The Long-Term Unemployment Crisis

Arnold Ahlert is a former NY Post op-ed columnist currently contributing to JewishWorldReview.com, HumanEvents.com and CanadaFreePress.com. He may be reached at atahlert@comcast.net.


EconomyLast Friday, yet another one of those “unexpected” developments that baffle economic “experts,” reared its ugly head. Job creation plummeted in December, with only 74,000 Americans gaining employment, matching the weakest gain since January 2011. The experts expected 193,000 jobs to be created, and while many of them were baffled by this number, Heidi Shierholz, an economist with the Economic Policy Institute, was refreshingly honest. “We’re going to have a long-term unemployment crisis for a long time,” she warned.

Unfortunately, lackluster job creation is only part of the picture. The quality of the jobs is another factor adding to the bleakness, in that 40,000 of the total created were temporary employment.  Combined with retail and wholesale trade, these sectors added 100,000 jobs to the economy, meaning other sectors, such as construction, lost jobs.

The fragile nature of temporary employment speaks for itself. Retail and wholesale trade employment isn’t much better, as those jobs tend to be low paying. And many of those retail jobs many be unsustainable as well, now the the busiest shopping days of the year are behind us.

What lies in front of us is daunting. Despite the dismal jobs total, the unemployment rate dropped from 7 percent to 6.7 percent. Yet the true nature of that seeming paradox is no longer lost on the public, as more and more Americans are becoming aware that such a statistic represents the reality that millions of Americans have either retired, or simply given up looking for a job. As a result, they are no longer counted as “unemployed.” If those “missing” Americans were part of the equation, the unemployment rate would be 10.2 percent.

The December numbers were especially brutal: a staggering 347,000 Americans dropped out of the labor force, raising the annual total to 535,000, and lowering the overall labor participation rate from 63 percent to 62.8 percent. That number represents a new 35-year low, hitting a level not seen since 1978.

It also represents almost 92 million Americans who are not working.

Senator Jeff Sessions (R-AL) put the numbers in the proper perspective. “In December, the economy added only 74,000 jobs – not nearly enough to keep up with population growth –and 347,000 left the workforce,” he explained. “That means for every one job added, nearly 5 people left the workforce entirely. There are now nearly 92 million Americans outside the workforce, resulting in the lowest participation rate in 36 years. The President’s immigration plan will only make things dramatically worse – and no amount of ‘promise zones’ will be a sufficient remedy for the millions of displaced workers.

The “Promise Zones” to which Sessions refers is the latest big-government “solution” to our economic malaise, courtesy of a president and a Democrat Party that apparently know no other kind, despite five years of failure. Last Thursday, President Obama promised to help five struggling communities–San Antonio, Los Angeles, Philadelphia, Southeastern Kentucky and the Choctaw Nation of Oklahoma–cut through the “red tape” of federal agencies in order to gain access to existing government resources. We will help them succeed,” Mr. Obama said. “Not with a handout, but as partners with them, every step of the way. And we’re going to make sure it works.”

Apparently the president and his supporters miss the real meaning behind the words “red tape.” They are a euphemism for the bureaucratic inertia and indifference that invariably attends bloated and inefficient government. In this particular case, that inertia and indifference seemingly extends to the president himself, whose original promise to “partner with 20 of the hardest-hit towns in America to get these communities back on their feet,” was made during his State of the Union address–last February.

Sen. Ted Cruz (R-TX) cut through the banality. “All of America needs to be a real ‘Promise Zone’–with reduced barriers to small businesses creating private-sector jobs–and we should start by repealing every word of Obamacare, building the Keystone pipeline, abolishing the IRS and rolling back abusive regulations,” he said. Cruz also mocked the president’s latest obsession with inequality. “It’s altogether fitting that President Obama is today talking about income inequality, because income inequality has increased dramatically as a direct result of his economic policies,” he said.

That income inequality is best represented by a Wall Street stock market hitting record highs, even as Main Street median incomes have declined 4.4 percent since the so-called recovery began in 2009. A great deal of that disparity was engendered by the Federal Reserve’s unconscionable determination to continue pursuing Quantitative Easing (QE) and its Zero Interest Rate Policy (ZIRP), a “two-fer” Keynesian economic effort aimed at “jumpstarting” the economy. What it really did was bail out Wall Street banks and rich investors at the expense of ordinary Americans, who can’t even sniff a decent return on their hard-earned savings.

