WSJ: The Great American Jobs Machine--U.S. has fewer taxes and regulations onerous for employers

Wall Street Journal ^ | August 8, 2005 | Editorial

[OESY]

We would like to take a moment to pause and marvel at the U.S. economy. Friday's Labor Department report of more than 200,000 new jobs in July, and two million over the past year, provides the latest bullish details. But the larger story of American job creation, and its causes, is even more impressive.

First, more Americans have jobs today than at any other time in history. Second, over the past two decades or so, the U.S. has created more than 40 million jobs -- twice as many as Europe and Japan combined. And third, the U.S. has one of the lowest jobless rates of all developed nations.

It was only a year ago that John Kerry was blasting the "jobless recovery." Lou Dobbs was flogging "outsourcing" every night on CNN as a sign of peril for the American workforce. That criticism now looks wildly off base. The 5% jobless rate today is almost a percentage point below what it was during the same stage of the business cycle during the vaunted "Clinton expansion."...

But just when it seemed there was reason to celebrate, a new study by the Federal Reserve Bank of Boston warns that the low U.S. unemployment rate is a "false signal" of prosperity....

Labor economist Diana Furchtgott-Roth of the Hudson Institute has thoroughly refuted the Boston Fed study. She finds that "most non-participants are out of the labor force by choice -- in school, parenting their children, or retired early."....

We are undeniably losing some manufacturing jobs over time (although manufacturing output has risen as a result of new technology and productivity gains).

But those positions are being rapidly replaced with information, technology and service jobs -- most of which pay more than factory work and are less physically grueling....

[OESY]

[Graybeard58]

She finds that "most non-participants are out of the labor force by choice -- in school, parenting their children, or retired early."

I retired 6 years ago at age 54. I wonder if I have been counted as "unemployed"?

[EQAndyBuzz]

"But just when it seemed there was reason to celebrate, a new study by the Federal Reserve Bank of Boston warns that the low U.S. unemployment rate is a "false signal" of prosperity.... "

Federal Reserve Bank of Boston. Might as well have said the Federal Reserve Bank of Peking.

[fatrat]

yep, me 11 years ago at the age of 49, bet i am counted as unemployed too.

[Haru Hara Haruko]

Just think how rich we would be if we returned to a pre-New Deal ratio of government to GDP.

This article does omit one big factor: Lots of people are bringing home big bucks as war contractors. We'll need a bit more economic cushion before letting the air out of that.

[mtbopfuyn]

First, more Americans have jobs today than at any other time in history.

Excuse me, but there are more Americans now than at any other time in history.

Second, over the past two decades or so, the U.S. has created more than 40 million jobs -- twice as many as Europe and Japan combined.

There's the operative word - created. Were the jobs actually needed or worth while?

And third, the U.S. has one of the lowest jobless rates of all developed nations.

Apples and oranges. We aren't responsible for other nations' job rates.

[Reaganghost]

When the Chinese and Japanese stop loaning us money to build McMansions that we can't actually afford, and those construction jobs, materials jobs, and furnishing jobs that are associated with residential construction dry up, will we still be in a feel good mode? When the inflation from all that credit dries up, will the value of the McMansions fall? Will the stock market fall? Will the credit inflated jobs still be there when the boom is over? The constant is the debt; it will still be there, but the means to pay it back will not be so clear cut.

Forget the consequences of our decisions. If it feels good; do it. When the construction workers are through constructing, the building materials makers are through making, and the furnishers are through furnishing, who will pay the taxes that fund our gargantuine government and all of its social welfare programs including Social Security and Medicare? Oh, I remember, Ben Bernacke and his famous printing press will simply steal the wealth of the people who didn't participate in the giant borrowing and spending spree that the WSJ is gloating about. Government will ensure that nobody escapes being punished for the sins of a few. Welcome to the Democrats', and now maybe the Republicans', view that we are all created equal and all in this together whether we want to be or not.

[litehaus]

Same paper had small article saying that renowned Prince from Saudi Arabia, world class investor, Citibank former "owner", is selling his interest in Canary Wharf? Londons secondary financial center? Has he made enuf, or (conspiracy here!) doe she know it's gonna get hit? Paranoia reigns!!

[Alberta's Child]

For some time I've suggested that government jobs should be substracted from the employment rolls when computing various employment-related statistics like these. I for one am a bit surprised to see the Wall Street Journal accept these figures at face value.

