Forget about the 1 percent versus the 99 percent. It’s really more like the 0.000001 percent versus everybody else. A tiny group — mostly comprising the Obama White House, a bunch of Washington Democrats, progressive economists, and the media elite — continues to fixate on income inequality as America’s greatest challenge.
Most everybody else, the 99.999999 percent, sees things differently. Surveys continue to show Americans most worried about jobs and economic growth, not the income gap between the top and bottom. It’s a rational view given new employment data from the government. The January jobs report showed only 113,000 net new jobs created last month. It was the second straight month that job growth fell way short of both expectations and the level needed to return the U.S. economy to full employment. Now an alternative, less reliable jobs survey from the Labor Department shows much stronger employment gains. So perhaps reality lies somewhere in the merely mediocre middle.
What’s unfortunately indisputable, however, is that there is far less full-time work than there used to be — and should be. Before the Great Recession, there were 122 million full-time jobs in America. Now, four and a half years into the Not-So-Great Recovery, there are still just 118 million full-time jobs in America. That, despite a labor force that is 1.6 million larger and a non-jailed, non-military adult working-age population that is 14 million larger. To have the same share of civilian, noninstitutional adults working today as back then would require some 11 million additional full-time jobs.
Who are those people? We don’t exactly know. Some of those working less or exiting the labor force entirely are older Americans who can retire early from a physical job. Others are moms working only because their hubbies don’t have employer-sponsored insurance. But another group is abandoning work only because the Obamacare nudge of high effective marginal tax rates makes it financially smart, at least in the short term, to do so.
What we do know is that the CBO sees slowing growth in the labor-force supply as a long-term drag on economic growth. And so does the White House. As its economists state in last year’s administration budget proposal: “In the 21st Century, real GDP growth in the United States is likely to be permanently slower than it was in earlier eras because of a slowdown in labor force growth initially due to the retirement of the post-World War II baby boom generation, and later due to a decline in the growth of the working age population.”
Shouldn’t news that Obamacare worsens that depressing trend be at least mildly provocative to the authors of health-care reform? Apparently not — nor to the rest of the 0.000001 percent who will continue to offer false talking points about how income inequality hurts economic growth and reduces upward mobility.
America faces twin, interrelated challenges. First, we need an innovative, dynamic, entrepreneurial economy capable of creating lots of high-paying jobs. Second, we need a labor force of better educated natives and smart, entrepreneurial immigrants to fill those jobs. The importance of meeting those challenges is something 100 percent of Americans should agree on.
— James Pethokoukis, a columnist, blogs for the American Enterprise Institute.