Jobs, Jobs, Jobs
In his acceptance speech last night, Mitt Romney painted a picture of “a future where everyone who wants a job can find one.” As The Heritage Foundation’s James Sherk explains, that America does not exist right now.
The post-recession economy has undergone the slowest recovery in 70 years. In addition to more than 8 percent unemployment, labor force participation has fallen sharply since the recession began in December 2007. Today, nearly 5 million fewer Americans are working or searching for work. The drop in unemployment since 2009 is almost entirely due to the fact that those not looking for work do not count as unemployed. Demographic factors explain one-fifth of the decreased labor force participation. The rest comes from increased school enrollment and more people collecting disability benefits. Six percent of U.S. adults are now on disability insurance. This is no time to make it more difficult for businesses to create jobs.
Alarmingly, Sherk found that those on disability insurance “will remain permanently outside the labor force.” The upshot, if there is one, is that “those enrolled in school will probably return to the labor force.” For that to happen, though, businesses need to start hiring again, and as Sherk explains, that is unlikely because “excessive taxes and increased regulation discourage risk-taking and investment.”
Perhaps there was something to Paul Ryan’s 20-somethings-in-their-childhood-bedrooms quip on Wednesday night. Sherk continues:
The recession has not affected everyone equally. Workers aged 16 to 24 experienced the largest drop in employment (-7.7 percentage points) and the largest increase in those outside the labor force (+4.4 percentage points).
As Heritage’s Patrick Tyrrell pointed out earlier this week, government does indeed make it more difficult for first-time job seekers:
Last week, the U.S. Department of Labor released its Employment and Unemployment Among Youth—Summer 2012 report. While many youths (ages 16-24) found a summer job this year, many did not even try. Fully 39.5 percent of the youth population neither worked nor looked for work this summer. This number has trended upward over time—it is almost double the rate (22.5 percent) from July 1989.
Of those who looked for work, many could not find it. The youth unemployment rate in July 2012 was 17.1 percent. By comparison, it was only 12.4 percent in July 2000 and 10.8 percent in July 2007. For men, blacks, and Hispanics, the youth unemployment rates in July 2012 were worse—at 17.9 percent, 28.6 percent, and 18.5 percent respectively.
The statistics are truly daunting, but we are not without hope. Heritage has put forth a comprehensive plan to save the American dream and fortunately, many of the ideas put forth over the past week will move the country in the right direction.