[the invisib1e hand]

thx for posting the Journal's editorials, even in part. I don't to read the paper in the morning any more.

[doc30]

Apples and oranges. We aren't responsible for other nations' job rates.

Absolutely correct. Moreover, other nations calculate jobless rates differently. Canada, for example, has a more liberal definition. If you read the newspaper employment classifieds once a week, you are counted as an active job seeker. Once corrected for differences in how the labor rate is calulated, Canadian unemployment rates are 0.1 or .02 percentage points higher than in the U.S. and not the 2-3 percantage points as they appear.

[A. Pole]

The 5% jobless rate today is almost a percentage point below what it was during the same stage of the business cycle during the vaunted "Clinton expansion.".

The very fact that free traders use low "jobless rate" as the argument is a proof that they speak in bad faith.

First unemplyment does not count people who are not on job market and counts menial jobs or derivatve jobs same way as the jobs which are highly skilled and advance the economy.

Free traders/free marketeers are not so stupid no to know it. But they think that general public is stupid.

[A. Pole]

I retired 6 years ago at age 54. I wonder if I have been counted as "unemployed"?

No, you just "left" the job market. But if you start a new McJob you will be gainfully employed.

[Rodney King]

First unemplyment does not count people who are not on job market and counts menial jobs or derivatve jobs same way as the jobs which are highly skilled and advance the economy.

That's true, but how do we accuratley measure the state of the economy? Personally, I don't know anyone who is jobless who doesn't "want" to be. Some of them think they don't choose to be jobless, but given their level of irresponsibility, drug abuse, etc. they are in essence choosing to be jobless.

As for the quality of the jobs, I just don't know if there is anyone one good way to measure it. Surely, the free-traders over-exaggerate on one end, but the protectionists do as well. For 20 years we have been told by the protectionists that the only jobs being created are "hamburger flipping" jobs. Meanwhile Dell, Intel, Cisco, Mircosoft, etc. have been created.

[bayourod]

It doesn't matter what faults the "jobless rate" figure has. It is being used for comparison purposes. It's 5% now, it was 6% during the "Clinton expansion." That's a comparison of apples to apples. It doesn't matter if you don't like apples.

[RipSawyer]

I have suggested that each government job should be counted as two or more jobs LOST rather than gained. My reasoning is that almost all government employees are in fact COUNTERPRODUCTIVE and waste the productive efforts of others.

[Final Authority]

I think it is important for you and others to re-think the employment picture in the US and reflect on the positives on these threads.

During the last serious down turn, I would say in 2002 but even before in 1992, many technical people with advanced degrees that were accustomed to earning in the 6 figures or very high five figures were fired or downsized. I know of no one in my field who is out of work because of this and most of us are better off, but we are not employed in the traditional sense. We work for ourselves as consultants to the same companies who fired us or their competitors or have started up similar companies, and we make more money, have more time off, and pay taxes at a lower rate. We are individual companies, who can deduct all sorts of expenses off of our tax bills, can vacation when we want (within reason), and can never be fired again unless we just decide not to work.

I know engineers who have started up home improvement companies, started restaurants, gone into the motel business, or do what I do, consultant work in my chosen field.

If one doesn't have a job it is their own damn fault, period. I know what you will say, that it isn't the same type of job, right? You are correct, the job I have has no paid vacation, paid holidays, paid medical, paid life insurance, or any retirement, and you might say that I have no security as well. Unless you are Manny Ramirez for the Boston Red Sox, you have no job security. Job security was a concept that began following, and lasted only about 40 years after WWII. There never will be again, so get over it.

I make much more than I ever did, have more to show for it, can take time off in the morning to play ice hockey or go to the gym and work out, can take long weekends, and have a better lifestyle. The problem is, many peers who work for a company for a salary think I'm either rich or semi-retired. They are right but I don't tell them that, I want them to think I am still hungry.

[Sam Cree]

read later

[ex-snook]

Thanks for ping.

MAN OPENS FRUIT BUSINESS

WASHINGTON, D.C. December 31, 1930. The Hoover Administration reported today that unemployment rolls are down because many have started own business and are no longer looking for work.

[Alberta's Child]

In my circle of family, friends, acquaintances, etc. I know a lot of people who are always complaining about "unemployment," "loss of jobs," etc. -- and yet I don't know a single person who has been unemployed at any time during the last two years for any reason (other than their own volition).

I think that sums things up pretty well.