Sunday, September 5, 2010

The Unemployment Rate, a Sign of Dismay

Another month of disappointing employment statistics comes in as this country dealt with yet another month of net job loss: 54,000 to be exact.  President Obama, a.k.a. Sir Hope 'n Change, has once again shown us that change is not necessarily a good thing, and to rely on something like hope doesn't change the fact that unemployment went back up to 9.6%.  What makes the numbers more disturbing is, as AEI scholar Henry Olsen points out, is the percentage of Americans who have jobs, which, of date, has almost approached that of the early 1980s:

Olson rightfully states his worries:

The import of the employment rate is clearer when one compares it and the unemployment rate to data from last August. America's adult population has risen by 2 million people since then, but the number of adults with jobs has dropped by 180,000. The unemployment rate declined slightly despite these numbers, from 9.7 percent to 9.6 percent, because over 2.3 million people have left the labor force entirely, so discouraged they are no longer even looking for work. The employment rate more accurately reflects that despair, sliding down from 59.1 percent to 58.5 percent.

What is bothersome is that these worries go beyond the short-term.  As the Brooking Institute illustrates, this is going to affect the long-term, as well, particularly for young adults.  Statistically speaking, young adults (i.e., age 18-24) are have been hit approximately twice as hard as everybody else.  Even setting aside young adults for a moment and looking at the bigger picture, it is going to take anywhere from five to twelve years for this country to return to pre-recession levels, and this presumes that we will have a consistently sizeable job growth.

I understand why many are starting to label this economic upheavel "the Great Recession."  Unless an economic miracle comes along, we are looking at a long road to recovery.  It's hard not to be a pessimist during these times, especially with an incompetent present.  But I am going to make a prediction here.  Unless Obama does something to prevent the tax hikes that are scheduled to take place on January 1, 2011, he is only prolonging the recession.  If he does not step in and make the taxation system less burdensome for [small] businesses, I can guarantee that he will be a one-term president.

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