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Job market improving despite federal policies, not because of them

Raymond Keating

It’s been a long, hard slog on the economy and jobs for more than four years now. But the latest data from the U.S. Bureau of Labor Statistics shows life on the employment front.

According to the establishment survey, payrolls increased by 227,000 in February. That was the third straight month of job gains that topped 200,000, with the January estimate revised to an increase of 284,000.

As for the household survey, the fact the unemployment rate remained unchanged at 8.3 percent might be taken as a lack of progress. However, one has to crawl inside the numbers.

First, employment actually increased by a robust 428,000. This was the second month in a row of big gains. Since the household survey better captures small business activity, this points to some added life in the entrepreneurial sector of our economy.

In addition, the labor force grew in February by 476,000. That also was the second straight month of gains. Keep in mind the labor force was up and down in 2011, pointing to continued discouragement among workers.

These are welcome bits of data. At the same time, we need to keep in mind a long road lies ahead. Both the labor force participation rate (63.9 percent in February) and employment-population ratio (58.6 percent) remain near three-decade lows.

In addition, considerable risks lurk, including energy costs and Middle East troubles, European economic woes and a great deal of uncertainty swirling around U.S. policymaking.

It needs to be understood that recent gains on the jobs front were accomplished by entrepreneurs, businesses and investors in spite of the policymaking of recent years, certainly not because of such policies.

Among the policy risks that remain are energy policies that raise the costs of and discourage domestic energy production, the phasing in of ObamaCare and the commensurate costs of health care reforms, additional looming tax increases, monetary policy adrift from its proper goal of price stability, a nonexistent free trade agenda and an expansion of government that threatens economic growth over the short and long terms.

That all needs to change to get the U.S. economy firmly on a path of robust economic growth. We need pro-entrepreneur, pro-growth tax and regulatory relief, global leadership on free trade, sound monetary policy, smaller government and a pro-development energy agenda.

If misguided policymaking persists, the U.S. will continue to labor with an uneven, under-performing economy and the loss of our economic leadership and competitiveness on the global stage.

 

Website:
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. Reach him through the Web site at www.sbecouncil.org.
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Posted by on Mar 28 2012. Filed under Contributors, Opinion. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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