The Decline Of The American Work Ethic Will Exacerbate The Oncoming RecessionAmericans have clearly gotten used to not working and have chosen to live off the pandemic welfare that remains rather than return to the workforce.BY: ANDY PUZDER
JULY 08, 2022
The Atlanta Federal Reserve recently projected that second-quarter GDP fell by 1.9 percent. If its model proves correct, the U.S. economy has fallen into a recession with GDP shrinking for two consecutive quarters. Whether we are technically in a recession is far less important than the reality of the recession Americans have been experiencing for months. At this point, with ongoing historic inflation, Americans are also likely enduring stagflation.
The Biden administration’s bad economic policies bear much of the responsibility. So, the administration and congressional Democrats are trying to distract from the contracting economy and runaway prices by pointing to the supposedly strong labor market. They argue that the country is not in a recession as long as the unemployment rate stays low. As with so much, we’ve heard from this administration, it’s just not true.
On Friday, the Labor Department announced that the economy created 372,000 jobs in June and the unemployment rate held at 3.6 percent. President Biden has continually bragged about the supposed historic job creation under his watch taking credit for people returning to work following the pandemic.
Yet the labor market isn’t as rosy as the topline unemployment rate suggests. There are still over 500,000 fewer people working today than before the pandemic despite the V-shaped recovery Biden inherited from President Trump.
Yet, employers are desperate to hire. There are 11.3 million unfilled jobs nationwide. That’s nearly 2 jobs for every unemployed person. This obviously raises the question: why are fewer people working than was the case pre-pandemic?
Well, the answer is equally obvious. Not enough Americans are willing to work. The labor force participation rate remains well below its pre-pandemic standard. In fact, were labor participation today the same as when the pandemic began, the unemployment rate would be 5.5 percent. It’s only 3.6 percent because fewer people are working or actively looking for work.
Generous social welfare programs, expanded during the Covid-19 pandemic, help explain this labor market paradox.
During most of 2021, supplemental federal unemployment benefits and boosted child tax credits, distributed monthly, paid most entry-level workers more to stay home than return to work. A June 2021 study by economists at the Committee to Unleash prosperity found that a family of four with two parents out of work earned around $72,000 in unemployment benefits, more than the national median household income.
* * *
Source:
https://thefederalist.com/2022/07/08/the-decline-of-the-american-work-ethic-will-exacerbate-the-oncoming-recession/
