When sifting through the March unemployment rate, it quickly became apparent that the drop to 7.6% was totally misleading. Although that rate has been the traditional measuring stick which the U.S. Labor Department has always touted, it has almost become irrelevant in light of the deteriorating labor picture it was cloaking.
With both labor force participation rate (63.3%) and workers as a percentage of the total population bouncing just near all-time lows, the full employment situation is in dire straits. It has also led to a new hike for social security disability payments as a percentage of the annual gross domestic product .
But the most disturbing aspect of the components comprising the complex employment scenario is the “youth” subsector (18-29 year olds), generating an 11.7% unemployment factor that is probably double that when including those working part-time, or less hours than required to receive company benefits. This declining labor force participation rate has created an additional 1.7 million young adults, not counted as “unemployed” by the U.S. Department of Labor. This agency does not include them in the potential labor force, because they have given up looking for work.
To assuage this problem, the Administration has gone full tilt in expanding the food stamp and debit card programs, which have nearly doubled since the Obama Administration took office on January 20, 2009. Also added has been the Social Security disability largesse, unlimited unemployment compensation, and the ability to participate in parental insurance coverage up to the age of 26.
Although these programs were originally designed as a tide-over for the needy, they have also acted as a disincentive for many, who will not accept low paying jobs that hardly match what is available through federal assistance.
What is most disconcerting about this broadening of entitlements is that it makes the outlook for the “millennials” increasingly depressing. It’s not only the immediate jobs picture that’s discouraging. Even more concerning are the forthcoming healthcare cost increases and availability, plus the inevitable additional taxes that burden the shoulders of the maturing generation. This is due to the horrendous debt expense that will eventually have to be paid off in principal and interest yield.
Although the overall current 2013 U.S. economic outlook looks to be “acceptable,” it has turned into a “repair, maintenance, and instant-demand oriented,” rather than a bullishly expansive long-term strategy. Only a more amenable, business-friendly “expansion climate” could upgrade the outlook for the second half of this year.
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