July’s employment report, with a loss of 131,000 jobs and an unemployment rate of 9.5 percent, underscores the utter failure of the Obama administration’s policies. This is not a summer of recovery.
On Tuesday Secretary Geithner said that unemployment would rise as more people entered the labor force: “When they see a little hope that there may be jobs out there, they start to come back in again.” But in July 181,000 workers left the labor force because there is just no hope out there.
The labor force participation rate declined for the third month in a row to 64.5 percent, equal to rates a quarter century ago, in August 1985, and more than a million workers have withdrawn from the labor force since April.
The decline in those participating in the labor force is concentrated among African Americans, whose labor force participation rate shrank from 61.9 percent in June to 61.5 percent in July. In contrast, the labor force participation rates for whites remained even at 65.1 percent.
Congress and the administration need to press the reset button on economy policy by reducing burdensome regulations on employers, abandoning the tax hikes scheduled for next January, and cutting federal spending. Instead, next week Congress is going to vote to spend another $26 billion of taxpayer dollars to prop up the jobs of state and local government workers who are already compensated at twice the level of private sector workers.
Examiner columnist Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.
