Job­less sum­mer con­tin­ues

The Washington Times Weekly - - Editorials -

Pres­i­dent Obama and his ad­vis­ers must think un­em­ploy­ment or the econ­omy won’t mat­ter to the av­er­age voter next year. About 1 in 6 Amer­i­cans ei­ther find them­selves in the un­em­ploy­ment line or are stuck flip­ping burg­ers to get by.

Wages de­clined last month as un­em­ploy­ment and in­fla­tion ticked up.

The econ­omy isn’t grow­ing, the job mar­ket is wors­en­ing, and Mr. Obama is threat­en­ing more of the same eco­nomic poli­cies.

Al­though the of­fi­cial un­em­ploy­ment num­ber is scary enough at 9.2 per­cent, it doesn’t take into ac­count peo­ple who’ve just lost hope of ever find­ing work and have fallen out of the La­bor Depart­ment sta­tis­tics. Just 64.1 per­cent of the pop­u­la­tion is at work — the low­est par­tic­i­pa­tion rate since 1984. Had this fig­ure stayed at the same level where it had been two years ago, 65.7 per­cent, the of­fi­cial un­em­ploy­ment fig­ure would ac­tu­ally be 11 per­cent.

Add in the num­ber of those stuck in part-time gigs, and the broad­est mea­sure of the sit­u­a­tion rises to a whop­ping 16.2 per­cent un­der­em­ployed.

The bad news for Amer­i­can fam­i­lies doesn’t end there.

The av­er­age weekly work hours de­clined last month, as did the av­er­age hourly wage.

Over the past 12 months, hourly earn­ings in­creased a bare 1.9 per­cent in nom­i­nal terms.

Those gains are wiped out by nearly twice as great an in­crease in the U.S. Con­sumer Price In­dex over the past 12 months of 3.6 per­cent.

The bot­tom line is that real in­comes are drop­ping. Things aren’t likely to get bet­ter. The lat­est U.S. Cham­ber of Com­merce sur­vey shows that al­most two-thirds of small busi­nesses do not plan to hire any work­ers in the com­ing year.

Those who want to hire some help cited eco­nomic un­cer­tainty and ex­pected lack of de­mand as the top two rea­sons that they can’t.

Small busi­nesses pro­vide al­most half of all pri­vate-sec­tor jobs, so it’s a bad omen when en­trepreneurs choose to sit on the side­lines and wait out the in­def­i­nite reg­u­la­tory fu­ture.

There can be no sus­tained re­cov­ery, no sus­tained job cre­ation un­less small busi­nesses are con­vinced it’s safe to in­vest and hire once again.

Oddly enough, some Euro­pean na­tions have been deal­ing with the global eco­nomic tur­moil in a far more ra­tio­nal man­ner.

Ger­many weath­ered a much deeper re­ces­sion — a 6.6 per­cent dip in gross do­mes­tic prod­uct — with al­most no loss in em­ploy­ment.

The coun­try had been work­ing on cut­ting back its gen­er­ous un­em­ploy­ment in­surance pro­grams and in­creas­ing the flex­i­bil­ity of its la­bor mar­kets be­fore the re­ces­sion hit, but it didn’t flinch.

The re­forms stayed in place, and the coun­try re­cov­ered more quickly, with­out mas­sively in­flat­ing its debt bur­den.

Ger­many didn’t have a hous­ing bub­ble, and its gov­ern­ment-di­rected ef­fort to “stim­u­late” the econ­omy was lim­ited to rel­a­tively mod­est fed­eral gov­ern­ment in­fra­struc­ture spend­ing.

Most im­por­tant, the Ger­man gov­ern­ment did not have its busi­nesses big and small guess­ing what ma­jor new pro­hi­bi­tions, rules and reg­u­la­tions would be im­posed next.

Mr. Obama loves to im­i­tate Euro­peans; per­haps he should look at some of these re­forms in­stead of crib­bing from his muse Jimmy Carter.

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