The American economy is slowly improving. It is not racing along, but it is improving. Investor’s Business Daily recently posted an editorial explaining that although we have a 4.1 percent unemployment rate, we are not yet at full employment. As the article explains, there are other numbers that need to be considered when looking at the economy.
The editorial reports:
But look at the numbers more closely and you see that we are far from full employment.
First, the 0.1 percentage point decline in the unemployment rate in October was almost entirely the result of the fact that 968,000 dropped out of the labor force that month.
That’s right, for every new job created, nearly four people left the labor force.
The broader measure of unemployed — which combines those actively searching for a job with those working part time but want to work full time or are “marginally attached” to the labor force — show the jobless rate to be 7.9%.
And the IBD-TIPP poll shows that there’s likely even more slack than that. The October survey — which asks those polled whether they or anyone in their household is looking for work — shows that the share of job seekers is currently above 10%. This number, by the way, has consistently tracked higher than either of the BLS’s two measures.
Here’s another way to look at it. Back in December 2000, the unemployment rate was 3.9%. But that month, the labor force participation rate — the share of the population that’s either working or looking for a job — was 67%.
The current rate: 62.7%.
If the labor force participation rate were the same today as it was in 2000, the official unemployment rate would be more like 10%.
The 10% unemployment rate would be better than what the actual rate has been in recent years, but obviously, it is not good.
The editorial concludes:
There is clearly still a need for pro-growth policies to get millions of workers sitting on the sidelines back to work.
Those pro-growth policies need to begin with the passage of President Trump’s tax proposal followed by a complete repeal of ObamaCare. If the Republicans in Congress want to be re-elected, they need to do both. It is time to put away the fear of a political outsider succeeding as President and begin to work together to move the country forward.
An article on
An article on the website of the JFK Library includes the following paragraph:
The president finally decided that only a bold domestic program, including tax cuts, would restore his political momentum. Declaring that the absence of recession is not tantamount to economic growth, the president proposed in 1963 to cut income taxes from a range of 20-91% to 14-65% He also proposed a cut in the corporate tax rate from 52% to 47%. Ironically, economic growth expanded in 1963, and Republicans and conservative Democrats in Congress insisted that reducing taxes without corresponding spending cuts was unacceptable. Kennedy disagreed, arguing that “a rising tide lifts all boats” and that strong economic growth would not continue without lower taxes.