Anti-Capitalist Administration Makes for Tough Economic Sledding
The Great Recession was hard enough. Obama made it harder.
The true scope of the damage that the Great Recession inflicted on the American economy, along with the Obama administration’s poor management of the crisis and its regular bent against the free market, is put in stark relief by some recent economic reports.
One study by Kansas City Federal Reserve economist Andrew Foerster calculates that continued economic uncertainty has cost the U.S. one million jobs since 2010, the year after the recession was officially declared “over.” Foerster maintains that high uncertainty in the economic recovery was generated by three separate incidents – the May 2010 European sovereign debt crisis, the 2011 U.S. debt ceiling debacle, and mixed signals over the Federal Reserve Bank’s June 2013 plan to wind down its bond buying program. The result was muted employment in the U.S. job market, about 16,000 fewer jobs per month between 2010 and 2013.
The current job market is also experiencing a sharp decline in male participation. Men have been leaving the workforce steadily since the late 1940s, but the trend has risen sharply in recent years. After World War II, 87% of adult men held jobs or were actively seeking employment. As of last month, that number dropped to just over 69%. The male participation rate has dropped three points since 2009 alone. In the cohort of men ages 25-54, there are 1.85 million “missing workers,” able-bodied males who have given up looking for jobs due to weak opportunities.
There are a number of factors at play behind this sharp decline of male workers. Manufacturing, a male-dominated profession, once accounted for one-quarter of the U.S. Gross Domestic Product but has fallen to around 11%. Education, social services and other service jobs traditionally held by women, have been on the rise, now claiming a large share of GDP. Women have entered the work force in greater numbers since the 1960s, and the female participation rate is at 57%. Women are also earning more college degrees these days, making them better suited overall for a more skilled workforce. There are some men who have made a lifestyle choice to stay at home and let their spouses be the breadwinner, but that’s a small portion of the total. The drop in labor is due largely to lack of opportunities.
Are there any signs of relief in the job market? That depends on who you listen to. Labor Secretary Thomas Perez insists that talk of the recovery consisting only of low-wage jobs is “categorically inaccurate,” adding, “This recovery is creating a lot of good jobs.” According to The Washington Post, nearly 40% of the jobs created in the last six months have been in high-wage industries such as construction and professional services. However, a recent U.S. Conference of Mayors and HIS Global Insights report reveals there is still a 23% wage gap in sectors hardest hit by the recession such as construction and manufacturing. Low-wage industries have seen the bulk (41%) of job growth in the last year. Mid-wage and high-wage industries have seen 26% and 33% growth, respectively, but there are still 1.2 million fewer jobs in those industries than prior to the recession.
Five years after the end of the recession, the Obama “recovery” can still be categorized as anemic, and without a doubt that’s due to the Obama administration’s policies. The high tax burden on investors and businesses has reduced capital investment and the incentive to put money into growing companies and hiring more workers. ObamaCare has also kept a number of small and mid-size businesses from growing at all, but especially beyond 49 employees, as they seek to remain below the law’s costly regulatory threshold for mandatory insurance coverage.
There is also a marked anti-capitalist flavor to the rhetoric continually coming out of the administration and its choir on Capitol Hill. We have listened to six years of incessant calls for making the rich “pay their fair share,” sparking class warfare and inspiring jealousy and disdain of success. The president told entrepreneurs they don’t deserve the fruits of their labor because they “didn’t build that,” in reference to the infrastructure that made their success possible. It’s no wonder so much intellectual and monetary capital is sitting on the sidelines or drifting overseas through corporate inversions, which Obama slams as a lack of “economic patriotism.” Eight years is a long economic malaise, so we must work to make sure 2017 brings a free-market oriented administration willing to allow the American economy to reach its full potential.