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July Jobs Growth Disappoints and Real Unemployment Hangs at 18%

NEW YORK (TheStreet) -- The Labor Department reported the U.S. economy added only 209,000 jobs in July. The unemployment rate rose to 6.2%, but that hardly tells how tough the labor market has become for ordinary folks.

The jobless rate may be down from its recession peak of 10%, but much of this results from adults, discouraged by the lack of decent job openings, who have quit altogether. They are neither employed nor looking for work. Factor these people, among others such as students, and the rate is closer to 18%.

Only about half of the drop in the adult participation rate may be attributed to the Baby Boom generation reaching retirement age. Lacking adequate resources to retire, a larger percentage of adults over 65 are working than before the recession.

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Many Americans who would like full-time jobs are stuck in part-time positions because businesses can hire desirable part-time workers to supplement a core of permanent, full-time employees, but at lower wages. Obamacare’s employer health insurance mandates will not apply to workers on the job less than 30 hours a week.

Since 2000, Congress has enhanced the earned income tax credit and expanded programs that provide direct benefits to low-income workers, including food stamps, Medicaid, Obamacare, and rent and mortgage assistance.

Virtually all phase out as family incomes rise, either by securing higher hourly pay or working more hours, and impose an effective marginal tax rate as high as 50%. Consequently, these programs discourage work and skills acquisition, and encourage single parents and one partner in two adult households not to work. Often these motivate single people to work only part time.

Undocumented immigrants face more difficulties accessing these programs, and lax immigration enforcement permits them to openly take jobs that government benefits discourage low-income Americans from accepting.

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Employers can, intentionally or unintentionally, abuse the H-1B visa program, which permit businesses to employ foreign workers when qualified Americans are unavailable. Americans may be overlooked because they demand higher wages or are not networked with immigrants that are already employed in technical and managerial positions.