Saturday, July 19, 2014

The real unemployment rate

Wapo provides an important corrective to the Happy Days are Here Again cheers coming from the student and loyal alumni sections of Obama We Believe U.

One of the most troubling aspects of the lackluster economy is the number of Americans who have dropped out of the labor force.  Today’s labor force participation rate is only 62.8 percent — the same rate as in March 1978 — and is 1.8 percent lower than it was four years ago. Since June 2010, more than 8 million Americans have completely dropped out of the workforce. Think about that. To be clear, since the last midterm elections, 8 million people have quit working or looking for work, while only 7 million people have started working.

Bear with me, because this is important. If the 8 million people who have dropped out of the workforce in the past 4 years rejoined the workforce tomorrow and starting looking for work, the unemployment rate would shoot up from 6.1 percent to 11.2 percent. And guess what? If the unemployment rate today was properly adjusted to something like 11.2 percent, it would be almost 2 percent higher than the unemployment rate was in June 2010. Despite the cheerleading and parsing from the Democrats about our economic “recovery,” in many ways, the overall job picture in the United States is worse now than it was four years ago.

Back in 2009 I predicted that if the Democrats persisted with their statist agenda that we would incur a capital strike that would result in slower than trend growth and employment.  I take no pleasure in being proven right.  After five and a half years the economy is barely ticking over and unemployment is down only because - anesthetized by massive expansions in social welfare spending - millions have given up hope for ever having a job.

Yet the President and his partisans are opening the borders to millions more poor, unskilled immigrants.  It's as if he wants a huge underclass that is dependent on the Democrat party for it's daily bread.

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