COM­MENT & ANAL­Y­SIS

Stand­ing still on un­em­ploy­ment Lib­eral eco­nomic poli­cies are cre­at­ing a per­ma­nent un­der­class

The Washington Times Daily - - Opinion -

Bureau of La­bor Sta­tis­tics data re­leased Fri­day show the un­em­ploy­ment rate has re­fused to budge. De­spite 227,000 new jobs in Fe­bru­ary, the num­ber of un­em­ployed Amer­i­cans re­mained un­changed at 12.8 mil­lion, as did the high 8.3 per­cent un­em­ploy­ment rate. Some 5.4 mil­lion have been job­less for more than 27 weeks, and a mil­lion have sim­ply thrown in the towel and no longer look for work. These grim facts leave lit­tle room for op­ti­mism.

Vet­er­ans are the best off in this econ­omy with a 5.4 per­cent un­em­ploy­ment rate, which is sig­nif­i­cantly lower than the na­tional av­er­age. That should come as no sur­prise as our for­mer mil­i­tary per­son­nel are gen­er­ally ed­u­cated, skilled and know how to get the job done.

In gen­eral, young peo­ple don’t fare quite so well. Men aged 18-19 face an eye-pop­ping un­em­ploy­ment rate of al­most 24 per­cent; men aged 2024 do only slightly bet­ter with 15 per­cent un­em­ployed. The fig­ures for young women are also sober­ing. Al­most 18 per­cent in the 18-19 age range and 11.7 per­cent of 20-24 year-olds are out of work. By con­trast, the un­em­ploy­ment rate is only 5.9 per­cent for peo­ple over the age of 55.

Lack of ed­u­ca­tion also serves as a bar­rier to land­ing a po­si­tion. The la­bor-par­tic­i­pa­tion rate of those with less than a high-school diploma is barely over 40 per­cent, and al­most 13 per­cent of them are un­em­ployed. Some 54 per­cent of high­school grad­u­ates are in the la­bor force with an av­er­age 8.3 per­cent un­em­ploy­ment rate. On the other hand, with a par­tic­i­pa­tion rate of over 73 per­cent, the un­em­ploy­ment rate of those with a bach­e­lor’s de­gree or higher is only 4.2 per­cent.

Wel­fare-state poli­cies have cre­ated this dire sit­u­a­tion and es­tab­lished a per­ma­nent un­der­class. The longer peo­ple re­main un­em­ployed, the more their skills at­ro­phy, and the harder it is for them to find a pro­duc­tive place in so­ci­ety. More than 40 per­cent of the un­em­ployed have fallen into the long-term trap. Much of the blame can be laid on the con­tin­u­ous and coun­ter­pro­duc­tive ex­ten­sion of un­em­ploy­ment ben­e­fits. Ex­ten­sive re­search shows that when you pay peo­ple not to work, they have less of an in­cen­tive to go out and look for work.

The jobs that are go­ing un­filled are all too of­ten in man­u­fac­tur­ing and skilled trades, ar­eas that have been ig­nored for far too long. In­stead of push­ing ev­ery­one into col­lege from high school — only to rack up debt the size of a mort­gage — more em­pha­sis should be placed on de­vel­op­ing these trade skills.

Un­less Amer­ica changes course, things are only go­ing to get worse. La­bor pro­duc­tiv­ity, a key fac­tor in main­tain­ing U.S. com­pet­i­tive­ness, is be­gin­ning to slow. Pro­duc­tiv­ity grew 0.4 per­cent in 2011, but la­bor costs grew by 2 per­cent, cre­at­ing an un­sus­tain­able dis­par­ity. Pre­sum­ably more in­vest­ment is needed to jump-start pro­duc­tiv­ity, but firms are reluc­tant to pour money into op­er­a­tions with the threat of costly new fed­eral red tape on the hori­zon.

Sim­pli­fy­ing rules and re­duc­ing the reg­u­la­tory bur­den would free up the pri­vate sec­tor to cre­ate jobs. Two hun­dred thou­sand new po­si­tions a month are sim­ply not enough for a coun­try of over 300 mil­lion souls.

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