Get unlimited digital access to baltimoresun.com. $0.99 for 4 weeks.
News Opinion Op-Eds

U.S. labor numbers don't tell the labor story [Commentary]

The Labor Department is expected to report this week that the economy added 235,000 jobs in July, and the unemployment rate remained steady at 6.1 percent. But that hardly tells the story.

The jobless rate may be down from its recession peak of 10 percent, but much of this results from adults — discouraged by the lack of decent job openings — having given up altogether. They are neither employed nor looking for work.

Only about half of the drop in the adult participation rate may be attributed to the Baby Boom generation reaching retirement age. Lacking adequate resources to retire, a larger percentage of adults over 65 are working now than before the recession.

Many Americans who would like full time jobs are stuck in part-time positions because businesses can hire desirable part-time workers to supplement a core of permanent, full-time employees, but at lower wages. And Obamacare's employer health insurance mandates will not apply to workers on the job less than 30 hours a week.

Since 2000, Congress has enhanced the earned income tax credit and expanded programs that provide direct benefits to low-income workers, including food stamps, Medicaid, Obamacare and rent and mortgage assistance.

Virtually all phase out as family incomes rise (either by securing higher hourly pay or working more hours), and they impose an effective marginal tax rate as high as 50 percent. Consequently, these programs discourage work and skills acquisition and encourage single parents and one partner in two-adult households not to work. Often, they motivate single people to work only part-time.

Undocumented immigrants face more difficulties accessing these programs, and lax immigration enforcement permits them to openly take jobs that government benefits discourage low-income Americans from accepting.

Employers can, intentionally or unintentionally, abuse the H-1B visa program, which permits businesses to employ foreign workers when qualified Americans are unavailable. Americans may be overlooked because they demand higher wages or are not networked with immigrants who are already employed in technical and managerial positions.

The economy has created only about 6 million new jobs during the Bush-Obama years, whereas the comparable figure during the Reagan-Clinton period was about 40 million. A recent study by the Center for Immigration Studies indicates that virtually all the new jobs created since 2000 went to immigrants, whereas none were created for native-born Americans.

Adding in discouraged adults who say they would begin looking for work if conditions were better, those working part-time but say they want full time work, and the effects of immigration, the unemployment rate becomes about 15 percent — and that is a lower bound estimate.

Many young people are being duped both by unscrupulous for-profit, post-secondary institutions as well as accredited colleges and universities with low admission standards to enroll in useless programs. They would likely be in the labor force now but for easy access to federally sponsored loans, and they will end up heavily in debt.

Adding in these students, the real unemployment rate among U.S. citizens and permanent residents is at least 18 percent.

Since 2000, GDP growth has averaged 1.7 percent per year, whereas during the Reagan-Clinton years, it was 3.4 percent. The reluctance of both Presidents Bush and Obama to confront Chinese protectionism and currency manipulation and open up offshore oil for development have created a huge trade deficit that sends consumer demand, growth and jobs abroad.

New business regulations, more burdensome than are necessary to accomplish legitimate consumer protection and environmental objectives, exacerbate these problems.

All of this suppresses wages except for the most skilled and talented workers.

No surprise, average family income, adjusted for inflation, has fallen from about $55,600 in 2007 to $51,000 even as the gap between families at the bottom and top widens.

Peter Morici is an economist and business professor at the University of Maryland, national columnist and five-time winner of the MarketWatch best forecaster award. Twitter: @pmorici1.

To respond to this commentary, send an email to talkback@baltimoresun.com. Please include your name and contact information.

Copyright © 2015, The Baltimore Sun
Related Content
  • We need undocumented immigrants as much as they need us [Letter]
    We need undocumented immigrants as much as they need us [Letter]

    Commentator Jonathan David Farley feels as sanguine about detaining immigrant children in prisons before sending them back to the squalor from which they came as he does informing us of his academic credentials, proving once again that a career in academia may confer knowledge without wisdom...

  • Jews, outnumbered by Muslims, suffer under mob rule
    Jews, outnumbered by Muslims, suffer under mob rule

    In the wake of the terrorist attack on a kosher market in Paris, Israeli Prime Minister Benjamin Netanyahu asked French Jews to come home.

  • Baltimore: Gateway to America
    Baltimore: Gateway to America

    The Baltimore City Council just promulgated a new motto for the city of Baltimore: "The Birthplace of The Star Spangled Banner." I would like to suggest another, perhaps one that may also be shared with the state of Maryland: "The Gateway to America."

  • Who's watching the kids?
    Who's watching the kids?

    Quality, affordable child care. It was the first item on President Obama's shopping list in his State of the Union address. If the future is going to be about helping the struggling middle class, he said, quality, affordable child care for working parents is the linchpin.

  • A path forward for responsible gas shale regulations
    A path forward for responsible gas shale regulations

    Newly inaugurated Gov. Larry Hogan and his team have only a few weeks to review and take action on the previous administration's proposed "gold standard" rules governing oil and gas development in Western Maryland, or the regulations will go into effect.

  • Partnership and tolerance over partisanship
    Partnership and tolerance over partisanship

    Multitudes of Marylanders are enthusiastically celebrating the  inauguration of our state's 62nd governor, but some others — plagued with reservations and doubt — are skipping out on the festivities.

Comments
Loading