After a review of the Labor Department's March 2012 economic report, I published an analysis showing that America had a jobs deficit of nearly 10.4 million jobs as compared to a "normal economy." In the four months that have followed, because the population continues to grow more rapidly than job creation, the total jobs deficit has worsened by an additional 229,000. That flies in the face of the President's recent assertion that "the private sector is doing fine."
Instead of "doing fine" and a steady recovery from the effects of the recession, net job creation continues to fall backwards. The arithmetic is straight forward using Bureau of Labor Statistics for June:
| Current Total Available Population | 243.155 | million | |
| Normal Labor Force Participation Rate | multiply | 0.6653 | |
| Active Labor Force Total | equals | 161.771 | million |
| Normal unemployment level = 5.4% | minus | 8.736 | million |
| Normal total employed population | equals | 153.035 | million |
Unfortunately, instead of more than 153 million that should be employed in a normal healthy U.S. economy, only 142.415 million people had jobs in June according to the Labor Department's report. That's a jobs deficit of 10.62 million people.
For this analysis, I calculated the average monthly Labor Force Participation Rate from January 1990 through December 2008 using BLS statistics; the 19 consecutive years prior to Obama taking office. I used the Congressional Budget Office's definition of a "normal unemployment" rate of 5.4%.
Until there is a significant change in the two big variables in the above analysis, the Labor Force Participation Rate and the Unemployment Rate, there is not going to be much good news for President Obama to crow about. The most recent LPR (63.8%) and unemployment (8.2%) are each nearly 3% worse than levels that exist in a typical healthy American economy.
President Obama has tried to spin the paltry new job creation numbers as "a step in the right direction." But, clearly, the small growth in jobs isn't even keeping up with population growth, much less returning the workforce to a healthy level. Specifically, the 80,000 new jobs credited in the June BLS report were barely half the population increase of 156,000 for the month.
Obama is also fond of pointing out that 4.4 million new jobs have been created in the last 28 months. But, what he conveniently doesn't mention is that the workforce population has increased by 7.3 million people during the same period. He's short of break even by almost 3 million jobs.
Obama's economic policies obviously have not worked, and have left the American market place with enormous uncertainty and anxiety. Obama's and his Capitol Hill Democrat cohorts' latest attempt at a solution is a bizarre proposal to punish with a tax increase the same segment of the population they are trying to convince to create more jobs.
By contrast, Mitt Romney succinctly put forward a five step plan last week on CNBC with Larry Kudlow that demonstrates why by more than a 2:1 margin voters trust Romney to manage the economy over Barack Obama. The five point plan stands in stark contrast to "most of the measures the President pursued that hurt job creation" according to Romney, and includes the following principles:
- Take "extraordinary advantage" of America's Energy Resources
- Opening up Foreign Trade, particularly in Latin America
- Convince the world that America is serious about Balancing our Federal Budget
- Improve our Human Capital with training for adults and better schools for our kids.
- Restore Economic Freedom – "Keep tax rates down. Get regulators to see themselves as allies of enterprise; not the enemies."
Romney asserted, "If we do these things, you'll see America's economy come roaring back…We'll see the kind of economic resurgence the American people expected some years ago."
Romney told Kudlow that he would lay out more details of his plans to restore our economy to health in coming weeks of the campaign. In various speeches and policy briefs, the GOP nominee has already done that.
Compared to Obama's war on fossil fuels, his seizure of the health care and financial services industries, his 50% increase in the federal debt with trillion dollar annual deficits, an avalanche of new taxes particularly in ObamaCare, and a "regulation-gone-wild" philosophy throughout the bureaucracies, Romney's bullet point plan sounds like good place to start over. November can't come soon enough.