And now the latest jobs report has put the Fed in a bind. Last June, outgoing Fed chairman Ben Bernanke promised that QE would end if unemployment fell to 7 percent by mid-2014, and that a 6.5 percent unemployment rate was “milestone” number at which ZIRP will be jettisoned, and interest rates will be allowed to rise. Last month the Fed reduced its bond-buying spree from $85 billion per month to $75 billion, based on an “improving” economy. Incoming chairwoman Janet Yellen was expected to continue a reduction in bond buying. Yet as the New York Post’s John Crudele explains, last Friday’s jobs report “blew up in the Fed’s face.” He further notes that if February’s jobs report is equally dismal, the Fed’s bond buying will once again increase. Thus, we will continue debasing our currency in the hopes that something remarkably akin to a Soviet-like Five Year Plan will eventually work–give or take 92 million Americans.

Unsurprisingly, the excuse-makers were out in force. The government cited “unusually cold weather in parts of the country,” a theme echoed by many economists, despite the reality that the so-called “polar vortex” hit in January. Federal government job cuts of 98,000 workers–over the last three years–were also blamed for there slowdown. Others suggested it was nothing more than an anomaly. I wouldn’t pay any attention at all to these numbers,” said Moody’s Analytics chief economist Mark Zandi. “They’re not consistent with anything. We’re going to get the benchmark revisions, and they’re going to be all revised up and revised away.”

Zandi also blamed the declining workforce participation rate “in large part” on baby boomer generation retirements. The Department of Labor apparently disagrees. “Declining labor force participation rates of young people are pushing down the overall participation rate,” it contends.

Even worse than the excuses were the “solutions.” Aside from the aforementioned Promise Zones, Democrats contend that extending unemployment benefits creates jobs. Thus the press is on to extend them at least another three months, for the 1.3 million Americans who lost them on December 31. Democrats insist on doing so despite ample evidence that extending jobless benefits hurts jobs creation. The just-expired law had provided Americans with 47 weeks of federal benefits in addition to state benefits that run as long as 26 weeks. Apparently any hesitation to extend benefits beyond a total of 73 weeks indicates a lack of compassion. However, according to the Federal Reserve Bank of San Francisco and the National Bureau of Economic Research, it indicates that people tend to get aboard a “gravy train.”

More to the point, it is indicative of Democrats trying to have it both ways: either the economy is getting better or it isn’t.

Another indicator that it isn’t, and one of the more pernicious efforts at advancing a solution comes courtesy of the Business Roundtable and Labor Secretary Thomas Perez. The Roundtable cites a lack of workforce preparedness, resulting in a “skills gap” as one of the chief impediments to job creation. Thus they have joined Perez in promoting comprehensive immigration reform as the answer to America’s job woes.

Americans’ job woes? The Congressional Budget Office (CBO) and Joint Committee on Taxation have already concluded that immigration reform would depress wages and make it more difficult for Americans to find jobs. Jeff Sessions had some choice words for the advocates of reform. “America is not an oligarchy,” he declared. “House Republicans need to tell the President firmly: we work for the American people. We reject any immigration plan that puts special interests before working Americans. We are going to defend the working people of this country. A small group of CEOs does not get to set immigration policy for our country. We will not enrich the political class at the expense of the middle class.”

Last Friday’s jobs report, coupled with Republicans’ apparent desire to continue pursuing immigration reform suggests otherwise. “There are days I’m numb,” said Jamie May, a former senior manager for a corporate housing company. May once commanded a six-figure salary, but is now willing to take a job in the $30K-$40K range, following three layoffs. “The mental toll — the depression — the feeling of being unworthy and unwanted, after being highly successful. I just want a job,” she added.

So do millions of other Americans, all of whom are being held hostage to Promise Zones, Federal Reserve machinations, unemployment benefit extensions and comprehensive immigration reform. One wonders when their patience will run out.

