As someone who has been out of work in the past few years, I have first hand experience with the subject. Let me offer a couple of observations.
Government is not the answer. Anytime government gets involved there is a very high risk that money will get spent and nothing will change. Remember stimulus 1? We were assured that if this money were spent, unemployment would never go above 8%. And with unemployment at 9.1%, the administration wants to try stimulus 2. No thanks.
What are the real unemployment numbers? No one wants to really talk about that because it would mean having to admit that the real number is much higher. Quoting from the most recent data provided by the Bureau of Labor Statistics (BLS), there are 14 million people unemployed, officially, with a labor force that has increased to 153.6 million in August. That’s where the 9.1% comes from.
But the BLS also reports 2.6 million people “marginally attached to the labor force”. This category refers to people who have been out of work over the last 12 months, ready and available for work, but had not looked for a job over the last 4 weeks. I’m still not sure I understand this categorization, certainly someone who has been out of work for 12 months should qualify as unemployed. The quibbling over details here is clearly designed to hide the real numbers.
2.6 million plus 14 million is 16.6 million which is 10.8% unemployment. The psychologically dreaded 10% unemployment number could be easily avoided if one can find a way to finesse the reporting categories. How bad is it really? Some commentators have said the real unemployment numbers are 16% or higher. Donald Trump said it was 20%+ in his interview with Greta van Sustern last week. Personally, I am quite sure its something above 10.8%.
Sadly, this is not the first time employment data has been misrepresented. Remember how the “Green Economy” would generate 30,000 jobs? The report that was quoted by many in Colorado State and Federal government used a number of statistical machinations to “fluff up” the numbers. Workers who put insulation in your home were counted as part of the “Green Economy” as were a fraction of the appliance manufacturers workforce, since effort to reduce energy consumption is a part of that industry.
Attempts by government to increase employment have been mediocre. The way government creates jobs is by adding more government workers. Which this administration did like crazy in its first year. This is not how we grow the economy. Every dollar spent by government is at the expense of someone who works for a living. It robs the consumer of discretionary dollars that can be spent in the real economy. When things get bad enough, government spending robs people of their ability to pay for necessities. This isn’t how it’s supposed to work.
More disturbing is the trend in the number of manufacturing jobs added per month. The manufacturing sector added 14,000 job per month in the second quarter, compared to 35,000 jobs per month added in the first quarter. Not a good trend.
There are two big lessons here. One is that manufacturing is where the jobs are. American jobs and American manufacturing. Our politicians have been running down the manufacturing sector for the last 20 years. Second is that government is not the answer. Americans and American ingenuity are. So let’s agree to let American’s get about the business of inventing the future and get the roadblocks out of the way.