Bureau of Labor Statistics data released Friday show the unemployment rate has refused to budge. Despite 227,000 new jobs in February, the number of unemployed Americans remained unchanged at 12.8 million, as did the high 8.3 percent unemployment rate. Some 5.4 million have been jobless for more than 27 weeks, and a million have simply thrown in the towel and no longer look for work. These grim facts leave little room for optimism.
Veterans are the best off in this economy with a 5.4 percent unemployment rate, which is significantly lower than the national average. That should come as no surprise as our former military personnel are generally educated, skilled and know how to get the job done.
In general, young people don’t fare quite so well. Men aged 18-19 face an eye-popping unemployment rate of almost 24 percent; men aged 20-24 do only slightly better with 15 percent unemployed. The figures for young women are also sobering. Almost 18 percent in the 18-19 age range and 11.7 percent of 20-24 year-olds are out of work. By contrast, the unemployment rate is only 5.9 percent for people over the age of 55.
Lack of education also serves as a barrier to landing a position. The labor-participation rate of those with less than a high-school diploma is barely over 40 percent, and almost 13 percent of them are unemployed. Some 54 percent of high-school graduates are in the labor force with an average 8.3 percent unemployment rate. On the other hand, with a participation rate of over 73 percent, the unemployment rate of those with a bachelor’s degree or higher is only 4.2 percent.
Welfare-state policies have created this dire situation and established a permanent underclass. The longer people remain unemployed, the more their skills atrophy, and the harder it is for them to find a productive place in society. More than 40 percent of the unemployed have fallen into the long-term trap. Much of the blame can be laid on the continuous and counterproductive extension of unemployment benefits. Extensive research shows that when you pay people not to work, they have less of an incentive to go out and look for work.
The jobs that are going unfilled are all too often in manufacturing and skilled trades, areas that have been ignored for far too long. Instead of pushing everyone into college from high school - only to rack up debt the size of a mortgage - more emphasis should be placed on developing these trade skills.
Unless America changes course, things are only going to get worse. Labor productivity, a key factor in maintaining U.S. competitiveness, is beginning to slow. Productivity grew 0.4 percent in 2011, but labor costs grew by 2 percent, creating an unsustainable disparity. Presumably more investment is needed to jump-start productivity, but firms are reluctant to pour money into operations with the threat of costly new federal red tape on the horizon.
Simplifying rules and reducing the regulatory burden would free up the private sector to create jobs. Two hundred thousand new positions a month are simply not enough for a country of over 300 million souls.