NEW YORK (TheStreet) -- The economy added 214, 000 jobs in October. The pace has picked up over the last year, but it is still far short of the 400,000 per month needed to bring unemployment down to acceptable levels.
The official jobless rate is 5.8%, down from its recession peak of 10%, but that has been mostly accomplished by encouraging prime working-age adults to stay out of the labor market and neither work nor look for work. If the same percentage of adults were in the labor force today as when Presidents Obama or George W. Bush took office, the jobless rate would be about 9.8% or 11.9%, respectively.
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The Obama Administration says that Baby Boomer retirements are driving down adult participation in the labor market, but the reality is that one in six men between 25 and 64 are jobless. Those are men who are too old for college and too young to retire. Many are simply sitting at home watching ESPN and often relying on friends and relatives for support.
Three problems have limited job creation during the Bush and Obama years: a slowdown in economic growth; the absence of effective border controls; and the work disincentives imposed by expanded social programs intended to redress income inequality.
In this century, GDP growth has averaged 1.8% per year, whereas during the Reagan and Clinton presidencies it was 3.4%. The reluctance of both Bush and Obama to confront Chinese protectionism and open up offshore oil for development have created a huge trade deficit, which sends consumer demand and about 5 million jobs abroad.
Efforts to sustain jobs in the U.S. are frustrated by federal and state minimum wage laws and labor market regulations that limit employer flexibility, encourage the substitution of machines for workers and the employment created by public infrastructure spending.
Often government regulation of business is more burdensome than necessary to accomplish its legitimate objectives. For example, Dodd-Frank has encouraged the consolidation of banks, and that has resulted in more compliance officers in banks and fewer loans to medium-sized and small businesses.