THE CITIZEN IN ME ASKS WHY II

 

Unemployment is a subject thrown around by politicians and the press almost as if the “rate of unemployment” was the score of a sporting event. If you are unemployed it is 100%, no one ever feels 6.7% unemployed. It seems everyone who steps up to a microphone or pens an editorial uses the latest government statistic to bolster his partisan argument. The citizen in me asks why they do this when any thoughtful examination of the process that generates the statistic shows that the number is meaningless. The actual unemployment rate is the number of unemployed people in the work force divided by the total number of people in the workforce. Why you could ask, do I then assert that the governments number is meaningless. The great big and intentional deception comes from the way politicians choose to define who is in the workforce. The current administration is touting the drop in unemployment to 6.7% during their tenure. The problem is that more people are out of work now than when they took over five years ago. If I wanted the unemployment rate to look good as possible for political reasons I would calculate the number of unemployed people as only those actually drawing unemployment compensation at the moment. This would be the smallest number I could defend using. The obvious benefit is that it lets me ignore anyone whose benefits have run out or given up looking for work so I don’t need to admit that they are unemployed. If I eliminate anyone who has a part time job even if they want full time work I can lower the number even more. I would naturally count a highly skilled worker who has been forced into a minimum wage job as employed and scoff at the very mention of the term “underemployed”. Students would be eliminated from consideration as unemployed but I would lump them into the total number of people in the workforce to help drive the “rate” down. Then I would add the military personnel into the workforce number because they are 100% employed and that would help drive the number down. I could shift great numbers of unemployed people onto Social Security disability and ignore them. See how easy it is, and by the way all of the shady tactics I just listed are part of the government’s calculation. There are 23 million unemployed people in this country today. The only way that the unemployment rate could be 6.7% is if there are 343 Million people in the workforce. More than the number of people in the entire country! The real unemployment rate is closer to 18% and that is why we don’t have an honest debate about unemployment and I maintain that the 6.7% number is meaningless.

40,000 new regulations went into effect on 1/1/2014 regulating the ability of people and businesses to participate in the free market. Many of the new regulations come to us from the EPA and are crafted to, among other things, put the fossil fuel industry out of business. The administration is pushing congress to add 13 million illegal aliens into the workforce competing for our jobs. The same administration is pushing to double the minimum wage. The country is in the middle of an unemployment crisis and every proposal coming out of the White House has been shown though history to hurt business and employment. The citizen in me asks why does the government do this?

The “affordable care act” includes substantial penalties for any business of 50 or more employees that does not provide approved health insurance for its employees. Legislating huge added costs on any business is harmful but doing so in a struggling economy is going to make some businesses fail. Businesses that can cut employment to fall below the line will tend to do so while other companies will tend not to hire for the same reason. These are job killing provisions. The government identifies companies that sell goods and services on the international market as beneficial for the trade deficit. Ironically these same companies are penalized more than those in the domestic market because foreign companies are not burdened by the added costs imposed by “Obamacare”. The effect of the new healthcare law from every aspect is harmful to employment except in its requirement for new IRS enforcement personnel.

It is hard to see how our elected officials can improve the employment problem when they clearly don’t understand what drives job creation. The engine of the U.S. economy is small business and its job creation. The first step we should take for a real economic recovery is the repeal of Obamacare followed immediately by elimination of the minimum wage. The free market determines the correct wage rate for every job though competition. The federal tax rate for corporate income should be zero just as it is in the countries whose businesses undercut American companies in the market place. All income is subject to personal tax as it is. Double taxing through corporate tax reduces the capital available for growth.

 The disincentive to employment of endlessly paying people not to work with government compensation checks must stop. The old adage that says if you want more of something, subsidize it. We are subsidizing unemployment and we are living with an ever increasing population of the unemployed.

Welfare benefits in 33 states now pay more than a full time job at minimum the wage. Thirteen states pay welfare benefits that exceed the newly proposed $15/ hour minimum wage. The benefits are claimed, by the government, to be means-tested but in effect are an open ended entitlement.

If the government could be convinced to get out of the way our capitalistic free market would grow the economy and solve the unemployment problem. Sadly, every good progressive and socialist believes in the free market as long as it is properly regulated. Therein lies the problem with socialists, they all want to control the market so that they can force the country into the social engineering flavor of the month. This year that flavor is low cost healthcare for all, that also just happens to be killing jobs and eliminating health care coverage for ten times as many people as it covers. The new law was sold to the press as necessary to provide coverage for 30 million uninsured Americans. The problem is that about 80% of those people were uninsured by choice and are not signing up for the new coverage. The 20% that wanted coverage and couldn’t afford it is 6 million people. If the government really wanted to provide health insurance for these people they could have bought it on the open market for about a billion dollars a month. This is less than the cost of the new IRS agents and the administrative staff required for the new law. Just think, they could have left the health insurance alone that 80% of Americans liked and solved the problem. The cost of the failed web site alone would have paid for the first month. Without even touching on the questionable constitutionality of the ACA it is easy to show that it is bad for jobs and the country. The citizen in me asks why we elect these progressive tyrants. They will not stop unless we fire them or they destroy the greatest country on earth.