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Policy: Economy

Obama's slow-motion recovery creates a retrograde economy: Examiner Editorial

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Opinion,Editorial,Barack Obama,Jobs,Economy,Economic Dashboard,Unemployment,Washington Examiner,Great Depression

Adjusted for inflation, the wages of U.S. workers are down 3 percent since 2005. U.S. median income has fallen 5.5 percent. The reason is simple: Although the total number of jobs in the U.S. has finally returned to its pre-recession level, positions now being created in the never-ending recovery pay wages 23 percent lower than those that disappeared in the Great Recession. Low-wage — often part-time — jobs are replacing high-wage, full-time jobs.

This finding, from a 44-page report by the U.S. Conference of Mayors, comes as little surprise. It confirms what others have demonstrated elsewhere. The economic expansion promised by President Obama in 2009 has been exceptionally sluggish in comparison to previous recoveries and remains so nearly six years later with this milestone.

The slow recovery is placing the economy on even weaker footing than it was before the recession began.

As the mayors' report outlines in detail, jobs in high-wage sectors like manufacturing and construction, which pay $63,000 and $58,000 per year, respectively, are being replaced by jobs in “the lower wage sectors of hospitality ($21,000), health care ($47,000) and administrative support ($37,000).” As sectors with better jobs decline and those with less desirable jobs advance, the mayors calculate that employed workers alone have lost $93 billion in income.

This is one more indication of how the slow recovery is placing the economy on even weaker footing than it was before the recession began. Even taking the retirement of the Baby Boom generation into account, the share of Americans who work for a living — the employment-population ratio — continues to hover near a multi-decade low. And according to the Bureau of Labor Statistics, the number of full-time jobs last month was still 3.4 million below where it was at its peak in December 2007.

This is, apparently, the new normal: Lower wages, part-time jobs and fewer workers who earn less supporting federal and state governments that have larger debts than ever before and much bigger and costlier populations of dependents and retirees.

The mayors' report seems especially concerned with the issue of income inequality. But the fact that workers now make less is not the root of the problem, but a symptom of continued economic deterioration nearly seven years after the Great Recession began. Some of the deterioration, such as the decline in manufacturing, predates Obama. But it is also worth asking once again what he is doing about it — or if what he is doing makes it worse.

With the economy so fragile, Obama has stalled in approving the Keystone XL pipeline, which would both improve safety in the transportation of oil and create tens of thousands of good construction jobs at no cost to the taxpayer. Obamacare, the new greenhouse gas regulations and the proposed minimum-wage hike (projected to destroy up to 1 million jobs) place greater up-front cost burdens on the businesses upon which families — and governments — depend for their lifeblood.

Taken together, such policies make for slower growth and fewer good-paying jobs. If Obama wants the job market to recover faster, he should stop hanging dead weights on its belt.

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