| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

Follow Finfacts on Twitter

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : US Economy Last Updated: Apr 4, 2014 - 10:21 AM


Dr Peter Morici: Friday's US jobs report
By Professor Peter Morici
Apr 4, 2014 - 8:49 AM

Email this article
 Printer friendly page
President Barack Obama gives a signing pen to Jacob Miller, brother of Gabriella Miller, after signing H.R. 2019, the "Gabriella Miller Kids First Research Act", in the Oval Office, April 03, 2014. The law ends taxpayer contributions to the Presidential Election Campaign Fund and diverts the money in that fund to pay for research into pediatric cancer through the National Institutes of Health.

Dr Peter Morici: Friday, the US Labor Department is expected to report the economy added 206,000 jobs in March. A significant improvement over January and February when harsh weather depressed hiring, this is still well below the pace needed to lower unemployment to an acceptable level.

The jobless rate is expected to fall a notch to 6.6%—well below the 10% recession peak—but most progress has been accomplished by a falling adult labor force participation rate. Were the same percentage of adults employed or looking for a job today as when the recession began, the unemployment rate would be 9.6% but 350,000 jobs would be required each month for three years to take unemployment to 6%.

Baby boomer retirements are not driving down adult participation—seniors ages 65 to 69 working has risen from 27 to 31% over the last decade. Neither is young adults staying in school longer the primary force sidelining adults.

Rather, decent employment opportunities for prime working age adults have not kept pace with population growth. The percentage of Americans ages 25 to 54 that has a job is down to 76.5% from 81.8% at the beginning of this century, despite more women in the workplace.

Shrinking opportunities, especially in manufacturing and the building trades, have hit men particularly hard. One out of six between the ages of 25 and 54 is without a job, and many have little prospect of finding one.

Twenty million Americans over 25 are working part-time, owing much to poor economic conditions and government incentives not to work full time. ObamaCare and the Earned Income Tax Credit (EITC) encourage low wage employees to work part-time to avoid losing benefits, and employers are limiting workers to less than 30 hours per week to avoid health insurance mandates.

All this pins down wages—especially for high school graduates with little additional training and college graduates from non-elite institutions—and worsens income inequality. At the root is slow economic growth that has deviled Presidents Bush and Obama.

During the Reagan-Clinton era, GDP growth averaged 3.4%; however, since 2000 the pace has slowed to 1.9%, thanks to well meaning but ill conceived government policies.

Trade agreements have further exposed U.S. manufacturers to foreign competition, but have not similarly improved their market access abroad. Principal competitors China, Japan and Germany all systematically undervalue their currencies to make their exports artificially cheaper than U.S. products both in domestic and rapidly growing Asian markets.

Similarly, unlike Canada, which shares many of the same demographics shaping U.S. labor markets, the United States has chosen to outsource—not reduce—environmental risks associated with petroleum development by shutting down or curtailing production on the Atlantic and Pacific Coasts, the Gulf and Alaska.

Those policies are responsible for a $475bn trade deficit, which easily suppress growth from 3.4 to 1.9%. Just the lost R&D, so prevalent in manufacturing and energy but now captured by foreign competitors, could boost U.S. economic growth by 2%age points a year.

Also, dysfunctions in banking, higher education and health care imposed by misguided regulations and government subsidies permit professionals to earn inflated incomes but harm the availability of credit, workers with the skills employers need and affordable health care and insurance. Along with the inefficiencies imposed by the excessively complex corporate and personal income tax systems, those lower productivity, investment and growth dramatically.

Emerging from a long recession, the economy should grow at 4 or 5% and create the needed jobs, but misguided and abusive government policies do not permit the economy to accomplish takeoff speed and raise wages.

Peter Morici,

Professor, Robert H. Smith School of Business, University of Maryland,

College Park, MD 20742-1815,

703 549 4338 Phone

703 618 4338 Cell Phone

pmorici@rhsmith.umd.edu

http://www.smith.umd.edu/lbpp/faculty/morici.html

Related Articles
Related Articles


© Copyright 2011 by Finfacts.com

Top of Page

US Economy
Latest Headlines
US jobs rose by 215,000 in July; Unemployment rate stable at 5.3%
US economy grew at weak pace in Q2 2015 - Worst expansion since 1945
Decoupling of per capita GDP, productivity, private employment, and median family income in America
US economy stumbles again in 2015
Income gap highest in 30 years; No inequality rise in best-paying US firms
Fed minutes raise doubts about fragility of US recovery
Senate Democrats block trade deal authority for Obama
Five firms held 25% of top US non-financial companies cash pile in 2014
US added 223,000 jobs in April; Broad jobless rate at 10.8%
Investment struggles as dividends/ share buybacks at top US firms to exceed $1tn in 2015
US economic growth plunged in Q1 2015
Why the Fed may (almost) never raise interest rates
US jobless rate falls to 5.5%; Broad rate at 11%; Participation rate at 1978 level
US added 257,000 jobs in January; Broad jobless rate at 11.3%
US economy will soon see best years in a decade
US annualised GDP slowed sharply in final quarter 2014
US budget deficit to fall to 2.6% of GDP in 2015
US added 252,000 jobs in December; Jobless rate falls to 5.6%
US adds 321,000 jobs in November; Private sector adds 10.9m jobs in 57 months of growth
US manufacturing slowed in November
US retail spending over Thanksgiving weekend fell 11%
US consumer spending weak in October; Business investment fell again
US third-quarter GDP revised up to 3.9% annualised rate
After destroying banking secrecy US helps Swiss exporters
US oil imports from OPEC cartel at 30-year low
Tax-inverted "Irish" firm Actavis agrees to buy US Botox maker Allergan
US nonfarm payroll employment rose 214,000 in October' Jobless @ 6-year low
Swiss bankers await fallout of US tax evasion acquittal
Two PMI reports give contrasting trends on US manufacturing
US GDP increased at annualised 3.5% in third quarter of 2014
US city home price growth slowed again in August; Consumer confidence rebounded in September
US new orders for manufactured durable goods fell again in September
Loans to buy US shares at record highs
Global markets slide; US industrial production best in 3 years & jobless claims in 14-year low
US federal budget deficit dips to 2.9% of GDP in fiscal year 2014
US added 248,000 jobs in September; Jobless rate falls to 5.9%
US set to become world’s leading liquid petroleum producer again
Obama issues new rules to combat tax inversions
US Securities and Exchange Commission to pay $30m award to foreign whistleblower
Typical American household income in 2013 was below the 1989 level