blaming the lunchroom workers for the decision. Listen to one furious mother who owed just $1 on her son's lunch card.
(BEGIN VIDEO CLIP)
JO-AN BLANCHARD, PARENT: This is bullying. That's neglect. Child abuse. He was mortified. All his friends were staring at him because he couldn't have a lunch.
(END VIDEO CLIP) BERMAN: Students were supposed to receive a grilled cheese sandwich along with some fruit, vegetables and milk when their lunch card dips into the red.
ROMANS: A White House summit of a different kind. President Obama meeting his third grade counterpart, kid president, Robby Novak, in the Oval Office. Check it out.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Come on. So this is the Oval Office right here. And I think you should try to sit behind the desk so you look a little more official.
ROBBY NOVAK, "KID PRESIDENT": Hello?
OBAMA: Is anybody on it?
OBAMA: OK. We'll make sure not to cause (INAUDIBLE). Kid president, what grade are you in?
OBAMA: Third grade?
OBAMA: Yes. How's school going?
OBAMA: It's going pretty good? OK. Because I know you've got all these other activities.
OBAMA: So much demands on your time, trying to balance being president and being in the third grade, you know? That's a lot of stuff.
OBAMA: But you seem to be handling it pretty well.
NOVAK: Very well.
OBAMA: You did good. This is a program from the March on Washington where Dr. King spoke. You heard of the "I Have a Dream" speech? So this is the original program. Somebody gave that to me. And a portrait of Abraham Lincoln. NOVAK: Yes.
OBAMA: The most famous. And one of my favorite presidents.
NOVAK: Mine too.
OBAMA: The -- any advice for me as just an ordinary president, Mr. Kid President?
NOVAK: I have one.
NOVAK: Well, it's not really advice.
NOVAK: It's how you're doing.
NOVAK: You're doing awesome.
OBAMA: You think I'm doing awesome? Thank you. That means a lot to me. I think you're doing awesome. Keep on doing the great work that you're doing. I'll try to do my best, between the two of us, maybe we can kind of get things going in -- in a good direction. Now even though we're presidents, can we still hug?
OBAMA: Is that OK? Thanks, man.
NOVAK: You're welcome.
OBAMA: All right. All right. You work hard in school, too.
OBAMA: High five. OK.
(END VIDEO CLIP)
BERMAN: That is one heck of a White House tour.
ROMANS: Look, that suit is so cute, and I love him picking up the phone and potentially -- what's this red button for?
BERMAN: Just adorable.
ROMANS: Very funny. All right. I want to bring you up to speed on the breaking news of the morning. Only 88,000 jobs created in the American economy net new jobs in the month of March. A big disappointment. Futures are down. Dow futures down 150 points. I'm looking for a big sell-off on Wall Street when it opens in about 45 minutes because of disappointment about growth in the American jobs market.
BERMAN: Could be a tough day on the markets to be sure.
Ahead on STARTING POINT, Nick Cannon is known for hosting "America's Got Talent," but he has a new passion project ending slavery. He joins us live with "The End It Movement."
You're watching STARTING POINT.
ROMANS: Nearly a quarter of a million households don't have a computer. Students unable to log on or less likely to graduate high school and go to find a good job or build a promising future.
BERMAN: This week's CNN Hero has found an innovative way to bring communities in need across the digital divide. Meet Estella Pyfrom.
(BEGIN VIDEO CLIP)
ESTELLA PYFROM, COMMUNITY CRUSADER: I grew up in the segregated south. I actually started picking beans at age six. But my father, I used to hear him say if you get a good education, you could get a good job. So we knew that education was important.
In today's times, many of our children don't have computers at home and low-income families don't have transportation to get to where the computers are. Kids who don't have access to computers after school will be left behind.
My name is Estella Pyfrom. At age 71, I took my retirement savings to create a classroom to bring high-tech learning to communities in need.
All right, let's get on board Estella's Brilliant Bus.
Estella's Brilliant Bus is a mobile learning center.
Are you ready to get on the computers?
UNIDENTIFIED MALE: Yes.
PYFROM: We want to do what we can do to make things better for all. Adults as well.
Ok. Got it.
I see the bus as being able to bridge that gap between technology and the lack of it.
UNIDENTIFIED MALE: She helps me by having one-on-one attention, if I don't get it, she helps me with this. I look forward to it a lot.
PYFROM: How are you doing here?
It's not just a bus, it's a movement. And we're going to go from neighborhood to neighborhood, keep making a difference.
(END VIDEO CLIP)
BERMAN: Making such a difference. It's so wonderful to see it.
Ahead on STARTING POINT, Nick Cannon ready to make a difference, he uses star power to help free the world. His work with the "End It Movement" next.
BERMAN: He's here live. You're watching STARTING POINT, everyone.
ROMANS: Nice to meet you.
ROMANS: Slavery is not a thing of the past. More than 27,000 people are enslaved around the world according to the global campaign to end slavery, it's called the "End It Movement". And this Tuesday the group is hoping to shine a light on slavery to get people to take a stand by organizing local events.
