EDITORIAL: No relief in the numbers

The government continues to sap U.S. productivity

Friday’s official jobs numbers were better than expected. The Labor Department says 165,000 private-sector positions were created in April, pushing the unemployment rate down to 7.5 percent, a decline of only a tenth of a percentage point from March.

This is a slim shaft of sunshine on the jobs front, but it was clouded by developments in other sectors of the economy. The statistics show an America still mired in a stagnant economy.

The Institute for Supply Management tracks U.S. manufacturing by surveying the firms that produce all types of goods. The institute’s manufacturing index dropped a half point to 50.7 in April, which is the lowest number so far this year. The institute’s employment gauge plunged four percentage points to 50.2, the lowest level since November, a signal of a decline in intended hiring. What this all means is that some new jobs are opening, but not nearly enough to provide relief to the millions still stuck in the unemployment lines.

Even for those lucky enough to have a job, the dismal arithmetic is reflected in the pocketbook. Increases in wages and consequent improvement in living standards depend on productivity growth. A year into President Obama’s term, labor productivity stopped growing in a meaningful way. In 2011, nonfarm business sector productivity grew a pathetic 0.6 percent, and last year’s number wasn’t much better at 0.7 percent. The reality of how bad this is hits home when the average employee checks his pay stub and finds his hourly wages increased by four cents last month and just 45 cents over the past 12 months. That’s not the “improvement” of a recovering economy.

It’s easy to zero in on the primary cause of the ongoing malaise — government tape binding the economy. There’s a lot of it, and it’s all red. The Heritage Foundation finds that regulatory costs increased by $70 billion in Mr. Obama’s first term. The implementation of Obamacare and the Dodd-Frank financial-reform legislation will impose tens of billions in new compliance costs on the private sector.

Regulations that are the bane of manufacturers have created a new category of job: compliance service technicians. Businesses are hiring workers with the arcane skill needed to navigate the expanding rules and regulations to ensure they’re meeting federal requirements. This doesn’t mean the goods produced at Acme Widgets will be of higher quality. Compliance jobs add nothing to the value of goods and services. They’re dead weight.

Many of the jobs created in the health-care sector, for example, are for navigators who can find a way through the murky waters of Obamacare. Providers of actual health-care services don’t see the same increase. There were 7,000 new jobs in the “social assistance industry,” for example, but only 2,700 of these were for child care.

That White House noise Friday morning was the popping of champagne corks, but the celebration of slightly better official jobs numbers is premature. Until the private sector sees relief from the harassing burden of government, it won’t become more productive. We can’t expect the malaise to lift soon.

The Washington Times

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