I wrote about April’s pitiful job report when it was released on Friday; but there’s more…
Not only did 342,000 frustrated Americans drop out of the labor force last month – because they couldn’t find work – 65.8% of them felt so desperate they pulled a Hail Mary. 225,000 workers applied for Social Security disability benefits in April. And, 40 % of those applicants were accepted:
Almost 90,000 workers enrolled in the program in April, pushing the total for new enrollees above 333,000 in the first four months of the year.
Add in spouses and dependents, and the number of beneficiaries added to the program so far this year climbs to 539,000.
As IBD reported recently, more than 5 million workers and their families have enrolled in the disability program since President Obama took office.
● The Preezy of the United Steezy’s own economic advisers were sounding the ‘disability warning bell’ last fall:
The Obama administration’s economic advisers warned in a report last fall that the mass exodus of workers who can’t find a job onto the disability rolls poses a long-term risk to the economy. Once enrolled, they almost never return to the active workforce. This can, the report said, result “in a loss to society of the economic contribution those workers could have made.”
Not only do those on our swelling disability rolls not contribute to the economy, working Americans end up paying for their retirement.
Keep in mind if the labor force had NOT declined, April unemployment would be at 8.3%, instead of 8.1% as reported. If our labor force participation rate was the same as it was in June 2009, unemployment would be at 11%. Factor in the underemployed – those working part-time who want full-time work and the number is around 17%.
● Yesterday, President Obama launched his campaign for four more years in the White House by exhorting Americans to not ask if they are better off than they were four years ago, but – if they reelect him – how they’re going to be tomorrow. Today, Romney for President took a good punch at Obama’s reelection rhetoric in a new video ad. Here is Silence:
● An article in Friday’s Wall Street Journal examines some of the reasons behind America’s rapidly shrinking labor force:
[T]he recent fall is so sharp and surprising that aging baby boomers can’t be the entire reason. Another explanation is surely the slow pace of job growth, which means fewer opportunities to entice what economists call the “marginal” worker back into the labor force. Older workers who’ve lost a longtime job may find themselves unemployable in a rapidly changing economy. They may retire earlier than they might have preferred.
Second earners in a household may also not find work at a high enough wage to justify the costs of commuting or child care. In a recovery that is really cooking, like the Reagan boom, these workers find that the opportunities reward more work. In today’s mediocre expansion, not so much.
That’s especially true when stagnant wage growth means less reward for the effort. Over the past 12 months, average weekly earnings are up 2.1% but inflation has climbed by 3%. Real pay is rising far too slowly, which makes work less attractive.
The Federal Reserve has maintained a super-easy monetary policy in the name of reducing the jobless rate and to reflate the housing market, but this has contributed to higher food and energy prices and thus reduced real income gains. This too is a disincentive to work and undermines one ostensible purpose of the Fed’s easing.
● What begins as a helping hand morphs into a hammock…
Another culprit may be the rapid expansion of government transfer payments during this recession. Medicaid, disability payments and food stamps have all risen sharply in recent years, starting under President Bush and accelerating under President Obama.
This is a particular disincentive to low-skilled workers to enter the job market because in some high-benefit states they need to earn $30,000 or more to compensate for the benefits they lose. This is an insidious high marginal tax rate that deters many from ever acquiring the basic skills and experience they need to move up the income ladder.
● An important reason why this nation needs PRESIDENT Romney:
Reversing this falling labor force trend is a major policy challenge, especially as more of the baby boomers retire.The U.S. will need more workers to finance more retirees. This will require faster growth and more job creation than we’ve seen in this disappointing recovery.
The tragedy of the Obama Administration is that it put the political pursuit of its social welfare agenda above policies to nurture a strong, durable economic expansion. Americans are paying for that mistake in less work and less reward for the work they get. The priority of the next Administration must be to reverse the decline.
(emphasis added to articles)
Obama believes he deserves four more years…
America deserves jobs.
America deserves a leader who will end the suffering.
America deserves Mitt Romney.