On Friday, CNS News posted an article about the jobs report that was recently released. The mainstream media is thrilled that non-farm payrolls added a whopping 528,000 in July, more than double the estimate of 250,000; and the unemployment rate edged down to 3.5 percent in July from 3.6 percent in June. Unfortunately, that does not really represent the whole picture.
The article notes:
But on the downside, the number of Americans not in the labor force — no job and not looking for one — climbed above the 100,000,000 mark again, settling at 100,051,000 in July. That’s a 239,000 increase from June; and it follows an increase of 510,000 from May to June, when the number rose to 99,812,000.
The “not in the labor force” category includes retired persons, students, those taking care of children or other family members, and others who are neither working nor seeking work.
People who don’t have a job and aren’t looking for one put downward pressure on the important labor force participation rate, which dropped a tenth of a point to 62.1 percent in July.
According to the Congressional Budget Office, a lower labor force participation rate is associated with lower gross domestic product (GDP) and lower tax revenues. It is also associated with larger federal outlays, because people who are not in the labor force are more likely to enroll in certain federal benefit programs.
The article concludes:
In contrast to the aging of the population, CBO said it expects two long-term trends to boost participation in the labor force:
The population is becoming more educated, and people with more education tend to participate in the labor force at higher rates than do people with less education. And increasing longevity is expected to lead people to continue working until increasingly older ages.
But CBO said it expects those two trends to be mostly offset by other trends that will put downward pressure on the labor force participation rate.
The unemployment rate is projected to gradually rise over the next few years. By 2028, it is projected to reach 4.5 percent, CBO said.
We saw what policies actually increase the workforce participation rate and gross domestic product (GDP) during the Trump administration. A return to those policies would increase government revenue, slow down inflation, and improve the overall economy. However, the Biden administration is so intent on undoing everything President Trump did, they don’t care if they destroy the American economy in the process.