Friday, the Labor Department is expected to report the economy added about 215,000 jobs in September, about half of what is needed each month to bring unemployment down to pre-financial crisis levels.
The official unemployment rate is 6.1 percent, but that hardly provides a fair description of the jobs crisis. Not counted are prime working age adults who have quit looking for a job, part-time workers who want full-time positions, and young college graduates who have enrolled in graduate school because they can’t find decent employment.
The real jobless rate is likely closer to 20 percent, and the root cause is slow economic growth.
Since 2000, GDP has advanced 1.7 percent annually, about half the pace of the Reagan-Clinton years.
Five factors are slowing growth and making jobs scarce.
1. Poorly Enforced Trade Agreements
U.S. consumers and businesses are spending, but too many dollars go abroad to pay for Chinese consumer goods and Middle East oil.
China has systematically undervalued their currencies to put cheap goods into U.S. markets, destroying millions of good-paying American manufacturing jobs. Presidents Bush and Obama have refused to enforce WTO rules that prohibit currency manipulation to gain competitive advantage.
2. Misguided Energy Policies
Washington has chosen to outsource—not reduce—environmental risks associated with petroleum development by prohibiting or curtailing production off the Atlantic, Pacific and Gulf coasts and in Alaska.
Safely developing those resources, along with prudent conservation, would slash oil imports to zero and create millions of jobs.
3. Burdensome Government Regulations and Taxes
U.S. business regulations are more costly than necessary to protect consumers and accomplish environmental goals. Along with U.S. efforts to curtail CO2 emissions, while China, India and others refuse to do the same, those send American jobs to Asia.
The U.S. corporate tax is among the highest in the world. Along with arbitrary taxes on overseas profits, high rates motivate U.S. businesses to relocate abroad and discourage foreign investment in the United States.
4. Corruption and Monopolies