07.31.2010 0

Unemployment Remains at 9.5 Percent With Another 131,000 Job Losses

  • On: 08/09/2010 09:43:00
  • In: Economy
  • By Adam Bitely

    The Obama administration is in more trouble with news that the unemployment situation in the United States has not improved. On Friday morning, the Department of Labor announced that the unemployment rate had remained unchanged in July at 9.5 percent. On top of that, another 131,000 jobs were lost.

    These jobs and unemployment numbers are not only troubling, they are devastating. The economy has been in a downward spiral since 2008 and is showing no signs of recovery. Just consider the following things.

    First, the unemployment rate according to the Department of Labor accounts for the number of people that are unemployed — not the number that have given up on looking for jobs. Currently the underemployment rate is at 16.5 percent but if you factor in the number of people that have walked away from the civilian labor force altogether the number would be much higher. Now those are not numbers you often hear reported in the news.

    Second, unemployment among America’s youth is skyrocketing. This is the group of Americans that are going to be depended on to pay in to Social Security in the coming years to help offset the major losses expected as the Baby Boomers retire. According to the Bureau of Labor Statistics, from February of 2009 to July of 2010, the unemployment rate amongst 16-19 year olds has risen from 21.8 percent to 26.1 percent. This is startling to say the least, as it indicates that job growth is not even keeping up with new entrants into the workforce.

    Third, there is now enough evidence to support charges that Obama’s “stimulus” spending has done nothing to help the economy recover. Even further, the $26.1 billion “stimulus” package being passed through Congress right now to provide a bailout to bankrupt states is just a further extension of the failed 2009 “stimulus.” This increased spending has not spurned private sector job creation, and even more “stimulus” spending can further harm the situation.

    Also in last week’s unemployment report was the announcement that the private sector only created 71,000 new jobs. While there was a total net loss of jobs in the month of July, this is an important number to watch. If we assume that all other factors hold steady, and that private sector job creation remains around 71,000 per month, in 9 years or so, we could arrive back to pre-recession employment levels. Besides the Great Depression, that would be the slowest recovery in modern US. history.

    The private sector is still nervous about where the economy is headed and continues on holding out on investing in job creation at the rates that Obama and his economic team predicted they would. Perhaps such lackluster performance in the economy based on predictions and policy prescriptions prescribed by his chief economic adviser, Christina Romer, can provide some insight into her recent resignation from the administration.

    Clearly the “stimulus” infusions into the economy have done nothing to turn America around. While some critics might suggest that the initial “stimulus” package in 2009 was not enough, the simple question then is what is the correct amount? The fact of the matter is that government spending cannot create jobs. If those critics were correct, we would have seen some job creation and the economy heading in the correct direction. But we have not seen anything that indicates that spending over $1 trillion dollars has done anything positive. Instead we have seen prosperity destroyed and America plunged deeper into debt.

    Adam Bitely is the Editor-in-Chief of NetRightDaily.com for Americans for Limited Government.


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