Thanks to Washington, Job Growth Is Still Falling Short
Efforts to bring jobs back to the U.S. are often frustrated by government regulations that are more burdensome than necessary to accomplish their legitimate objectives and by skilled labor shortages.
Paradoxically, in an economy with 9.8 million people unemployed and actively looking for work, too many lack skills appropriate for the 21st-century economy, and seem to lack adequate incentives to acquire those skills.
The combination of free and subsidized health care, the earned income tax credit and other government programs whose benefits phase out as incomes rise imposes high effective marginal tax rates on lower-income working families. The government benefits along with the high marginal rates often encourage prime-working-age adults to forgo full-time employment or not work at all.
Many have simply made little effort or have lacked the opportunity to acquire skills in demand. Efforts to improve primary and secondary education and access to college have been focused too much on basic skills and granting degrees without much concern for the course of study selected.Those efforts have simply not adequately emphasized creating skill-ready graduates for a rapidly changing economy. Immigrants -- legal and illegal combined -- are all too eager to fill the void and have captured all 5.6 million jobs created since 2000. Meanwhile, the share of the working-age native-born population holding a job has fallen from 74% to 68%, and many have not made the effort to acquire the skills necessary to land a good-paying job in a quickly changing economy and labor market. Baby boomer retirements are not appreciably driving down the adult employment rate: The percentage of Americans between the ages 65 to 69 working has risen from 23% to 32% since 2000. It's prime-working-age Americans who are not showing up; for example, one in six adult males between ages 25 and 64 is not working. Twenty-six million Americans are working part time, in large part because of poor economic conditions and government disincentives to work full time. Adding in the adults working part time who want full-time work but can't find it, and adults not currently in the workforce but who say they would return were conditions better, and the unemployment rate rises from 6.3% to more than 12%. These forces combine to cap wages for workers making goods and services that primarily serve U.S. markets and compete with imports, while wages rise for workers with skills needed in industries selling products in global markets, such as in advanced manufacturing, international finance and technology services. Follow @PMorici1 This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.
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