The Trump campaign is right that the 4.9 percent headline unemployment rate, touted by the Obama Administration, is misleading. Joblessness is substantially worse and not likely to get better if Hillary Clinton is elected.
In 2009, President Obama inherited a tough situation – the financial crisis and unemployment peaking at 10 percent in October. However, the recovery has been one of the weakest on record, and most unemployed Americans don’t qualify for many of the good paying jobs becoming available.
Poorly negotiated and enforced trade agreements and illegal immigration have been important.
For example, the U.S.-Korea Free Trade Agreement, negotiated and implemented during Hillary Clinton’s term as Secretary of State, has increased the annual trade deficit by about $16 billion and killed an estimated 135,000 jobs
Overall, poorly negotiated and poorly enforced trade agreements have pushed the annual U.S. trade gap in manufacturing to $800 billion. Though the overall trade deficit is whittled down by exports of services, many agricultural products and some other primary materials, it is still about $500 billion and costs American workers about 4 million jobs directly. Adding in the lost spending by those displaced workers, the damage grows to 6 million jobs.
In addition, the nearly 11 million illegal immigrants increase competition for jobs. Consequently, many Americans who still have a job generally earn much lower wages
President Obama has increased the earned income tax credit, broadened eligibility for Medicaid, expanded the use of food stamps, and presided over a social security disability system that breeds fraud and abuse.
For many households, the potential cost of sending a first or second worker into the labor market imposes a tax, in the form of lost government benefits, of between 50 and 80 percent of the new wages earned.
Juxtaposed with the terribly low wages many jobs pay these days, it’s simply easier to vote for Democrats and live a life of gentile poverty.
Since Obama began his welfare spending spree, many Americans have decided his income redistribution machine makes working a mugs game.
Adult participation in the labor force has slid significantly, and apologists for this sorry state of affairs are quick to point to baby-boomers at or nearing retirement age. However, Americans over 65 are seeking work in increasing numbers—they are healthier and pensions and interest on savings are inadequate to permit many to retire.
Also, nearly 7 million men between the ages of 25 and 54—too old for college and too young to retire—are not working or looking for work.
Were the adult participation rate the same today as when Obama took office, unemployment would still be at least 9 percent.
Many of the idle don’t have the skills to apply for the good paying positions that are becoming available. Most new positions are in technical areas like computer coding and health technology, which require either technical training most high schools don’t provide, or a college education in a specialized field, like engineering, management or health care.
Unfortunately, as tuition has skyrocketed, university presidents have been focusing on building lavish student centers, winning football teams and lavishly rewarding themselves and the growing armies of administrative personnel instead of building out expensive but practical majors that offer graduates good career prospects.
As a consequence, the labor force does not match potential employment opportunities, the economy grows slowly and Americans – but for the top 25 percent who navigate the maze, obtain a good education and job, and whose income is growing – get poorer.
Now Hillary Clinton wants to double down on these polices.
Don’t be fooled. Unemployment is high and for most, wages are low. Neither is getting much better nor will likely get much better if we stay on our present course.
Peter Morici is an economist and business professor at the University of Maryland, and a national columnist. He tweets @pmorici1
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