Contrary what we’re hearing from the Biden administration, the solution to our labor market problems is not massive government spending designed to create jobs. There are already 10.9 million openings, according to the most recent Bureau of Labor Statistics data, but only 7.7 million people are actively looking for work. So, businesses are finding it increasingly difficult to fill those openings which is why the jobs numbers are so dismal.
Stated simply, the problem is a shortage of workers not a shortage of job openings. Neither government spending intended to create more jobs nor government spending that discourages work will solve that problem.
To the contrary, as both August’s and September’s dismal jobs number show, such spending exacerbates the problem. While President Biden may not see it, Sen. Joe Manchin, D-W.Va., does. Last month he noted that "We have 11 million jobs that we haven’t filled, 8 million people still unemployed. Something’s not matching up here."
In his press conference following the release of the disappointing September jobs report on Friday (194,000 jobs created, 500,000 anticipated), Biden claimed that the unemployment rate dropping to 4.8% was a sign of recovery. Unfortunately, it isn’t.
The unemployment rate is only under 4.8% because the labor force, that is the number of people working or actively looking for work, is near historic lows. Again, the problem is a shortage of workers. In September, 183,000 people dropped out of the labor force and the participation rate declined to 61.6%. Were the labor participation rate at 63.3%, the rate we had under President Trump in February 2020, unemployment in September would have been a discouraging 7.3%.
Yet, rather than programs that encourage people to return to work, Biden and his Democrat allies want to increase government spending with much of it going to expand or create new government entitlements that will further discourage people from working. We’re talking huge – massive – increased spending.
On top of the $5.3 trillion we spent on a bipartisan basis during the pandemic and the $1.9 trillion the Democrats unilaterally authorized in March, Biden and the Democrats now want to pass an additional $1.1 trillion "human infrastructure" bill and a $3.5 trillion ($5.5 trillion properly scored) spending extravaganza with cradle to grave government benefits.
Why? Even assuming Biden’s big government spending would actually create new jobs, who would take them? It makes little sense to spend massive amounts to create jobs when we already have nearly 11 million unfilled job openings. It makes absolutely no sense to simultaneously discourage work.
Wages aren’t the issue. Yearly wages were up an impressive 4.6% in September and have been up by impressive percentages all year. Granted even at this rate of increase, wages can’t keep pace with the inflation Biden’s policies are creating, but employers are willing to pay up for workers. The problem is they just can’t find them.
Biden’s attempt to blame COVID for the dismal job openings ignores the fact that the COVID numbers were baked into economists projections for both August and September, and the actual number of job fell embarrassingly short of those COVID impacted expectations. Even factoring in COVID, the numbers were really bad.
What Biden and the Democrats seem to be missing is that encouraging people not to work isn’t just bad for the economy, it’s bad for them.
At this point, some young Americans may prefer sitting in their parents basements and getting government checks after 18 pandemic months. But is it really in their best interests for the government to continue encouraging them to live off what other people produce?
Wouldn’t it make more sense to encourage these individuals to reach their potential, achieve financial independence and earn the dignity and self-respect that come with a job? There was a time when both parties saw that as an honorable objective. President Bill Clinton and House Speaker Newt Gingrich made that notion an integral part of our welfare system.
Biden and the progressive wing of his party would reverse that policy. But government dependence is not the path out of poverty. It simply makes it permanent.
President Biden, if you want to lift people out of poverty, if you want better jobs numbers, if you want people to succeed and become self-reliant, please, stop the government spending spree!
It’s time we all got back to work.
Andy Puzder was chief executive officer of CKE Restaurants for more than 16 years, following a career as an attorney. He is currently a Senior Fellow at the Pepperdine University School of Public Policy. He was nominated by President Trump to serve as U.S. labor secretary. In 2011, Puzder co-authored "Job Creation: How It Really Works and Why Government Doesn't Understand It." His latest book is "The Capitalist Comeback: The Trump Boom and the Left's Plot to Stop It" (Center Street, April 24, 2018).