Monday, October 8, 2012
So 7.8 Percent Unemployment is Good News?
In a striking indication that an economy hovering barely above recession is becoming the “new normal,” the president and much of the media heralded the September unemployment figure of 7.8 percent as great news. In fact, as the Wall Street Journal puts it, “the real news . . . is that the jobs market still stinks.”
Consider some of the less-reported figures from the Bureau of Labor Statistics:
- “The unemployment rates for teenagers (23.7 percent), blacks (13.4 percent), and Hispanics (9.9 percent) were little changed.” Of course, these groups are hit particularly hard by wage control laws, particularly the minimum wage, which harms low-skilled workers especially severely.
- “Manufacturing employment edged down in September (-16,000).” Given the reams of regulations, relatively high corporate taxes, and high government-imposed costs of hiring a new employee, many manufacturers must either downsize or move off-shore to remain profitable, or shut down altogether.
- Although the “employment-population ratio” increased slightly to 58.7 percent, it remains far below the high of 64.7 percent in 2000.
- The “U-6” unemployment figure is 14.7 percent for September. This is defined as “total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons.”
And of course the unemployment figures hardly tell the whole story: Many of the existing jobs were created by government “stimulus” programs, the Federal Reserve’s inflationary policies, or direct government hires. Such jobs add little if anything to the long-term productive output of the nation in terms of real wealth, the kind that actually benefits people’s lives.
Government facilitates prosperity when it protects the rights of individuals to produce peacefully, trade consensually, and enjoy the full fruits of their labor. In many cases our government violates rights instead, and one of the consequences is the sluggish economy.
Posted in: Business and Economics
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