Here’s What Biden Admin Apologists Aren’t Telling You About The Unemployment Rate

Here’s What Biden Admin Apologists Aren’t Telling You About The Unemployment Rate

By E.J. Antoni |

Americans consistently voice their disapproval on the state of the economy in recent polls, largely because of the stratospheric cost of living. But apologists for the Biden administration point to the low unemployment rate of 3.9% in April as proof of the economy’s strength.

Yet this is a hollow talking point since the real unemployment rate is likely between 6.5 and 7.7%.

The unemployment rate is the percentage of people in the labor force who don’t have a job. That means the unemployment rate can change if either the number of people unemployed or the total size of the labor force changes.

The shocking reality is that somewhere between 4.7 million and 7 million people who aren’t working today are not included when calculating the unemployment rate. That artificially reduces the figure.

The reason these millions of Americans are uncounted began with the events of 2020.

When the government instituted draconian lockdowns across most of the economy in response to the COVID-19 outbreak, over 17 million people became unemployed, and another 8 million people immediately left the labor force.

As the economy slowly reopened across the country, millions of people began returning to work. That, of course, drove down the unemployment rate by reducing the number of unemployed people. Some of those who left the labor force also returned and eventually found jobs, further reducing the unemployment rate.

But there were also millions who left the labor market entirely and never returned. As such, they were no longer counted among the unemployed nor in the labor force. This pushed the unemployment rate down even more.

If those millions of people were to suddenly look for work again, it would greatly increase the labor force, but it would also increase the unemployment rate, at least until those job-seekers found work.

Official government data point to just how many workers are missing from the labor market today. Several metrics show a large gap between their current reading and their pre-pandemic trends. These include the employment level, the number of non-farm payrolls, the employment-to-population ratio and those not in the labor force.

The gap is between 4.7 million and 7 million people, all of whom are not working but are excluded from the unemployment rolls. If they were still counted as jobless members of the labor force, the unemployment rate would jump to between 6.5% and 7.7%.

The latter figure is almost twice the official unemployment rate. Even 6.5% would represent a significant spike.

Looking only at the unemployment rate can give a distorted view of the labor market. If unemployed people are looking for work and then get jobs, that causes the unemployment rate to fall. But, if those same people give up looking for work and leave the labor force, it has precisely the same effect on this metric.

Using additional data provides a better gauge of the labor market’s health and workers’ jobs satisfaction. Real, or inflation-adjusted, earnings are a good example—and they have plummeted.

While the average American worker’s weekly paycheck has increased $147 from January 2021 through April 2024, those earnings buy $47 less because prices have risen so much faster than incomes.

This has caused many Americans to work extra hours or pick up a second job. Among renters, more than one-fifth of them have taken on another job in order to pay their rent on time in the last few months.

That’s noteworthy because whenever someone is hired, whether it’s that person’s first or fourth job, it’s still counted as an additional payroll in the government’s monthly job statistics. With millions of Americans picking up additional work to try and make ends meet for their families, the number of jobs has risen much faster than the number of people employed.

Simply touting a low unemployment rate provides a view of the labor market that is at best incomplete and at worst deceptive. A comprehensive view of economic conditions for the working class shows why they are so unhappy: inflation has made it impossible for them to get ahead, no matter how many jobs they work.

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Originally published by the Daily Caller News Foundation.

E.J. Antoni is a contributor to the Daily Caller News Foundation, public finance economist and the Richard F. Aster Fellow at The Heritage Foundation, and a senior fellow at the Committee to Unleash Prosperity.

Here’s Why The Economy Isn’t Out Of The Woods Just Yet

Here’s Why The Economy Isn’t Out Of The Woods Just Yet

By Alfredo Ortiz |

Friday’s jobs report is not the home run that Democrats and the mainstream media claim. In their rush to champion topline job creation, they overlook how the jobs report is actually made up of two surveys. And the other doesn’t look so good, though it’s far more reflective of the economic reality facing ordinary Americans and small businesses.

The Bureau of Labor Statistics surveys business establishments and households each month to generate its report on labor market conditions. The establishment survey of payrolls produces the monthly job creation number the media is quick to champion. Yet even the BLS admits the household survey is “more expansive” because it also measures self-employed workers and those employed privately in households. This survey produces the unemployment rate.

