No Labor day for the jobless

Every year, on the first Monday in September, we celebrate Labor Day. There isn’t a consensus as to when the first Labor Day was observed or even who first came up with the idea; the first incarnations were enacted by municipal and state governments. It became a national holiday in 1894, during the Grover Cleveland administration, “to placate unionists following the Pullman Strike” where thousands of U.S. marshals and U.S. Army troops were mobilized by the federal government to put an end to it, according to Wikipedia. Today, as it says on the Department of Labor’s website, we “pay tribute on Labor Day to … the American worker.”

However, without jobs, there is no American worker. No matter what you hear or read in the media, we are not in an economic recovery. While the stock market is levitating because of economic stimulus provided by the Federal Reserve Bank through quantitative easing, the real economy is struggling. Nowhere is this more apparent than in the job market.

There are many causes for concern. According to the Bureau of Labor statistics, wages have stagnated over the last couple years as have hours worked. But the real story has to do with part-time vs. full-time employment. The trend is showing a shift toward a part-time worker society. In June alone, 360,000 part-time jobs were created while the number of full-time jobs dropped by a whopping 240,000.

Obamacare, with its more than 15,000 pages of new regulations, and its requirement that employers with more than 50 workers provide healthcare benefits to those working 30 hours a week or more, has been cited as a potential catalyst for this. Another cause for concern is the workforce participation rate, which in June came in at 63.3 percent, a level not seen since 1979. There are more than 1.5 million fewer jobs in the economy today than there were in January 2009 and about the same number as there were in 2001 when the population was lower by more than 33 million. While the headline unemployment rate has come down, this is because there are fewer people in the work force.

According to Keith Hall, former head of the Bureau of Labor Statistics, if the work force was accurately gauged the unemployment rate would be 3 percentage points higher. Economist John Williams estimates the real unemployment rate is 23.3 percent.

Still another cause for concern is that of demographics. Labor force participation rates are highest among those aged 55 to 69 years of age, with that age group actually gaining jobs. Many workers in this age group are staying in the work force because they are not financially prepared for retirement. This is forcing younger workers out of the job market.

Here in West Virginia, the workforce participation is the lowest in the nation at 54.4 percent. A report by the left-leaning West Virginia Center on Budget and Policy and funded in part by labor unions, including SEIU, there was a reference made to our state’s “job deficit,” which it put at approximately 27,000 jobs, in order to get back to pre-recession levels. The report, entitled “The State of Working West Virginia 2012” included some interesting information. The 16- to 24-year-old demographic is only 15 percent of the state work force, but it comprises one third of those without jobs. While that group is dropping out of the work force, older workers, comprising 25 percent, are staying in, which is similar to what is happening nationally. Also worth noting, the public sector (government) is our state’s largest employer, and accounts for one out of every five jobs. The sector that placed third is education and health care services, which is heavily subsidized by government. The two sectors combined total 36.4 percent of all jobs in West Virginia, or more than one out of every three. This is a big reason for our state’s economy chronically under-performance.

Last week, the State Journal reported that Workforce West Virginia’s unemployment data from July 2012 to July 2013 showed little change in the number of employed, even though the unemployment rate dropped from 7.4 to 6.2 percent; 10,000 people mysteriously disappeared from the workforce.

This Labor Day as we fire up the barbecue and anticipate the coming of autumn, we might take time to reflect on our incredible shrinking work force. As jobs continue to disappear, we should consider the policymakers and legislators that have brought us to this point. Perhaps they need to leave the work force for a while.


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