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  • American1969

    With 20% unemployment, and another 20% or so under-employed, how is bringing in cheap, foreign labor good for anyone except the Political Class and their cronies?
    It’s laughable to listen to the garbage that comes from DC. “Promise Zones”? Really? That’s all you’ve been doing for five and a half years—–promising and doing absolutely nothing, which is what you scum from DC are good at!
    Instead of cheap gimmicks and smoke and mirrors, how about ACTUALLY DOING SOMETHING?
    Like loosening the regulations that are strangling small businesses, or the taxes? How about eliminating Obama Care, which is the main cause of employers having to cut their personnel back to part-time?
    Anyone with even half a brain cell can see that the economy is not getting better. If the economy is improving so much, why do we need to extend unemployment benefits?

    • veeper

      obama’s “promise zones” is another name for re-distribution of wealth…

      obama picking and choosing which Americans will get aid while others remain in dire need….

    • fiddler

      It’s never about solving anything.. it’s about staying in office. It’s about campaigning and votes. Always has been. TERM LIMITS! Start setting performance standards the PEOPLE set. If they are not met they should not be eligible to run again. No more popularity contests. This is very serious. No more pageantry; no more parties; no more back-slapping. Perform or be replaced!

      • American1969

        Here, here!

  • Bamaguje

    So long as Obama remains in power, America’s economy is unlikely to improve.

    • The_Questman

      You mean… As long as Democrats & Obama remain in power, America’s economy, Detroit’s economy, California’s economy, Illinois’ economy, etc is unlikely to improve… Now that New York City has voted a Communist in power it too will begin a slide to insolvency.

      • 2mrixl1

        When Republicans were in power they also let jobs go overseas and surplus foreign labor lower our wages and standard of living. Direct your anger at both parties.

        • Ellman48

          Unfortunate but true. Obama and the Democrats are not the only inimical forces at work. The Republican Party is also complicit except for a handful of conservatives whose number is too small to have a significant impact. Too many Republicans don’t realize how compliant and similar Republican policies are to those of the Democrats. As a result they don’t appreciate that their party will not usher in the remedies needed to drastically change the country’s direction. That’s obvious from the party’s choice of presidential candidates in 2008 and 2012, among many other mistakes, of which making John Boehner the Speaker being the most disastrous.

        • fiddler

          Answer: …. wait for it……..
          TERM LIMITS!!!

    • Ellman48

      “Unlikely to improve”? How about “certain to deteriorate”? How could that not be the case when their remedy for our economy involves taxing the rich, achieving income equality by redistributing wealth, extending unemployment and adding to the welfare roles and similar socialist panaceas?

    • davefel

      Republicans have done nothing either and when they held power in the oval office the country fell off the economic cliff. In defense of Dems I still have a home because of actions they took and Republicans tried to stop but both parties are useless in my opinion in creating middle class jobs.

  • veeper

    Millions of people in america will never live long enough to overcome obama’s time in office….

    Families will need several generations to regain the position they once had.

    obama’s fixation on his legacy, his agenda, his obamacare, his re-distribution of wealth, his race war, his mocking of America….

    has stolen years from millions of Americans, pushed entire families into poverty and created a miserable end of life for millions more older Americans….

    obama has been bad for America…..horrendous for the America economy and way of life….

    and….a destroyer of life for millions of Americans…..

    • sashamanda

      And yet it isn’t only Obama. The chilling reality is that most of Washington could care less what happens to the country and its people as long as Wall Street and big business are happy and handing out campaign funds.

      • fiddler

        wait for it……. TERM LIMITS. And while they are at it, set performance standards for the president. If s/he doesn’t make things better or welshes on a promise their should be a recall built into the contract. It is time to re-invent the “protections” and privileges they rascals have become all to familiar with. Lawyers dominate politics and for good reason: they know how to manipulate the law and voters. OUT OUT OUT!

        • fiddler

          Excuse the spelling errors: “their” should be “there”; “they” should be “these”.

        • sashamanda

          I generally agree with you, but what is wrong with drawing and quartering?

    • 11bravo

      When the checks stop the riots will begin. Since the welfare recipients are concentrated in the blue cities while the guns are concentrated in the red rural areas, this will be a self-correcting problem.
      Stole that from a poster on another site.

      • veeper

        hundreds of thousands of older people are seeing their golden years turn black….er…ummm…bleak…..

      • Markdpez

        My repeated warning of this and similar truths often results in being accused of racism. Accusations of racism is the last refuse of scoundrels.

  • sashamanda

    God bless Jeff Sessions!

  • It’sAllAboutLiberty!

