On the campaign trail, President Obama mocked Trump’s desire to retain jobs in this country, in effect, predicting that nothing could be done and that there would be no “magic wand.” In reality, Trump did not have to become a wizard, he just picked up the phone and made some calls, something called leadership, a commodity that has been in short supply for the last eight years.
Our new President will face quite a task in improving a rather stagnant economy. Over the past 15 years, since China was admitted to the World Trade Organization, 70,000 factories have closed in our country as our manufacturing base has been decimated. In the recent labor report, another 4,000 manufacturing jobs were lost, continuing this disastrous trend.
On the positive side, 178,000 new jobs were created and the unemployment rate dropped to 4.6%. Usually economists believe that anything less than 5% unemployment is “full employment.” Unfortunately, there is much more to the economic story that the advertised unemployment rate.
For example, last month, there were 446,000 Americans who left the workforce altogether, which means there are currently more than 95 million Americans outside of the workforce. This is a new and disturbing record for our nation, giving us a labor force participation rate of only 62.7%, near a forty year low.
Since July of 2016, the civilian labor force has increased by only 199,000, while the number of people outside of the workforce has increased by 722,000. Over the course of the two Obama terms, the number of Americans outside of the workforce has increased by almost 15 million. While some of these people are retiring and leaving voluntarily, many others are simply discouraged and giving up on the job search. Among this group are Americans forced to accept federal assistance just to survive.
Even more disturbing is that the Americans with jobs did not see any increase in salary. In fact, wages dropped by 0.1% last month, the first decline in almost two years, while the average work week remained the same, an anemic 34.4 hours.
As wages dropped last month, health care costs soared, with premiums increasing an average of 25% or more in some states. It is no surprise that the new administration will make improving the economy and repealing Obamacare their first priority.