By Akash Chougule
Media outlets around the country are celebrating the Bureau of Labor Statistic’s newly-released April jobs report. The economy added 288,000 jobs, exceeding the expected 215,000, and the unemployment rate dropped, from 6.7 percent to 6.3 percent. While at first glance these numbers signal a rebound, Americans should not be fooled by the surface-level excitement. A deeper look reveals that there remain concerning systemic deficiencies in the US economy – a sign that the nation is in need of a change of direction.
A significant portion of the drop in the unemployment rate can be attributed to people giving up looking for work. These people are no longer counted in the unemployment rate despite the fact that they do not have a job. 806,000 people left the labor force, bringing the participation rate back down to 62.8 percent, a 35-year low. At that point in 1978, most women had not yet entered the labor force.
The more accurate measure of employment, the “U-6” unemployment rate, fell from 12.7 percent to 12.3 percent – but even that is stubbornly high. U-6 unemployment measures the percent of people who have searched for a job at any point within the past year, or are involuntarily under-employed. U-6 unemployment has not been below nine percent since 2007. There is perhaps no better indicator of just how slow the economy is recovering from the Recession.
Long-term unemployment also remains high, and for those who are lucky enough to be employed, wages remained stagnant. These are all signs that though the economy may be improving slightly, too many poor and middle-class Americans are still hurting. They are still being deprived basic opportunities and mobility that is not only bereaving them of prosperity and happiness, but it is placing an unsustainable burden on taxpayers and the nation’s financial future.
Tellingly, Politico began their report saying the jobs numbers show a “clear and comforting message for the White House and nervous Democrats: the economy is not tanking again.” The fact that the left can be content with the situation the economy sits in today should be a sign to the American people that they have accepted a pathetic new normal.
Liberals will say that their tired, old policy prescriptions of extending unemployment benefits, raising the minimum wage, and more government spending and intervention are the answer, but they clearly are not.
In a tell-all piece for the National Review, economist Stephen Moore explains that had the economy recovered under President Obama as fast as it did under President Reagan, it would be $2 trillion larger today. Under President Reagan, unemployment, poverty, and the “misery index” fell while wages, GDP, and median family income grew. Free market reforms worked under President Reagan, and they can work again today.
America is in desperate need of an economy that gets government out of the way – one that encourages and empowers people to find work, instead of giving up looking for it. The nation needs jobs with wage mobility and opportunity. And we need a market that fosters innovation and unleashes entrepreneurship.
The mainstream media and the left may spin the latest job report as a vindication of President Obama’s economic policy, but American families, workers, and taxpayers know that we deserve better.