The Trump administration is very proud of the US's historically low unemployment figures (lowest in 50 years), but statistics are deceiving, especially labor statistics.
The most obvious fact about the low unemployment numbers is that employment statistics exclude "discouraged workers" who have given up looking for work; the number of discouraged workers is higher than it's been since the 1980s.
The jobs that remain are often not good ones. Wages are stagnant, despite low unemployment (which usually drives wage increases), because trade unions have been weakened and "free trade" deals means that US employers can seek cheaper labor in other countries.
This has driven a large slice of the US workforce back to university in the hopes of getting a better job (even as US tuitions have hit a record highs, and the wage prospects for workers with advanced degrees is declining), exempting them from the workforce participation statistics and artificially inflating the employment numbers.
Finally, America puts people in prison like crazy: the millions of Americans rotting in prison are also not counted in the labor statistics.
This is Trumpian full employment: millions of people chasing precarious, work with starvation wages; millions more in prison, and the rest incurring lifelong student debts from "universities," including outright scams like Trump University.
Of course, Trump can't really take credit for this: as Obama has been at pains to point out, the rise of precarious work and the exit of discourage people from the workforce took part largely on the watch of the Democratic establishment, whose shift from protecting workers to protecting bankers has been a multi-decade, accelerating process.
GREG WILPERT: Okay. And finally, to what extent, if any, do the policies of the Trump administration deserve credit for the drop in the unemployment rate?
GERALD EPSTEIN: Almost none. The one factor that may be contributing to the continued expansion and slight acceleration is the tax cuts. Those will have some kind of fiscal stimulus, even though it’s mostly to the richest people. Plus, there’s a big huge increase in defense spending. And interestingly, that was timed so that it would come online around now before the election, it’s kind of a political-business cycle, as political scientists talk about it. So these huge increases in defense spending and the major tax cuts have probably had a positive effect on getting the economy growing, reducing the unemployment rate a little bit more.
But those things are temporary, and they’re also quite destructive in other ways. The main thing has simply been the fact that the expansion has been very slow over a long period of time, driven mostly by low interest rates. And you can tell that Trump even understands the importance of low interest rates, because he’s been railing against the Fed now that the Fed is trying to raise interest rates. If Trump thought this was something that was due to his policies, he probably wouldn’t put quite so much importance on the Fed and interest rates.
US Unemployment Rate Hits 50-Year Low: What Does the Number Reveal and Conceal? [Greg Wilpert/Real News Network]
(via Naked Capitalism)