BERMAN: Actor and host of "America's Got Talent" Nick Cannon is leading the way. Take a look at this PSA.
(BEGIN VIDEO CLIP)
NICK CANNON, ACVOCATE, "END IT MOVEMENT": Imagine if your hands didn't belong to you, but instead belonged to someone else who exploited them for profit. Like Jenny, a 20-year-old woman trafficked from China, to New York City forced into prostitution. So for Jenny and the many millions like her, let's determine to do something.
I'm Nick Cannon. And I'm in it to end it. Join me on April 9th by drawing this red "X" on your hand for the 27 million. Logon to Enditmovement.com for more information.
(END VIDEO CLIP)
BERMAN: Nick cannon, in it to end it he joins us now here live. And Nick that number that we just heard is sort of staggering, 27 million people enslaved around the world, which is more than at any time in history.
BERMAN: Half of them are kids.
BERMAN: You know how come we don't hear more about this do you think?
CANNON: I think it is, it's one of the things where people think it's like a passe thing and you know we have so much, you know, forward movement in our society, but when you think about the world altogether and how, you know, human trafficking and slavery is something that's extremely current. And I think that's the reason why we want to use platforms like this and an opportunity to use your celebrity to spread the message. A lot of people know it's still a really big issue.
ROMANS: And it's an issue, a big issue for women.
ROMANS: A majority of people trafficked in slavery are women -- for children.
ROMANS: I mean the fact that today, right now, someone can be sold for $90 or less, it's -- it's remarkable. You have the "x" on your hand.
CANNON: Always. I've got to have the "x" and you know obviously for April 9th is the day that we want to create mass awareness and shine a light on slavery days. The name that you know, the "End It Movement" has put it together. And truly, it's like a coalition of you know seven non-profit organizations that are out there working to end slavery all around the world of all kinds.
BERMAN: You know, we were talking before we came on here. You have two-year-old twins at this point.
BERMAN: Does having kids have an effect on this? How did you get involved?
CANNON: Absolutely. I mean we all know when you have kids it changes your perspective on life and it kind of makes you one, want to be a fine example. But, too, try to leave this place a little better than when we got here and everything, so it's just one of the things when you think about, you know, my kids, this is their world, and if I can lay some interesting ground work then absolutely I'm going to go for it.
ROMANS: It's so awesome and just how lucky we all are that we were born where we were in the time we were and the circumstances in which we were.
ROMANS: In many parts of the world, I mean it's not even something that these families can imagine.
BERMAN: What do you want to see people do?
CANNON: Really, we want to see people join the movement by obviously following us on social media. You know you follow us on Twitter at "End It Movement". Also you can go to EndItMovement.com and then on April 9th it's all about putting that red "x," and just try to get it out there. You can do it by just spreading the word through your social media and being a part of what we're all trying to accomplish.
BERMAN: Can I ask you a personal question here?
CANNON: Of course.
BERMAN: And as we are looking ahead to April 9th? Last year you were hospitalized with kidney failure, right?
BERMAN: You look great right now.
CANNON: Thank you.
BERMAN: Fantastic. Well-dressed too I might add. Are you feeling well? What's the prognosis?
CANNON: Yes it was one of the things where it came out of nowhere, you know, and I -- I really jumped in, it was like ok, this is a life or death situation so at this point I have a clean bill of health. My doctor says I'm 100 percent healthy, but it takes a lot of work, dieting.
Yes I was on a renal diet for quite some time just to kind of get my system back in order and then after that, you know, lots of working out, lots of rest. That was the main problem. I wasn't getting a lot of rest and my immune system kind of crashed on me.
And -- but you know now it's just always trying to get out there and trying to spread that message as well about, you know, healthy living and kind of just being positive about the entire situation and using it as a platform to speak.
ROMANS: What is the Twitter address again?
CANNON: In it to end it.
BERMAN: April 9th is the day.
BERMAN: Red "x" on your hand.
BERMAN: Nick Cannon thank you so much for being here. We really appreciate it.
CANNON: Any time.
BERMAN: We'll be back in a moment.
ROMANS: All right. The big news this morning of course is there's the jobs report for March -- disappointing, 88,000 jobs created in the month of March. That was much, much less than anyone expected. It shows a slowdown in hiring in the United States and what we know is the jobless rate fell to 7.6 percent, but not for a good reason because almost half a million people simply stopped looking for work and they dropped out.
We have futures down about 150 points. I'm looking for a stock market sell-off at the open.
BERMAN: That is all for STARTING POINT today. I'm John Berman.
ROMANS: I'm Christine Romans.
BERMAN: Monday, we're going to be talking to Anthony Bourdain, host of the new CNN series, "PARTS UNKNOWN". Anthony Bourdain's show debuts April 14. Also Deron Williams of the Brooklyn Nets will be here and George Wendt and Cory Michael Smith, stars of the new Broadway play, "Breakfast at Tiffany's".
ROMANS: All right. "CNN NEWSROOM" with Fredricka Whitfield begins right now.