When the monthly job numbers are released, most people focus on the unemployment rate.
On many occasions, I’ve cited that number, usually to point out that the unemployment rate is far higher than the Obama Administration promised it would be if the so-called stimulus was enacted.
That episode should be additional proof that Keynesian economics is misguided.
But that’s not the issue we should be worrying about now. Instead, our concern should be what appears to be a permanent reduction in the share of the working-age population that is employed.
As I explain in this interview for Blaze TV, our ability to produce is governed by the quality and quantity of labor and capital in the economy. Unfortunately, it appears that the Bush-Obama policies of bigger government have had a negative impact.
To build upon that interview, here are the very latest numbers from the Bureau of Labor Statistics.
To be fair, the drop you see on the chart started before Obama took office. But he can be fairly blamed for the fact that there’s been no recovery.
The moral of the story is that bigger government is not a recipe for prosperity.
The burden of government spending is too high, the tax code is too punitive, red tape is hindering entrepreneurship, and various handouts are creating a dependency culture that discourages work.
Should we be surprised that the employment-population ratio is grim?
Nedlandp, government does not know how to create jobs,
[…] very relevant cartoon since the job market remains far below its potential. Something else that defenders of the law will have to […]
[…] The Overlooked Jobs Tragedy […]
[…] amusing, but keep in mind that we have an unusually high joblessness rate right now, but it would be even higher if we counted the people who shifted to this other form of […]
[…] But leftists aren’t interested in these arguments, since the wealthy also benefit. Instead, we’re stuck with Obamanomics. […]
[…] employment-population ratio is terrible, suggesting that the lower unemployment rate is really a measure of people dropping out of the […]
[…] very relevant cartoon since the job market remains far below its potential. Something else that defenders of the law will have to […]
[…] very relevant cartoon since the job market remains far below its potential. Something else that defenders of the law will have to […]
[…] amusing, but keep in mind that we have an unusually high joblessness rate right now, but it would be even higher if we counted the people who shifted to this other form of […]
[…] amusing, but keep in mind that we have an unusually high joblessness rate right now, but it would be even higher if we counted the people who shifted to this other form of […]
Part of this picture, un-examined, is how there has been such a remarkable long term trend in the number of people going onto SS disability benefits now, and how it has replaced welfare rolls which we supposedly conquered under Clinton. As the numbers swell, doubled in the last 15 years to 14,000,000 now, they too are taken out of the work force forever, and never counted in the unemployment rolls, but continue to help drain the treasury.
This American Life did a real eye opening story a couple weeks ago that is a MUST listen.
Trends with Benefits..
http://www.thisamericanlife.org/radio-archives/episode/490/trends-with-benefits
I have not spent enough time on the details to separate ephemeral short effects vs. permanent long term effects. However, instinctively, it sure seems that many of the effort-reward curve flattening incentives introduced in the last few years, and which seem to be the root cause of withdrawal from the workforce, are permanent indeed. They are part and parcel of America’s long overdue transition to a welfare state – and decline.
But the bulk of the toothpaste starts flowing out of the tube in a few short months. That is when the irreversible path towards “health-insurance-you-don’t-have-to-pay-for” first, medical price controls after, and then eventually socialized medicine, takes root amongst the American population.
A few short months away is the point when the first wave of indolence tugs along with the needy and moves ObamaCare into majoritarian support. That is when the American middle class starts identifying with the needy and starts hoping they will not be the ones ultimately called upon to pay for the nascent indolence. That is when the effort-reward flattening vicious cycle of decline epitomized in HopNChange solidifies. That is when it becomes obvious that American voter-lemmings will never escape the vortex they themselves started. That is when America’s prosperity convergence towards the world average solidifies.
Once the “indolence-is-now-a-little-easier” Obamacare incentives kick in just a few short months from now, that is when you will see the permanent indeed reduction in workforce.
Hope in redistribution is the core underlying force. Government growth and a complex tax code are just inevitable consequences of attempts to redistribute. Delusional hopes to counter decrease in motivation with central planning that slows down growth even more.
Once the American middle class — people earning 40-60k per year — become accustomed to a 15k per year subsidy, how are you going to wean them? By promising them that if they are cut off and move to a more market oriented healthcare system then prices will drop, their taxes will drop, finding work will become easier in a more dynamic economy, and their children will eventually be twice as wealthy under the compounding effect of higher growth rates? Good luck with that! There will be Greek style delusional riots in the streets if you ever try to withdraw such benefit.
The steeper part of the decline is still yet to come. “It won’t be in my lifetime” is the main hope of the voter-lemming. Think again…
You cannot fix voter-lemming. But you can plan ahead, take advantage of their stupidity, and make the best out of a bad situation.
If you break down jobs into productive, support, and anti-productive jobs, the trend is even worse than Dan’s article implies.
Anti-productive jobs are those that harm productivity, like regulators, compliance and litigation avoidance personnel. As regulation expands, more people are necessary to propagate, enforce, and comply with regulations. Not only do these people hurt productivity directly or indirectly, but because these tend to be high paying jobs, they bleed the productive workforce of some of its most competent assets.
Net job loss by itself does not reveal the migration away from productive efforts for those that are employed, caused by the dramatic increase in regulation.
[…] The Overlooked Jobs Tragedy […]
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