Tags: jobs | economy | market | labor

It’s the Job Market, Stupid

Tuesday, 10 July 2012 07:36 AM Current | Bio | Archive

In the past month, 80,000 jobs in the United States were created, versus expectations of 100,000. It’s the third monthly report of sluggish job growth, and half of those jobs were for part-time work only.

These dismal numbers continue to underscore the true weakness of the economy.

In my opinion, the most important part of the economy is putting Americans to work in meaningful, full-time jobs. Jobs that provide the opportunity for a long-term career with a middle class lifestyle and can fund a retirement.

That’s where we’ve been faltering.

Indeed, when thinking about the economy, it may be best to paraphrase Bill Clinton’s 1992 campaign slogan: It’s the job market, stupid.

This has been the slowest post-World War II job recovery. It’s been 53 months since total employment peaked in 2007, but at the current rate of job growth, we won’t hit that level again for another 4 years. In a typical recession, it takes less than 30 months to get back to the prior peak.

What can be done about the job lull in America? Unfortunately, not much.

Uncertainty has created an environment where businesses are reluctant to hire. What will the true costs of Obamacare be? How will individuals and businesses change their behavior if the Bush tax cuts expire at the end of the year? It’s impossible to tell.

Indeed, for some of the owners and managers of small businesses that I talk to, this high level of uncertainty is the biggest impediment to job creation.

There is another obstruction to job creation: the expansion of unemployment benefits. Laid-off workers can take up to 99 weeks of benefits. But even after 2 years, other programs exist to delay the reckoning with reality. Food stamp usage has surged over the past few years, hitting an all-time high in terms of absolute users and as a percentage of the population.

I’m not saying we shouldn’t have these programs — merely that they create an incentive to delay finding a new job.

There’s a solution to the jobs crisis in America: Create your own. But there’s no guarantee of success. Whether you’re successful or not, government will take a huge share in the form of regulations, licenses, and, yes, taxes on profits.

Finally, there’s the opportunity to obtain a job where the employment opportunities are. In the United States this means taking jobs in Texas or South Dakota amid the energy boom. But, mostly, it means moving overseas where better job opportunities lay.

For a nation that has prided itself on opportunity, America has fallen a long way. It may fall further. But the American values of entrepreneurialism, the rule of law, and optimism are powerful. These values can overcome the dark days today, as they have in the past.

What we most need to fix the job market is elected officials who understand the impact their legislation will have on business. Barring that, the best thing the government can do is get out of the way and let the American people get back to work.

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Tuesday, 10 July 2012 07:36 AM
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