Will Obama’s Healthcare and Wage Policies Actually Kill Jobs?
In his 2014 State of the Union address, President Barack Obama painted two pictures of the United States. One was necessarily optimistic, forward looking and forward thinking, a vision of America working at full potential to capitalize on the opportunities presented it. The other showed a nation crippled by economic crisis, the glass half empty and leaking what was left through cracks in the system. “The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by — let alone get ahead,” the president said. “And too many still aren’t working at all.”
The data are there for everyone to see, but it can sometimes be hard to interpret. At 6.6 percent, headline unemployment was as low in January 2014 as it was in November 2008, just as the financial crisis began spilling over into the labor market. However, at 63 percent, the labor force participation rate is down 2.9 percentage points over the same period. Total payroll employment is up 1.5 percent over that time frame but is still below its pre-crisis peak. In absolute terms, fewer Americans are employed now than they were before the crisis.
Putting Americans back to work has been and will continue to be one of the biggest challenges facing policymakers and business leaders. Earlier in February, the Congressional Budget Office reported that “To a large degree, the slow recovery of the labor market reflects the slow growth in the demand for goods and services.” Unemployment naturally reduces income, which reduces consumer spending power, which reduces business income. When business income is low and demand is stagnant, they can’t grow. When businesses can’t grow, they can’t hire people. It’s a destructive cycle that has plagued the recovery.