    WELCOME TO BARACK OBAMA KEYNESIAN, ALINSKY RADICAL CHAOS, WEATHER UNDERGROUND REVOLUTIONARY TERRORISM, CHICAGO 7 AMERIKA ANARCHY #OCCUPY WHITE HOUSE “LEFT-PROTOFASCIST” EURO-SOCIALISM.
    Senator Jeff Sessions (R-AL) put the numbers in the proper perspective. “In December, the economy added only 74,000 jobs – not nearly enough to keep up with population growth –and 347,000 left the workforce,” he explained. “That means for every one job added, nearly 5 people left the workforce entirely. There are now nearly 92 million Americans outside the workforce, resulting in the lowest participation rate in 36 years.

  • 11bravo

    The December GDP, or jobs report was touted as the best since 2011 – a real good indicator the economy is picking up. Riiight, just like it did in 2011.
    I am one of the long term. My small town outside of Chicago has the same store fronts vacant – for 3 years now! We’re dying out here! I get some under the table home renovation work, I have been out on a couple of contract jobs for a month or two, but nothing looks promising – let alone the future.
    In 1978 I graduated HS, got a job in a factory and was mostly unaware politically so I did not feel the pain many did. I think this time is way worse than what Jimmy did back then.
    I think the democrats are really in for it in the next two elections. People are getting very angry with the misery. We all know (or are related to) people who have lost jobs, homes, life savings, and are hoping the retirement money does not run out before the economy recovers. It is also horrible to know our fellow citizens (Americans! for krists sake) are just giving up.
    And some on these boards are worried about electing RINOS. Just kick these socialists out with ANY republican!

    • veeper

      Even some blacks are beginning to come to the realization that they have been used, played and abused again….

      A few are even beginning to go against the black community code and publicly admit it……

  • Joe Esposito

    The obama plan, destroying the American dream is becoming a reality.

  • 2mrixl1

    Go back to tariffs!!! They protected our country’s economy for almost 200 years. End massive importation of surplus labor. Stop worshiping the traitor’s in the 3 piece suits. Businessmen salute the bottom line–not the flag.
    Absolutely nothing good will happen while we continue to send our tax base overseas and drive down the wages of tax payers turning them into tax takers. Don’t be distracted. Blame both parties and all the leaders of both parties. Demand a return of tariffs and borders, and don’t take no for an answer.

  • Ellman48

    “The December numbers were especially brutal: a staggering 347,000 Americans dropped out
    of the labor force, raising the annual total to 535,000, and lowering
    the overall labor participation rate from 63 percent to 62.8 percent.
    That number represents a new 35-year low, hitting a level not seen since
    1978.”

    Barack Obama is Jimmy Carter II. I remember dismal 1978 when the country steeped into the ‘malaise’ Jimmy Carter pronounced with disdain, a malaise of his own making. We didn’t need the media to tell us how bad things were then. Today the media is telling us how good we have it despite the dismal reality more of us face today than in 1978. When the economic news is hopeful Obama takes the credit. When it’s not he blames the Republican Congress. “Heads I win, tails you lose.” No wonder we remain stranded in the ditch after 5 years.

  • Ellman48

    “Not with a handout, but as partners with them, every step of the way. And we’re going to make sure it works.”

    5 years of this BS is enough! How can even one American believe promises from a man whose broken every one he’s ever made? Maybe Michelle will finally reveal the truth about him. Let’s hope so because it will take something that dramatic to wake up half the people in this country!

    • veeper

      watch how fast michelle becomes a “Ho” to the black community if she even tried to turn on barry while he’s in office….

  • Ellman48

    “So do millions of other Americans, all of whom are being held hostage to
    Promise Zones, Federal Reserve machinations, unemployment benefit
    extensions and comprehensive immigration reform. One wonders when their
    patience will run out.”

    Promise Zones = Hope & Change = Misery, Disappointment & Frustration

    When will some people start to notice the elephant and the gorilla in the room where Obama is being charming and eloquent?

  • alericKong

    Why those locations:

    San Antonio: Turn Texas Blue
    Los Angeles: Keep CA afloat until after election
    Philadelphia: Keep PA Blue
    Southeastern Kentucky: F-U libertarians
    Choctaw Nation of Oklahoma: Placate hippies