The Lost 5 Million

Five million Americans have been thrown under the bus.  They are walking around dazed, outcast, and defeated.  Worst of all, they are not even counted in official tallies of the unemployed.  They are those whom the Obama administration simply wishes to ignore: working-age adults who have dropped out of the labor market completely.  They are those for whom the economic recovery underway should have created jobs but has not.

Despite Obama's latest assertion of having created 4 million jobs in the last 26 months, the reality is that in the past two years, 5.4 million workers have left the job market entirely.  These are the 5.4 million whom academics like to call "discouraged workers," and as far as the administration and its media cheerleaders are concerned, they do not exist.

The fact is that these millions of Americans are not so much discouraged as they are hopeless.  They are working-age adults who, in a normal economic recovery, would have found jobs in an expanding economy.  But this recovery -- one can hardly call it that -- is not at all normal.  The U.S. economy has expanded on average at something like 2% since Obama took office, and now, with the latest GDP growth figures for the first quarter of 2012 revised downward to 1.8%, the economy seems to be slipping back toward stagnation, if not recession.

During a normal period of recovery, the economy grows at a rate of more than 4%.  This was the case during the Reagan recovery of the 1980s, the Clinton recovery of the 1990s (with a major assist on spending restraint from Newt Gingrich), and the Bush recovery of the mid-2000s.  But ever since Obama took office, the economy has suffered.  Under constant attack by a hostile administration, businesses have decided not to expand, or they have moved or expanded their operations overseas.  The result is that 4.7 million fewer jobs have been created in the past three and a half years than would otherwise have been the case -- almost enough to provide a job for every one of those who have dropped out of the labor market.

Those 5.4 million include older workers who have lost their jobs and decided to apply for disability benefits or exhaust their 401(k) savings while waiting to file for Social Security at age 62.  Many of those who retire early are now consigned to live out their lives in poverty.  For this cohort, early retirement means that they will not enjoy the golden years they had planned, and many will outlive their savings entirely.  And for this, they have President Obama to blame.

Not all of the lost 5.4 million are older workers, however.  A large number are young men and women in their teens and twenties who have never worked at full-time jobs.  They are, in many cases, well-educated young people who have completed college degrees but who are unable to find suitable employment in this stagnant economy.  In fact, 40% of young adults aged 24 to 35 (4.6 million of them) are living with their parents, according to the 2010 census.  In large numbers, those who have found employment are working at low-paying jobs in the "hospitality" sector, as the Labor Department calls it.  This has been the fastest-growing sector of the economy in recent months, and it includes food service.  Since February 2010, 576,000 jobs have been added in restaurants and bars alone.

The educated young people who fill these jobs -- and those who have no jobs at all -- are falling permanently behind in their careers.  Over the course of their lives, they will achieve less, earn lower salaries, and accumulate less in retirement savings.  Compounded over the course of a 40-year career, the effects of this slow start are significant.  For this less-than-rosy future, the young have the president to blame.

It is not as if Obama lacked the means to create more jobs.  Simply by lowering taxes and reducing regulations, President Reagan created the greatest economic boom in modern American history.  At this point during the Reagan recovery (the first quarter of the fourth year in office), the economy expanded by 7.4%.  Now, at exactly the same point in the Obama presidency, it is growing at 1.8%.  That slow growth is the reason for the lack of jobs and for the tragic loss of hope for so many Americans.

Obama had every opportunity to create jobs.  His ban on mountaintop mining in the Appalachians, a region of perennial high unemployment, has cost many thousands of good jobs.  The Environmental Protection Agency's veto of Arch Coal's Spruce Mine permit, which the American Coal Council calls "drastic and unprecedented," is just one in a series of job-killing actions taken by the Obama EPA.  Obama's closure of the Gulf of Mexico to offshore drilling and continued slow permitting has cost "tens of thousands of jobs," according to one informed source.  His refusal to approve the Keystone XL pipeline project is costing an estimated 149,000 jobs, according to TransCanada.

Furthermore, the uncertainties caused by provisions in ObamaCare and Dodd-Frank have discouraged investment, particularly among small businesses that create the lion's share of new jobs in America.  Obama's refusal to allow untaxed repatriation of overseas earnings by American corporations has blocked investment of $1 trillion in the U.S. economy.  A tax holiday for overseas earnings could add 2.9 million jobs, according to the U.S. Chamber of Commerce, yet Obama has ruled out repatriation on ideological grounds.  It is, after all, a business-friendly measure.

Obama's threats to raise taxes on the rich have also cut jobs by precipitating capital flight on an unprecedented scale.  Affluent Americans are renouncing their citizenship and fleeing in record numbers to Singapore, the Bahamas, and other tax-friendly locales.  Each one of those wealthy citizens has taken thousands of jobs with him, and for this the president is to blame.

If the president had "focused like a laser beam" on job creation, as he promised to do in 2009, he would not have found it that difficult to create jobs.  But instead of following up on his promise, Obama treated job-creation as a mere photo op.  Having promised to focus on job-creation, he promptly forgot about it and flew off on vacation.

Had the president remained on vacation, things might have gone well.  Instead, he chose to squander nearly a trillion dollars in his 2009 stimulus bill, a fraudulent measure that has stimulated nothing except debt levels.  He then followed up with a proposal for another $447 billion giveaway, which Congress had the good sense to defeat.

Obama also had the opportunity to lower corporate taxes across the board, a measure that would have spurred job-creation, but taxes for American corporations remain the highest of any major developed economy.  Meanwhile, he has blown $100 billion in an attempt to prop up green energy companies that were supposed to create 5 million jobs.  In one case after another, however, those green companies have gone bust, and those 5 million jobs have not been created.  Instead, 5.4 million have been lost.

There can be no doubt as to who is responsible for those lost jobs, and for the lost dreams of each of those 5.4 million Americans.  For the suffering of those who have dropped out of the labor market entirely, as well as for the 21 million (14% of the labor force) who are officially counted as unemployed or underemployed, there is only one person to blame.  Come November, those 26.2 million Americans who are unemployed, underemployed, or no longer looking for work need to remember who was in charge the last four years and vote accordingly.  These people should have plenty of time to get to the polls and vote.  After all, they're not doing much of anything else.

Jeffrey Folks is the author of many books and articles on American culture, including Heartland of the Imagination (2011). 

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