Jobs Growth Improves, But It's Still Not Enough
(The story updates yesterday's preview of the non-farm payrolls report for June with the actual numbers.)
NEW YORK (TheStreet) -- Jobs creation has improved in 2014, but it remains far short of the 390,000 additional jobs needed each month to keep up with population growth and genuinely reduce unemployment.
The jobless rate for June, reported by the Labor Department earlier today, is down to 6.1% from the recession peak of 10%, but most of the reduction has been accomplished by adults quitting the labor market -- neither working nor looking for work.
If the same percentage of adults were in the labor force today as when Presidents Obama or Bush took office, the jobless rate would be 10.4% and 12.4%, respectively.
Three problems have limited jobs creation during the Bush and Obama years -- slow economic growth overall, a disinclination to control the border with Latin America or disappoint businesses' appetite for cheaper skilled labor from Asia, and the work disincentives imposed by social programs intended to redress income inequality and help the disadvantaged.
In this century, gross-domestic-product growth has averaged 1.7% per year, whereas during the Reagan-Clinton period, it was 3.4%. The reluctance of both Presidents Bush and Obama to confront Chinese protectionism and currency manipulation and open up offshore oil for development has created a huge trade deficit, which sends consumer demand and jobs abroad.