Latest Unemployment Numbers
I saw on the local news last night that the unemployment rate dropped from 9.9% to 9.7% as the labor market added 433,000 new jobs last month. That is great news and the largest monthly increase in a decade, the announcer said. But, the stock market saw through these numbers because 411,000 of these jobs were temporary census workers added to the federal payroll. By any analysis, that is an addition of 22,000 jobs. Wow!
Take out those census workers and the unemployment rate is basically 9.9%- no change. And considering that May is the hiring season for temporary seasonal workers throughout the country, the mere addition of 22,000 workers is miniscule. Hence, it would appear that unless Obama intends to put people on the federal payroll, his job-creation policies are doing precious little in the private sector to actually create jobs.
And why would an employer have any incentive to hire new workers. While indicators of overall economic growth have risen as determined by GDP and worker productivity figures have risen, one thing is painfully aware. The private sector has learned to produce more with less workers. That is not good news for hiring forecasts. Additionally, there is tremendous angst and uncertainty out there among employers as to how Obama’s tax policies will affect them. They are uncertain and worried how Obamacare will affect their bottom line. Would you hire more workers if the government was going to dictate that you provide health benefits based on what the government says you will or should provide? Would you hire more workers if there was a concern over increased payroll tax liability?
If he wants to spur hiring, he needs to be clear. Stop nuancing proposed tax increases and qualifying that they will effect only a certain segment of the population- namely, those households with greater than $250,000 in income. No one believes him, nor the Democratic Party. And why should they? If you’ve been burned too many times, you eventually learn to avoid the fire.
Conversely, Republicans need to develop a job creation plan that is consistent and does not necessarily rely on a tax-decrease only stance. Some targeted government hiring and job creation will be needed. But, their policies have to include some reliable consistency standards to allow the private sector the environment that lead to creating jobs. That includes a fair and consistent tax structure and regulatory structure.