Where is the recovery?

Delaware’s unemployment rate has been going up even as the national numbers have been falling the last few months. The latest U. S. jobs numbers are encouraging, but it is still noteworthy that we still have not recovered the income or jobs that we lost in spite of massive stimulus from both the fiscal and monetary side. The U-6 which measures the real employment situation of full time workers shows 11.8% unemployment rate. A large number of workers are working part time or temporarily when they want full time work. Women have been negatively impacted. The labor participation rate of white women is still dropping and is at its lowest point in years. The unemployment rate for black women has been at 11% until this last month when it dropped to 9.6%, but unemployment for black men went up over 11% leaving the black unemployment rate close to 11%. Nearly 19% of white youth are unemployed and 30% of black youth. Raising the minimum wage may be okay, but raising it to $10.10 is likely to close the door on many 16 to 19 struggling to get that first or second job and keep those who are not getting minimum wages from getting higher incomes as the money in the labor budget gets redistributed. The incentive to cut hours because of the Health Deform Act is already there. Adding further incentive is likely to keep the U-6 nearly double the official unemployment rate. Real wage levels won’t go up by a mandate, it goes up by demand for labor. I am not knocking a modest increase, but I am just pointing out that this $10.10 solution is desperation and will not improve the lives of most Americans. Successful increases of the minimum wage have been after economic growth. Otherwise it just cuts hours or jobs or is paid for elsewhere with inflation or stagnant wages. It becomes redistribution. A negative income tax or advanced earned income tax credit would make more sense to help low income families. Wages are stagnate. Income levels are still 4.7% below 2007 levels. We need some real solutions. It is apparent that the Democrats are out of answers. I think that we need reform on a wide scale. First is fundamental tax reform that encourages capital formation, investment in America, does not punish wages, and treats imports on a par with domestic goods while allowing tax free exports. I support the FAIR tax. At the very least, I support 9-9-9 with a healthy earned income tax credit. Second, we need to rebuild our infrastructure not only transportation but energy. We need the keystone pipeline, alternative energy, and other energy sources. America has become the largest energy producer in the world thanks to Bush. It is the bright spot in our economy. President Obama seems to be working to undermine even that. We need to look at upgrading our air traffic control, and storm alert systems. We also need to repair our highways and bridges. There is new train technology that we need study before we put another trillion in old transportation. Third we need to make human investments. We need to find a way to deal with college financing that doesn’t create huge debts and inflation and abandon one size fits all corporatized education for something more individualized and worthy of the 21st Century. Fourth, our founders helped create a scientific revolution that changed the world and gave us 200 years of unprecedented prosperity with the patent protection in the Constitution. We need to push the envelope for bringing technology into American production in the 21st Century. That will take its own post. Fifth, we need to keep some control on the deficit. If we did these, we would restore a growth path for decades. source Bureau of Labor Statistics

3 thoughts on “Where is the recovery?”

  1. Well, at least Omaba’s big bank cronies are making a killing. After all, he is bought-and-paid-for by Goldman Sachs.

    Another Omaba achievement, from The Washington Times;

    Federal welfare spending has grown by 32 percent over the past four years, fattened by President Obama’s stimulus spending and swelled by a growing number of Americans whose recession-depleted incomes now qualify them for public assistance, according to numbers released Thursday.

    Federal spending on more than 80 low-income assistance programs reached $746 billion in 2011, and state spending on those programs brought the total to $1.03 trillion, according to figures from the Congressional Research Service and the Senate Budget Committee.

    That makes welfare the single biggest chunk of federal spending — topping Social Security and basic defense spending.

    Yes, a rousing economic success story Mr. Omaba.

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