I guess I wasn’t surprised earlier this week when the Congressional Budget Office came out with the report on the Affordable Care Act’s effect on jobs. The CBO said that by 2017, there would be close to 2 million fewer workers than there would have been if the law hadn’t been passed. By 2024, the number swells to 2.4 million. Back in 2011, the CBO figured the ACA would cost the country a mere 800,00 full-time workers. Seems things are getting a little more dicey as time wears on. Of course, this flies in the face of what we were told prior to the law’s enactment. That’s when then-Speaker of the House Nancy Pelosi told us the law would create 400,000 jobs “almost immediately” and 4 million jobs over the long term. Well, she was only off by a net 6.3 million jobs, but what the heck. What’s a few million jobs among political hacks anyway? The reason I wasn’t surprised is because very little of what we were told about the ACA has come to fruition. You know: If you like your healthcare plan you can keep it. (Not really.) If you like your doctor you can keep him. (Not really.) It’s going to lower the deficit. (CBO says it will add a trillion to the deficit over 10 years.) And probably the biggest whopper of all was the notion that “every American will have health insurance.” The CBO notes that because of computer problems, Obamacare will sign up 1 million fewer people than expected this year. The enrollment will fully catch up by 2020, leaving roughly 30 million Americans without insurance. That is a number roughly equivalent to 60 percent of the number of uninsured people in America before Obamacare was passed. Kind of begs the question, doesn’t it. What was the point? We had to upend a fifth of the U.S. economy for this? It would have been way cheaper for the government just to write everybody without insurance a check for 10 grand a year and be done with it. But I really don’t want to write about the Affordable Care Act, anyway. It was the jobs thing that got me going. I wanted to write about jobs because I find it excruciatingly annoying that politicians keep promising to “focus like a laser” on job creation buy nobody has done a darn thing about it. Unless, of course, you count the Federal Reserve dumping $85 billion a month into the economy as doing something about it. Friday, the monthly Labor Department report on jobs came out. Economists expected the economy to add 181,00 jobs in January, up from the disappointing 74,000 jobs added during December. The January number came in at 113,000, far short of expectations – again. (In December, economists predicted 193,000 jobs would be created.) Meanwhile, the unemployment rate dropped from 6.7 to 6.6 percent. But to me, these numbers are not really the most important numbers with regard to jobs and the economy. I think the really important number is the labor participation rate. The LPR rate is typically defined as the percentage of non-institutionalized people in the workforce between ages 16 and 64. Non-institutionalized means you’re not in school or prison or anyplace else that would preclude full-time work. Homemakers are not counted either. Right now, the LPR is pretty awful. It’s odd to me how the media always trumpet the unemployment rate the way they do. Doesn’t anybody think it’s weird that payrolls are dropping and at the same time the unemployment rate goes down? That’s because the number of people collecting unemployment benefits isn’t falling because people are going back to work. It’s falling because people are going off the unemployment roles still unemployed and are no longer looking for work. In the December jobs report, the LPR rate dropped from 63 percent to 62.8 percent – a 35-year low. Put another way, the number of people employed dropped from 155.3 million to 154.9 million. So while the economy was creating 73,000 jobs, 400,000 people left the workforce – a net loss. In decent economic times, the LPR hovers around 67 or 68 percent. In the January report, the LPR ticked back up to 63 percent in January. That means as the economy was creating a paltry 113,000 jobs, an additional 287,000 people entered the workforce – a net gain. But this is no cause for celebration. At least not yet. That’s because the LPR was 63.2 in September, 62.8 in October and 63.0 in November. So it’s not like we can take the December to January increase as a trend. It’s been bouncing between record low and second-record low for five months. All-in-all, when taken as a whole, the economy simply is not steaming along at a clip necessary to create jobs and prosperity. Think about this for a minute. Back in 2009, when unemployment was 10 percent, the labor participation rate was 65.7. Today, the unemployment rate is 6.6 percent and the labor participation rate is 63 percent. That means that even as the unemployment rate has fallen 3.4 percent, there are nearly 3 million FEWER people working in the U.S. This clearly shows the drop in the unemployment rate is almost entirely due to the fact that people are leaving the workforce. Bottom line in all this is that the American economy is experiencing the slowest, most jobless recovery in 70 years. Frankly, whatever it is that Barack Obama’s economic team is doing to fix things simply isn’t working. And aside from all the talk of a “laser focus” on the economy, the only real economic policy I see is the Fed’s money machine. At the risk of sounding conspiratorial, sometimes I think the powers that be don’t really want the economy to get better. I think they’re just fine with record numbers of people on various forms of government assistance. All the better to retain power.
Posted: Sunday, February 9, 2014
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You assume that Barack Obama’s economic team got what they wanted through Congress. Far from the truth. Your column also appears to overlook the fact that many people have been forced to keep working just to keep insurance.Not everyone wants to keep working until they die.
Apparently, if they don't, then they fall into that massive category called 'lazy.'