Haven’t you heard? The economy is in recovery!
At least, I’m pretty sure that’s what we’ve been told…
At 7.4%, the unemployment rate is the lowest it’s been since Obama took office. Recently, Obama said in a speech that he is focused “like a laser” on jobs.
Here’s a reality check: The Labor Participation rate, which measures how many Americans are in the workforce, is the worst it’s been since Obama took office. In fact, it’s the lowest it’s been in 34 years!
The labor participation rate provides a better picture of the job market in America because, unlike the unemployment rate, it takes into account the millions of people who have simply given up and stopped looking for work.
That’s right. When someone stops looking for work, the official “unemployment rate” actually improves just as if that person had found a job. Even though that person is still very much unemployed, technically speaking.
So while the official “unemployment rate” is 7.4%, the Labor Participation Rate is now hovering at about 63%, which means that 37% aren’t working. Some of those are retired, but millions more simply gave themselves over to permanent unemployment during the recent recession. They dropped out of the labor pool altogether. Record numbers of Americans have gone on disability under Obama’s watch. And no conversation about jobs in America is complete without taking those facts into account.
Labor Participation numbers are likely to get much worse in the coming years, as the Obamacare health insurance mandate kicks in. Employers have already started cutting back hours, and reducing staff in order to skirt the insurance premiums they can’t afford.
As Sally Pipes pointed out recently at Forbes, Obamacare actually gives small businesses a strong incentive not to hire low-income workers. “A company faces a penalty of $3,000 for every worker who gets subsidized health insurance in Obamacare’s exchanges.”
Currently, the black unemployment rate is twice that of whites. The hiring cutbacks related to the insurance mandate will make that problem even worse.
But, don’t worry, because the president is focused “like a laser” on jobs.
Does that make you feel better?
Nathan Harden is editor of The College Fix and author of the book SEX & GOD AT YALE: Porn, Political Correctness, and a Good Education Gone Bad.