Heidi Schierholz’s op-ed for CNN strips away the administration’s spin that the economy is recovering. It isn’t. Here’s Ms. Schierholz’s explanation:
According to Congressional Budget Office estimates, if the labor market were healthy, the labor force would number about 159.2 million. But the actual labor force numbers just 155.8 million. That means about 3.4 million “missing workers” are out there — jobless people who would be in the labor force if job opportunities were strong.
Given the weak labor market, they’re not actively looking for work and so aren’t counted. If those missing workers were actively looking, the unemployment rate would be 9.4%.
The White House has repeatedly said that the key to growing the economy is to grow the middle class. Here’s a recent example of their spin:
While more work remains to be done, today’s employment report provides further confirmation that the U.S. economy is continuing to recover from the worst downturn since the Great Depression. It is critical that we remain focused on pursuing policies to speed job creation and expand the middle class, as we continue to dig our way out of the deep hole that was caused by the severe recession that began in December 2007.
The flaw in the administration’s thinking is that increasing demand for products is the key to growing the economy. It isn’t that this strategy hasn’t worked in the past. It’s that it isn’t working this time. That’s because small businesses are getting hit with this administration’s extraordinary burden of regulations.
While Wall Street prospers thanks to their army of K Street lobbyists, small independent businesses have gotten hammered. This administration’s hostility towards small and medium-sized companies is frightening.
We need 8.3 million jobs to get back to the prerecession unemployment rate, considering the 2 million jobs we are still down from the start of the Great Recession in December 2007 plus the 6.3 million jobs we should have added since just to keep up with normal growth in the potential labor force.
Over the past three months, we’ve added 175,000 jobs a month. At this rate, it will take six years, until the middle of 2019, to return to a healthy labor market.
Repealing the PPACA and aggressively increasing fossil fuel energy production would transform today’s economy from the sluggish millstone of the Great Stagnation into a rapidly expanding economy that creates 250,000-350,000 full-time jobs a month for 3-5 years.
It’s time to be blunt with this administration. Job creation stinks. Economic growth is stagnant. Wages have shrunk. Employers have shrunk employees’ hours to avoid the penalties of the PPACA as much possible. If the Fed wasn’t pumping in $1,000,000,000,000 a year into the economy, we’d be in another major recession.
The reason we are having such a sluggish jobs recovery is not complicated — there is simply not enough work to be done. Economists refer to this as weak aggregate demand. Another way to say this is that demand for goods and services hasn’t picked up enough for businesses to ramp up hiring.
There’s a simpler way of putting it. When families have little disposable income, they can’t afford much more than paying their rent or mortgage, heat or cool their homes and feed their families. That won’t lead to a strong economy.
Check back later today for the second in this series.
Technorati: Obama Administration, The Great Stagnation, The Great Recession, Unemployment, Laborforce Participation Rate, Part-Time Nation, PPACA, Overregulation, Democrats, Heidi Schierholz, Capitalism