Yesterday’s job numbers from the Bureau of Labor Statistics demonstrate that America has yet to truly emerge from the Great Recession.
Despite White House claims, the nation still has not recovered from that greatest economic challenge since the Great Depression of the 1930’s. Government policy, which has hamstrung the free market, is largely to blame.
The White House continues to allege that much progress has been made, but a clear examination of key financial factors demonstrates otherwise.
EMPLOYMENT
The latest employment statistics from the Bureau of Labor Statistics (BLS) indicates that less than half the monthly number of jobs that should have been created to truly lessen the recession’s impact was in fact created. In addition, many of those jobs replacing those lost provided far lesser pay, and many went to immigrants as opposed to U.S. citizens who balked at the low pay levels. The percentage of people in the work force continues at near 40 year lows, and the number of long-term unemployed workers is at near historic highs.
The BLS released these notes yesterday: “Both the unemployment rate …and the number of unemployed persons … were essentially unchanged in October. Among the major worker groups, the unemployment rates…showed little or no change in October. The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged …These individuals accounted for 26.8 percent of the unemployed in October…The civilian labor force participation rate was unchanged at 62.4… The employment-population ratio, at 59.3 percent, changed little in October and has shown little movement over the past year…Among the marginally attached, there were 665,000 discouraged workers in October, little changed from a year earlier.”
Ian Murray of the Competitive Enterprise Institute (CEI) provides a worrisome analysis of the BLS report:
“… the American economy remains on life support. The unemployment rate, number of long term unemployed, and labor force participation rate are all essentially unchanged. The recovery from the great recession has been anemic… The size of the hole we are in can be seen by comparing where we are now in terms of jobs from where we would have been had the post-recession recovery followed the trajectory of past recoveries. We are now 6 million jobs behind where we should be, according to Congress’ Joint Economic Committee. The economy would need to add 516,000 jobs a month to match the pace of the average recovery at this stage. So what is different this time?
“One answer that has gotten too little attention is that the rate of regulation over the economy has increased over the past decade, including since the great recession began. Regulation has its costs—CEI’s Wayne Crews estimates the total annual burden of regulation on the economy at about $1.9 trillion. That number could support a lot of jobs….Meanwhile… the Department of Labor and National Labor Relations Board are pursuing a policy of further restrictions on employment conditions…When the nation went into recession in the early 1980s, high taxes were the largest supply-side problem to creation of new jobs. President Reagan worked with Congress to cut taxes significantly, and the result was the Reagan boom. Clearly, overly burdensome regulation is the largest supply-side problem today. A responsible President who cares about employment prospects would be working with Congress to cut regulations significantly, not imposing more of them.”
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“The ratio of workers to non-workers is nearing an all-time low. Part of the drop in headline unemployment numbers is explained by the fact that many have just given up on looking for work entirely…
“The share of long-term unemployed…People who are out of work for more than twenty-six weeks can sometimes end up permanently unemployable…
“Many who are working are underemployed. The unemployment rate is silent on those who have part-time jobs but would prefer full-time jobs…”
Other factors demonstrate the failure to adequately emerge from the Great Recession. The Wall Street Journal (WSJ) reported last week that first-time home buyers, a significant indicator of a healthy economy, has “declined to the lowest level in almost three decades…the third straight annual decline.” WSJ also reports that the minimal 1.5% growth in the economy from July through September “marked a deceleration from the second quarter of 2015” indicating that the economy is heading in the wrong direction.
Rather than stimulate the private sector, the White House has pursued a path of heavy government spending, beginning with the failed “stimulus” package that cost taxpayers almost $800 billion but failed to make a significant dent in the economy’s pace.
CNS reports “The federal government took in a record of approximately $3,248,723,000,000 in taxes in fiscal 2015 …That equaled approximately $21,833 for every person in the country who had either a full-time or part-time job in September.” The increased revenue comes from additional taxes, not increased economic activity, and represents money taken from the private sector that could have been used to create jobs.
Despite that enormous sum removed from the private sector where it could have created employment, Washington remains mired in debt. The Washington Times Notes that “…Mr. Obama’s spending agreement with Congress will suspend the nation’s debt limit and allow the Treasury to borrow another $1.5 trillion or so by the end of his presidency in 2017. Added to the current total national debt of more than $18.15 trillion, the red ink will likely be crowding the $20 trillion mark right around the time Mr. Obama leaves the White House. When Mr. Obama took over in January 2009, the total national debt stood at $10.6 trillion. That means the debt will have very nearly doubled during his eight years in office, and there is much more debt ahead with the abandonment of “sequestration” spending caps enacted in 2011.”