For years, these surveys have tracked each other in terms of employment growth, as you’d expect. However, beginning in mid-2022, they began to diverge, with the payroll survey showing far more job creation than the household survey. Over the last year, the payroll survey finds 2.9 million jobs have been created, while the household survey reveals only 1.1 million new jobs.

In stark contrast to the 353,000 jobs created in the payroll survey, the household survey shows employment actually declined by 31,000 last month. Full-time jobs declined by 63,000. That’s a far cry from today’s headlines about a booming economy.

These household survey numbers are in line with other anecdotal and empirical data. On Thursday, the job placement firm Challenger, Gray and Christmas reported a historic 82,300 layoffs in January. This week, UPS announced 12,000 layoffs. Major companies such as Zerox, Spotify, and Hasbro have recently laid off at least 15% of their workforce. There’s also a jobs bloodbath currently occurring in the media sector.

On Wednesday, ADP reported that only 107,000 private-sector jobs were created in January.

There are other technical problems with the jobs report. Seasonal adjustments and annual revisions to population estimates have made January jobs reports notoriously untrustworthy. I can’t understand why we need opaque “seasonal adjustments” to the job numbers at all. Americans are smart enough to understand that job creation will be higher in some months and lower in others for seasonal reasons. We don’t need green eyeshades smoothing them for us.

Bipartisan tax cut legislation passed this week in the House of Representatives can turbocharge job creation in both surveys in the months ahead. The legislation, brokered by House Ways and Means Chairman Jason Smith (R-MO), extends key tax cuts passed as part of the Tax Cuts and Jobs Act in 2017, making it easier for small businesses to invest, expand, and hire.

This legislation is overwhelmingly supported by Main Street, with small businesses calling the immediate expensing provision “a game-changer.” The Senate should quickly pass this legislation and send it to President Biden’s desk to be signed into law.

In the meantime, let’s see if the payroll and household surveys continue to diverge in the jobs reports ahead. If they do, it will be more confirmation that the economy is not out of the woods yet.

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Originally published by the Daily Caller News Foundation.

Alfredo Ortiz is a contributor to The Daily Caller News Foundation, president and CEO of Job Creators Network, author of “The Real Race Revolutionaries,” and co-host of the Main Street Matters podcast.

The American Work Tradition Is Under Siege

The American Work Tradition Is Under Siege

By Dr. Thomas Patterson |

Suddenly America is facing a severe structural labor shortage. We all feel it, whether we’re trying for reservations at a restaurant that has reduced hours, seeking handyman help, or just trying to get somebody to answer the dang phone.

Nurses and teachers are in short supply. Employers report at least two job openings for each job seeker. Beyond personal inconvenience, when workers produce fewer services and goods for dollars to chase, prices go up and inflation results.

You can partly blame it on COVID. Politicians shut down much of the economy, then shoved trillions of dollars in “COVID relief funds” to those forced not to work.

Unfortunately, the spigot was never fully closed, and many Americans found that sleeping in agreed with them. Europe, Canada, and Japan all rebounded while the U.S. was left with about one million fewer workers.

Adding to the problem, the youth anti-work movement continues to grow. Work is for suckers and victims. Social media outlets praise workers for quitting their jobs. Others are lionized for being “quiet quitters,” idlers who do the least work possible while still collecting a paycheck.

The inspiration for the anti-work cult traces back to the Marxist anti-capitalist movement, a long-time foe of the American work tradition. Their thesis is that capitalist employment is exploitive and therefore, not working is virtuous.

It coincidentally turns out that, for many Americans, government policy has significantly disincentivized work. And for these people, working harder is no longer the way to get ahead.

Writing in the Wall Street Journal, Phil Gramm and John Early explain how this effect is commonly underestimated because of the way income is reported by the federal government. The Census Bureau, inexplicably, does not treat most transfer payments as income.

That’s important because government transfer payments to the bottom 20% of households, income-wise, ballooned by 269% between 1967 and 2017 while the middle 20% realized only a 154% increase in their after tax income.

The results were staggering. In 2017, the bottom 20% of households had $6,941 in “income” and only 36% of working age people actually worked. However, after the transfer payments and taxes are included, as they should be, their total income was $48,806.

