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The Real Economic Health of America

September 5, 2016

In recent headlines the Obama Administration boasted about the underlining strength of the American economy claiming an unemployment rate of less than 5%.   Yet, a recent article from Quartz says, “Employment statistics in particular have a habit of eclipsing the real story. “[I]t is not the number of jobs that matters most, but what kind of jobs are available, what they pay[.] The 5% unemployment rate is hiding the devastating story of underemployment, wage loss, and precariousness that defines life for millions of Americans.”

The dismal underlining economic statistics paint a different picture.  Employment participation hovers barely above 62%, the lowest since the failed administration of Democrat President Jimmy Carter.  Average household income has fallen over 10% during this century.  Healthcare costs increased by $4000/yr.  A strong measure of employment quality, food stamps, has seen a 40% increase since 2008.  That number peaked in 2012 at 47 million and has remained stubbornly around 45 million.

Between 2008 and 2009, the shadow employment rate (which includes workers who have been seeking work for longer than a year and have lost hope) shot-up to 23% and again, unlike other recoveries, is still at 23%. Under the current administration, the Gross Domestic Product (GDP) growth averaged less than 2% and only once inched above 4%.  Under the Reagan Administration the GDP growth remained around 5% for years and during several quarters was just short of 10%. 

Since 2008, those who consider themselves poor increased from 25% to 40%; the middle class shrunk from 53% to 44%.  What’s worse, 40% of Americans now earn less than $20,000.  Unemployment, or underemployment, among those with skills and education is still significantly higher than the average.   All of this less-than impressive growth added almost 10 trillion in debt, as we tried to spend ourselves into prosperity. 

A couple of interesting bits of information add depth.  The most recent low in food stamps usage, 17 Million, was in 2001, the same year in which China was admitted to the World Trade Organization.  The Daily News reported last week that in Galveston County 53,600 people are regularly missing meals.  The Rotary Club is delivering food to the needy.  In February 390 needy of 486 were from League City.  In March it was 420 out of 524.  Increases in illegal immigration also correlate to increases in the number of those who are needy. 

Government interference makes matters worse.  The Dodd-Frank bill decimated local banking systems.  ObamaCare has reduced employment and the number of hours per week worked.

We aren’t opposed to legal immigration or world trade, but it’s clear the intervention by the current Administration has only exacerbated a complicated situation.  Immigration, both legal and illegal; and trade agreements have had a highly negative impact upon America’s well-being, wealth, family, and freedom and are issues which must be addressed.  Some would argue, we need to significantly increase the minimum wage while failing to recognize that doing so will ultimately destroy competition; a key ingredient to a healthy economy.    

Mark, Bill and John



 


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