The Fiscal Times called the January jobs report, released by the Bureau of Labor Statistics, “strike two,” as it was the second month in a row with disappointing growth in the labor market. The report said the economy added only 113,000 jobs last month, while the average growth per month in 2013 was 194,000 jobs. Economists are pointing to the lower unemployment rate, now 6.6 percent, as a sign of improvement. The truth of the matter is the unemployment rate shows no improvement, and the economy has gotten worse since the 2008 financial crisis.
The Labor Force Participation Rate, which measures how many people 16 years and older are included in the labor force, is normally ignored. The unemployment rate, which is part of the Labor Force Participation Rate, only counts those who have searched for a job in the past four weeks. Other unemployed citizens, like students, retirees and homemakers, are not part of the labor force. They account for 41.2 percent of the entire population, as of January 2014. This number has increased from 37.1 percent in January 2008, indicating fewer people are participating in the labor force and paying taxes.
The government has no choice but to use the taxes taken from those who work to take care of those who are not employed or are not included in the labor force. Therefore, those who work must be taxed enough to pay for public sector services. This is a drain on resources.
But even those who do have a job are having a hard time getting by. A survey reported by Cable News Network in 2012 showed that 49 percent of Americans do not have enough money saved to cover three months of expenses. In general, all American families are becoming poorer because of an astounding decline of wealth. According to the Federal Reserve, there has been a 39 percent drop in the median net worth, decreasing from $126,400 in 2007 to $77,300 in 2010.
Small businesses are taking a hit as well. According to a 2012 survey by Citigroup, 23 percent of small business owners went more than a year without taking pay, and more than half had problems making payroll: 54 percent of owners went without at least one paycheck. If this trend continues, many businesses will close because they are not making money.
The belief that shoveling money into programs will fix these problems makes no sense. It only means that the income for more individuals will be cut. When politicians use the buzzword “forward,” they probably mean forward off the economic cliff.