The second to the bottom quintile had 85% employment and an average total income of $50,492, actually less than a $2,000 difference from the lowest group. The middle quintile was 92% employed and earned $66,453, but after taxes and transfers that shrank to $61,350, merely 26% more than the bottom quintile.

But wait, there’s more. Family units are smaller in the lowest quintile than the others. Per capita, the adjusted net income was actually $33,653 in the lowest quintile, $29,497 in the next lowest, and $32,754 in the middle.

Sorry for all the numbers, but they tell an important story. For 60% of Americans, working much harder and even earning more money produced a negligible net benefit. Means-tested government programs were just as lucrative. It’s not hard to understand why the percentage of working age people in the lowest quintile who were employed fell from 68% in 1967 to 36% in 2017.

Policymakers seem to believe that incentives don’t matter, but they do. People who choose not to work and live off the labor of others earn some understandable resentment, but they’re not acting irrationally under the circumstance. The heart of the problem is their enablers in Big Government who, for their own political purposes, created this perverse system.

It’s often forgotten that in the 1990s, governments established work requirements for many means-tested benefits. “Workfare” was a generational policy success. In spite of hysterical warnings that “children would starve in the streets,” poverty rates dropped as employment increased.

Unfortunately, the advocates for workfare declared victory and moved on. But welfare bureaucrats stayed put, patiently reestablishing their vision of welfare without requirements. So now poverty is supported rather than reduced. And Arizona was among the states that quietly removed the work requirements for Medicaid and other welfare programs.

But government handouts that replace labor don’t work. They erode self-reliance, worker pride, and self-sufficiency. They threaten our shared prosperity. And most of all, they undermine American values.

Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.

Arizona’s Unemployment Rate Drops To 6.2%

Arizona’s Unemployment Rate Drops To 6.2%

Less than a year and a half after the initial economic disruption of the COVID-19 pandemic, Arizona has already recovered more than 100 percent of private sector jobs, representing one of the fastest jobs recoveries in the nation.

The Arizona seasonally adjusted unemployment rate decreased to 6.2% in August 2021 from 6.6% in July 2021.  The U.S. seasonally adjusted unemployment rate decreased to 5.2% in August 2021 from 5.4% in July 2021.

Month over month, Arizona’s seasonally adjusted labor force increased by 6,169 individuals or 0.2%. Year over year, the labor force increased by 119,257 individuals or 3.4%. Month over month, Arizona total non-farm employment increased by 53,600 jobs or 1.8%. Year over year, total non-farm employment increased by 162,400 jobs or 5.8%.

“The last year and a half have challenged Arizonans like never before,” said Governor Doug Ducey. “But thanks to the ingenuity and perseverance of our hard-working employees and business community, Arizona’s recovery is in full swing, with a real momentum headed in the right direction. This isn’t the case for every state, and we will continue to work hard to make sure Arizonans have ample opportunity to reenter the workforce, access new skills, and get back to work.”

“The Best Social Program Is A Job” — It’s Time To Stop Incentivizing Unemployment

“The Best Social Program Is A Job” — It’s Time To Stop Incentivizing Unemployment

By the Free Enterprise Club |

If given the option between working full time or doing nothing but receiving the same or greater pay, which would you choose? Most people would choose the latter. And can you blame them? Why wake up early and work all day if the government will pay you to stay home and do nothing instead?

This is the current workforce environment in America, and it is having a detrimental impact on our economic recovery. The result? While the Biden administration was hoping to tout a million new jobs for the month of April, they ended with a paltry 266,000.

And we have seen this lag in job recovery all across the country. Restaurants have posted signs apologizing to customers for delays in service, noting that their employees refuse to come back to work. And some businesses have started offering cash simply for coming in for an interview.

Never let a crisis go to waste, right? Under the guise of a global pandemic, politicians shut down the economy, and then created a citizenry dependent on unemployment checks exceeding the wish list $15 minimum wage pushed by the likes of Bernie Sanders. How is a business, coming out of potentially months with no profit, supposed to compete with that?

It is completely unsustainable. States can’t afford it. The feds can’t afford it. And most importantly, small businesses can’t shoulder it any longer.

Fortunately, some states have moved in the right direction. South Carolina announced they will be ending the $300 federal unemployment supplemental payments. This comes after Montana announced the same, along with $1,200 stipends to Montanans who return to work.

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