Bursting With Pride (and Ignorance)
In a recent speech (7/17) in Wilmington Delaware President Obama was "bursting with pride" regarding the success that his administration's policies have had in reviving the U.S. economy since he took office.
Our businesses have now added nearly 10 million new jobs over the past 52 months …Construction and housing are rebounding. The auto industry is booming.... Manufacturing is adding jobs for the first time since the 1990s. The unemployment rate is at its lowest point since September of 2008.
Not bad. Ten million new jobs. Construction and housing rebounding. Auto industry booming. Unemployment at its lowest since 2008.
Jobs and unemployment figures are certainly what we hear about in MSM. They have been the standard benchmarks by which the economy and certainly the jobs market is judged. They can, however, be very misleading -- even apart from the fact that the government counts as employed anyone who did any work (“at least one hour”) for pay or profit during the survey reference week.
Putting those benchmarks in context paints a very different picture. Job growth needs to be placed in context with the growth of the labor force. If job growth does not keep pace with labor force growth then that is hardly progress. In fact, job growth has not kept pace with the growth of the labor force. The labor force participation rate has declined to a 36 year low.
A shrinking workforce saps the U.S. of the manpower needed to boost the expansion up to a higher level, keeping the world’s largest economy merely plodding along. It also undercuts the theory that sustained growth alone will be enough to attract more Americans, from students to people discouraged over employment prospects, back into the hunt for jobs.
The unemployment rate, then, may be trending lower but that may just mean that there are fewer people actively looking for jobs. It doesn't necessarily mean that a greater percentage of the labor force has found jobs. It could mean that a greater percentage of the labor force have given up looking for jobs because they can't find any kind of decent full-time employment. In fact that is what it means in this case. Welfare rolls are swelling and food stamp enrollment is up 70% under Obama. And, to put the clincher on the whole jobs picture, 20% of US households have no one working.