The further to the left or the right you move, the more your lens on life distorts.

Tuesday, June 10, 2014

Better Judgment

In recent months, our dismal economy has been overshadowed by other bad news that has lead many to question the competence, veracity, and judgement of this administration. In fact, the economy—essentially a jobless recovery—has been so bad for so long that it's tempting to shrug your shoulders and move on the other concerns. Unless, that is, you're unemployed, under-employed or have given up looking for a job entirely.

The White House and its shrinking band of Democratic supporters continually tell us that jobs are their number one priority. In fact, Barack Obama recently said:
"what I believe unites the people of this nation . . . is the simple, profound belief in opportunity for all—the notion that if you work hard and take responsibility, you can get ahead." And in his weekly address on Saturday, he repeated his strong appeal to young people: "As long as I hold this office, I'll keep fighting to give more young people the chance to earn their own piece of the American Dream."
The problem is that the president's words don't match his actions, his policies, and most important—the results.

Although every age group encounters a dismal job market today, no group has been impacted more serverely than young people. Andrew Puzder provides some statistics:
  • In February the Bureau of Labor Statistics (BLS) recorded the lowest percentage of 16- to 19-year-olds working or actively looking for work (32.9%) since the bureau started tracking the data in 1948 ...
  • Over the past two years, the BLS has recorded some of the worst labor participation rates for 20- to 24-year-olds since 1973, when the Vietnam War was beginning to wind down. In August 2012, the 69.7% rate was the lowest since '73. The second-lowest (70%) came in March last year. This year, the third-lowest rate came in April (70.2%). May's rate was a still-miserable 71%.
  • Looking at the seasonally unadjusted data—which is what the BLS makes publicly available—for 25- to 29-year-olds, the April 2014 labor-participation rate was the lowest the BLS has recorded since it started tracking the data in 1982 (79.8%) ...
The Obama administration would have us believe that all of this is beyond their control, that the crash of 2008 was insurmountable, and that their economic programs were appropriate. The results indicate otherwise. In his single-minded attaempts at social justice, this president has created significant impediments to job growth, and as a consequence, the young are suffering.

Puzder comments further:
Five years of 2% average yearly GDP growth simply doesn't produce enough jobs to absorb the natural increase in the labor force, and over the past eight quarters GDP growth has averaged only 1.7%. Between May 2008 and May 2014, BLS data show that the employable population increased by 14,217,000 while the number of people employed actually decreased by 94,000 and the number of people unemployed increased by 1,404,000. It remains a bad time for young people to be looking for jobs.

Nonetheless, various states and municipalities have increased their minimum wage, thereby increasing the cost of employing inexperienced workers. Minimum-wage jobs have always been a gateway to better opportunities. In making hiring decisions, businesses must weigh the quality and value of work that entry-level employees produce against the cost of employing them. For many businesses in high-minimum-wage states or municipalities—Seattle leads the list, having approved a move to a $15 minimum wage—that trade-off is no longer working.

The bottom line on labor: Make something less expensive and businesses will use more of it. Make something more expensive and businesses will use less of it. The Congressional Budget Office has forecast a loss of 500,000 jobs should the president's proposal to increase the federal minimum wage to $10.10 an hour become law.

The CBO also forecast that this increase would lift a number of people who already have jobs above the poverty threshold. For 500,000 unemployed people, however, that's 500,000 opportunities American businesses will never create.
What we have seen over the past 5.5 years is a fantasy economic plan—one in which "social justice," high taxes, increasingly onerous regulations, and new government entitlements that further burden business, have acted as a brake on our economy. The result is sluggish growth and no jobs. When they voted in large numbers for Barack Obama in 2008, young people believed in 'hope and change.' The harsh reality of Obama's economic policies should be an object lesson for every young person who allowed wishful thinking to cloud better judgment.