Is America hard at work? Or hardly working?
I ask this because Thursday's Labor Department report for June found
yet another 430,000 Americans of working age (16 and older) dropped out
of the workforce.
Over the last year, only 1.3 million Americans of working age have
entered the workforce, even as the population of this same demographic
increased by more than 2.8 million. Just over 1 million members of this
group found jobs. That's right -- of the new additions to the working
age population, less than four in 10 found jobs.
The newspapers touted the reduction in the unemployment rate to 5.3
percent as a cause for celebration. Yet for every three Americans added
to the working age population (16 and older), only around one new job
(1.07) has been created under Obama. At this pace, America will soon
officially have a zero unemployment rate. But that will only be because
no one will be looking for work.
Here's the story the media didn't report. There are now more than 100
million Americans over the age of 16 that are not working. Usually when
the economy picks up, American workers who have been laid off stampede
back into the workforce to earn a paycheck. Now we have a better job
market with fewer workers.
This is partially explained by baby boomers retiring. But the largest
reduction in the workforce has been among the millennials. Today the
labor force participation rate for the 16 to 24 age group is 55.1
percent, down from 60.8 percent a decade ago and more than 66 percent
back in the late 1990s. We're headed toward becoming Greece, where half
the young people don't work.
No one knows for sure why the labor force has shrunk so much under
Obama. But it's a good bet that policy mistakes have played a big role.
Minimum wage increases are pricing the young out of the workforce.
Welfare programs are effectively paying people not to work. Too many
Americans have high school and even college degrees that are next to
worthless to employers.
Jeb Bush, Chris Christie, Rand Paul and other Republicans say that
America could and should strive for 4 percent growth -- up from the
pitiful 2 percent of the last six years. But this will certainly require
a growing workforce. We need at least 10 million more Americans working
to get growth up to 4 percent -- which happened under presidents Reagan
and Clinton. And to get there we need national policies that reward
work and discourage idleness.
Which brings us to the paradox of the American economy. We have 10
percent of the workforce unemployed, in part-time work or dropped out of
the workforce at a time when businesses say they can't find willing
workers. Wages were flat last month -- so higher pay isn't going to
induce a stream of workers into jobs.
Some say the problem is we are such a rich nation that Americans
value leisure more than work. I doubt that's the problem. If the great
American work ethic is gone, it's only because dumb anti-work government
policies have stolen it.
