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Washington, we have a problem. For the third straight month, job growth in the United States has been anemic. The net increase in employment – after subtracting losses from gains – was a mere 80,000 in June and new adjustments put the figure for May at 77,000 and for April at 68,000. In other words, in the entire second quarter of the year, jobs increased by fewer than a quarter of a million. Normally, about 2 million Americans enter the labor force annually, so if we’re producing just a million jobs, more and more people are going to be out of work. A couple of interesting comments: Academic economist John Lott, writing on the Fox News site, points out that the U.S. is NOT doing better than Europe. Yes, our horrible raw unemployment rate (8.2 percent) is lower than theirs (11.1 percent), but they define unemployment differently. For a fairer comparison, we should look at the proportion of people working to the workforce as a whole. That way, we can take into account people who are so distressed by the job market, they have given up looking and are thus not counted as unemployed. Lott notes that since 2009, the labor force participation rate in the U.S. has dropped by three percentage points. In the 17 countries of the euro currency, it’s dropped by half that. And David Malpass, the former Treasury official who heads Encima Global, the economic consulting firm and is a regular contributor to the Bush Institute’s economic growth website, writes: “The two-fold overarching problem is deep: the economy needs to be creating jobs much faster to bring the unemployment rate down, and full-time employment remains weak, meaning job skills for a growing portion of the population are atrophying with each additional month of slow and part-time hiring.” The point about full-time employment is critical. It dropped by about 10 million between early 2008 and 2010, and it’s barely recovered – still down by about 7 million from the peak. Meanwhile, part-time employment is up 3 million over the past four and a half years. A true recovery trades part-time employment for full. A true recovery is what we haven’t got. In fact, this is worst rebound from a recession since the 1930s. Three years after the mid-‘70s recession, we were growing at 5.6 percent. Three years after the early ‘80s recession, we were growing at 4.1 percent. Three years after the early 1990s recession, we were growing at 4.1 percent. Three years after the early 2000s recession, we were growing at 3.5 percent. Now, three years after the 2008-09 recession, we are growing at 2 percent. Ultimately, our employment ills are a symptom of our lack of growth. When an economy grows, more people get hired full-time, and the unemployment rate drops dramatically. Between 2003 and 2006, during the George W. Bush presidency, the U.S. was growing at an average of 3 percent, and the unemployment rate dropped from 6 percent to 4.6 percent. That’s what 3 percent growth can do. As for 4 percent: look at the Reagan years. From 1983 to 1988, growth averaged 4.4 percent, and the unemployment rate fell from 9.6 percent to 5.5 percent. During the George W. Bush years (2001-08, inclusive), unemployment averaged 5.3 percent. Right now, it’s 8.2 percent. What to do? Concentrate on growth, growth, growth. Job creation doesn’t happen in a vacuum. It happens in an environment in which new businesses are being formed, new investments are being made, and energetic and creative citizens are being encouraged to take risks. That’s not happening now, but it could – and very quickly – if we got the policies right. This post was written by James K. Glassman, the founding executive director of the George W. Bush Institute in Dallas, Texas. The Bush Institute’s first book, The 4% Solution: Unleashing the Economic Growth America Needs, goes on sale July 17, 2012.
James K. Glassman is the Founding Executive Director of the George W. Bush Institute and the interim Director of the Military Service Initiative.
He served as undersecretary of state for public diplomacy and public affairs from June 2008 to January 2009, leading the government-wide international strategic communications effort. Among his accomplishments at the State Department was bringing new Internet technology to bear on outreach efforts, an approach he christened “Public Diplomacy 2.0.”
From June 2007 to June 2008, Glassman was chairman of the Broadcasting Board of Governors (BBG). He directed all non-military, taxpayer-funded U.S. international broadcasting, including Voice of America, Radio Free Europe, and Alhurra TV. Glassman was a senior fellow at the American Enterprise Institute in Washington, D.C., from 1996 to 2008, specializing in economics and technology.
He has been moderator of three weekly television programs: Ideas in Action and TechnoPolitics on PBS and Capital Gang Sunday on CNN.
Glassman has had a long career as a journalist and publisher. He served as president of Atlantic Monthly, publisher of the New Republic, executive vice president of U.S. News & World Report, and editor and co-owner of Roll Call, the Congressional newspaper. Between 1993 and 2004, he was a columnist for the Washington Post and the International Herald Tribune and continues to write regularly for Kiplinger’s Personal Finance and Forbes. Shortly after graduating from college, he started Figaro, a weekly newspaper in New Orleans. His articles on finance, economics, and foreign policy have appeared in The New York Times, The Wall Street Journal, the Los Angeles Times, and various other publications.
Glassman has written three books on investing, and in April 2012 was appointed to the Investor Advisory Committee of the U.S. Securities and Exchange Commission. He was formerly a member of the Policy Advisory Board of Intel Corporation and a senior advisor to AT&T Corporation and SAP America, Inc.Full Bio
TARIFF-IED: Trade Talk with Matthew Rooney
This week, trade relations between the U.S. and India are continuing to escalate. Earlier this month, the U.S. stopped granting India special trade privileges by taking away the Generalized System of Preferences (GSP) program, and India has responded by enforcing more tariffs of its own. The George W. Bush-SMU Economic Growth Initiative Director Matthew Rooney breaks down the trade conflict: For more information on trade groups and the global economy, visit www.bushcenter.org/scorecard.
How Trade Spreads Holiday Cheer
It is projected that the average American household will spend more than $1,000 during the holidays this year.
Deporting Salvadorans May Lead to Economic Decline
We should think carefully about a policy whose major impacts are likely to be reductions in employment and economic activity here at home, and increased instability and lawlessness along our borders.
Bush Institute's Laura Collins Talks Immigration on Good Morning Texas
Last week, Deputy Director of Economic Growth at the George. W. Bush Institute Laura Collins spoke with Good Morning Texas about immigration myths. During the interview, Collins had the opportunity to set the record straight and address common misconceptions about legal immigrants living in America today. The segment was inspired from facts released earlier this fall by the Bush Institute in the third edition of America's Advantage: A Handbook on Immigration and Economic Growth. Watch the full Good Morning Texas interview here.