President John F. Kennedy tried to commit the federal
government to a target rate of 4 percent unemployment but it was rejected as
being too unrealistic and overly ambitious.
To prevent another Great Depression, an unemployment
insurance system was put in place after 1933 as a temporary cushion. Through
this insurance which gives money to those who become unemployed, unemployment
insurance props up aggregate demand during recessions.
Unfortunately, unemployment insurance replaces about one
half of the lost income of the unemployed persons who are insured. Economists
agree that “fewer than half of the unemployed actually collect benefits” and
the lost output that could have been produced had these people been working
cannot be replaced.
The system of payroll taxes and unemployment benefits helps
spread the cost of unemployment over the entire population, or so it was
thought. But it does not eliminate the basic economic cost nor does it prevent
the shrinking working population from shouldering an unfair burden of support resulting
from bad economic policies that have failed to create jobs and increase
aggregate demand.
When Gross Domestic Product (GDP) is below its potential,
and it is under this regime, unemployment is above “full employment.” This begs
the question then, is the reported unemployment of 5.5 percent accurate? The answer is no because discouraged workers
are no longer counted as if they had disappeared, and many unemployed have
shifted from the ranks of the unemployed to the ranks of the disabled and of
those on welfare.
A discouraged worker is an unemployed person who has given
up looking for work and is therefore no longer counted as part of the labor
force. Currently, it is hard to pin down the number of abled-bodied individuals
that comprise the American labor force given the fact that we have so many
illegal aliens in this country that are gainfully employed but work under the
radar of statistics. We do know that we have the lowest labor force
participation (62.7%) since the late 70s.
The World Bank lists the 2013 U.S. labor force as 158,959,242 persons. “Total labor force comprises people ages 15
and older who meet the International Labor Organization definition of the
economically active population. … The labor force includes the armed forces, the
unemployed, and first-time job-seekers, but excludes homemakers and other
unpaid caregivers and workers in the informal sector.”
http://data.worldbank.org/indicator/SL.TLF.TOTL.IN
In 2013, Brad Plumer told us that the
shrinking labor force is caused by: “1)
The Ageing of America; 2) The bad
economy is keeping workers in school and out of the labor force; 3) More
workers are going on disability insurance.” http://www.washingtonpost.com/blogs/wonkblog/wp/2013/11/08/the-u-s-labor-force-is-still-shrinking-rapidly-heres-why/
The victims of high unemployment or forced partial
employment due to Obamacare are paying a high financial and psychological price,
costs that are borne quite unevenly by different groups of the population.
Instead of addressing the sluggish economy, the lack of job
creation, the job-killing Obamacare, the job-killing EPA draconian regulations,
the regime is offering grants to the unemployed, the disabled, and discouraged,
and the generational welfare recipients.
On April 6, 2015, under the heading,” U.S. Government wants
to help you,” Resource Depot sent out an email that said, “Did you hear the
news? The U.S. economy isn’t getting better anytime soon. Thankfully, benefits
may be available if you qualify for them.” (See if you qualify) “You may be
eligible for a government grant. Many Americans never requested their piece of
the $787 billion Recovery Stimulus. If you believe you may be entitled to some
of these fund(s), please review your options.” (Click here to review your
options)
If you are unemployed, discouraged, partially employed, or
on welfare, do not worry, there are now grants to assure that you get your
undeserved, unearned piece of the pie bought and paid for by someone else who
does not mind supporting you financially – it’s the socialist way of spreading
the wealth, take from the productive and give generously to the unproductive.
While we keep printing, spending, and giving away billions
of dollars like there is no tomorrow, can anybody mathematically comprehend
what $18 trillion of national debt means? Does anyone even care anymore?
Copyright: Ileana Johnson 2015
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