The Awful Jobs Picture: 6.2% Unemployment Is Only the Beginning

by John HinderakerAugust 1, 2014

The Labor Department reported today that the economy added 209,000 jobs in July as the official unemployment rate rose to 6.2%. But, as Peter Morici explains, that dismal unemployment number only begins to tell the story:

Adding in discouraged adults who say they would begin looking for work if conditions were better, those working part-time but say they want full time work, and the effects of immigration, the unemployment rate becomes about 15 percent—and that is a lower bound estimate. …
Many Americans who would like full time jobs are stuck in part-time positions, because businesses can hire desirable part-time workers to supplement a core of permanent, full-time employees, but at lower wages. And Obamacare’s employer health insurance mandates will not apply to workers on the job less than 30 hours a week.

Young people have been hit hardest:

Many young people are being duped both by unscrupulous for-profit, post-secondary institutions—as well as accredited colleges and universities with low admission standards—to enroll in useless programs. They would likely be in the labor force now but for easy access to federally sponsored loans and will end up heavily in debt.
Adding in these students, the real unemployment rate among U.S. citizens and permanent residents is at least 18 percent.

Morici makes important points about the role of both our welfare system and illegal immigration in perpetuating low levels of labor force participation:

Since 2000, Congress has enhanced the earned income tax credit and expanded programs that provide direct benefits to low-income workers, including food stamps, Medicaid, Obamacare, and rent and mortgage assistance.
Virtually all phase out as family incomes rise, either by securing higher hourly pay or working more hours, and impose an effective marginal tax rate as high as 50 percent. Consequently, these programs discourage work and skills acquisition and encourage single parents and one partner in two adult households not to work. Often, these motivate single people to work only part-time.
Undocumented immigrants face more difficulties accessing these programs, and lax immigration enforcement permits them to openly take jobs that government benefits discourage low-income Americans from accepting.

When the supply of workers exceeds the demand for work, it should be no surprise that wages are stagnant, or worse:

No surprise, average family income, adjusted for inflation, has fallen from about $55,600 in 2007 to $51,000 even as the gap between families at the bottom and top widens.

In view of this dismal picture, it is almost beyond belief that the administration, and even some misguided Republicans, want to import tens of millions of unskilled, low-wage foreign workers.

http://www.powerlineblog.com/archives/2014/08/the-awful-jobs-picture-6-2-unemployment-is-only-the-beginning.php