Ricochet is the best place on the internet to discuss the issues of the day, either through commenting on posts or writing your own for our active and dynamic community in a fully moderated environment. In addition, the Ricochet Audio Network offers over 50 original podcasts with new episodes released every day.
The front-page headline caught my attention: “Tide may be turning for working-class Americans.” Really? We just learned on Friday that a record 94 million Americans are not participating in the labor force. How can this be good news seven years after the Great Recession? Bloomberg columnist Al Hunt explains why we are in fact on the verge of Morning in America, Obama-style:
On the surface, this Labor Day holiday caps another dark year for U.S. unions and many working-class Americans.
Union membership in the private sector is 6.6 percent; it was 16.8 percent 30 years ago. Union members account for 35.7 percent of public sector workers, down slightly from a decade earlier.
Wages for middle- and working-class Americans continue to stagnate, and income inequality has worsened. Labor’s clout in Washington is a shadow of what it used to be: Both houses of Congress voted to give President Barack Obama greater authority to negotiate trade agreements, in defiance of labor opposition, and initiatives such as raising the national minimum wage are stalled.
Negotiating the jump to page A8, we finally find Hunt’s reasons for hope:
There are signs of change, however. Obama has issued several employee-friendly executive orders, including one that enables salaried workers to qualify for more overtime pay. And the president’s appointees on the National Labor Relations Board voted to give workers more bargaining power.
So Hunt’s evidence for imminent repair of the dismal job market of the past eight years is the president of the past six years and eight months issuing further orders and appointing additional bureaucrats.
The back half of the article recycles nostrums familiar to Hunt’s readers through the decades. More unionization, corporate wealth-spreading, and executive salary shaming will save the day. Even Pope Francis makes an appearance, which at least is new.
Why are we still waiting hopefully and expectantly for the job tide to turn nearly two full terms after the Left’s ideal transformative president assumed office?
A refresher in basic economics should help. For decades the United States has steadily increased the relative cost of conducting high value-added activities like manufacturing in the USA. This starts with the world’s highest corporate income tax rate, an enormous incentive to send profitable activities elsewhere. Then there is the the Environmental Protection Agency, falsely categorizing carbon dioxide as pollution and working tirelessly to engineer ever-higher energy prices. Mandated non-wage labor costs are also increasing. Exhibit One is Obamacare. HHS regulations are a major reason why the 30-hour workweek is the new standard for an entry-level job.
Fewer factories, higher taxes, and climbing employee costs—all reduce demand for labor. What about supply?
Immigration, legal and illegal, is at a record high in the United States, with new arrivals greatly outstripping job growth. The Center for Immigration studies reports: .
Government data collected in December 2014 show 18 million immigrants (legal and illegal) living in the United States who arrived in January 2000 or later. But only 9.3 million jobs were added over this time period. In addition, the native-born population 16 and older grew by 25.2 million. Because job growth has not come close to matching immigration and population growth, the share of Americans in the labor force has declined dramatically — a clear indication there is no labor shortage.
So here is an easy essay question this Labor Day: Are persistent joblessness and stagnating wages the result of supply and demand, or want of the right wording of an executive order from President Obama’s pen?