Who can complain about nearly a quarter-million jobs created in February? Until, that is, you learn that more people left the labor force than got new jobs, continuing a long-term trend under President Obama.
The White House, which is always quick to caution about reading too much into a bad monthly jobs report, was eager to tout the February numbers as evidence that the nearly four-year-old recovery is finally “gaining traction.”
Why not celebrate? The economy added 236,000 jobs and the unemployment rate dropped to 7.7%, the lowest it’s been since December 2008.
It was also one of those rare occasions under President Obama when an economic indicator actually outperformed expectations. But while everyone welcomes good news on the jobs front after years of sluggish-to-nonexistent growth, the country is still a long, long way from “mission accomplished.”
If anything, there are still some deeply troubling signs in the labor force that the February numbers have not dispelled. While the country gained 236,000 jobs, the ranks of those not in the labor force — people who don’t have a job and stopped looking — swelled by 296,000.
That continues a trend throughout the Obama recovery, which has seen the non-workforce climb almost twice as fast as people with jobs.
Looked at another way, just 58.6% of Americans work today, down from 60.6% when Obama took office. The average over the previous two decades was 63%.
Demographic changes can’t explain these results, particularly given the many other signs that desperation, not retirement, is the driving force behind the explosive growth of non-workers.
There are, for example, 6.8 million people who aren’t in the labor force but would be if there were jobs available. That’s up more than 1 million since the recovery started in June 2009. The number of long-term unemployed is still higher than it was 3-1/2 years ago — and it jumped more than 90,000 in February.
There’s also the fact that 3.7 million workers have gone on the Social Security disability program since mid-June 2009, the fastest enrollment pace ever.
And as we now know from the Fed’s latest beige book, ObamaCare is playing a major role here as well, with businesses telling Fed banks across the country the law has caused them to lay off or not hire workers.
Because of all this, the economy is still 3 million jobs below its previous peak. When you factor in population growth, the jobs deficit is more like 10 million.
In this context, the February jobs report shouldn’t be a cause for celebration so much as a rallying cry for pro-growth economic policies. (IBD)
Gallup’s survey found that the percentage of part-time workers as a share of the overall labor force surged to 20.6%, the highest level in data going back to the start of 2010 — just as the employment recovery began.
The report provides the most dramatic evidence yet of the impact the 2010 health law is now beginning to have on employers of modest-wage workers and — even more importantly — on their workers.
It also suggests that relatively upbeat headline jobs data — both jobless claims and the upcoming February employment report on Friday — may be distorted by the underlying shift to part-time work.
“Policymakers should not be misled by the surge in part-time jobs in early 2013,” noted Gallup Chief Economist Dennis Jacobe. “The economic reality is that the U.S. job situation worsened in February.”
Treasury Department guidelines released in January gave businesses until June 30 before their staffing levels begin to influence fines that may apply in 2014 when the ObamaCare exchanges launch.
The law exempts companies with fewer than 50 full-time equivalent employees from providing health care coverage. Firms with at least 50 workers face fines based on the number of employees who receive ObamaCare subsidies, which are only available to people who lack affordable coverage from an employer.
But those fines — up to $3,000 per ObamaCare subsidized worker — won’t apply for part-time workers, which the law defines as 30 hours per week.
An obvious strategy to minimize fines is to cut some workers to just below the 30-hour threshold. Staying below the 50-worker threshold also may be an option.
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Recovery Summer IV Coming Soon…