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"...The state of our economy is strong." President Joe Biden said on February 3rd during a pre-State of The Union press briefing.
The President went on to clumsily brag about record unemployment rates and job growth. "We learned this morning that the economy has created 517,000 jobs just last month — more than half a million jobs in just the month of January."
He continued, "We also learned that the unemployment rate fell to 3.4 percent — 3.4 percent. That’s the lowest in 54 years."
Isn't this good news for the economy? Isn't record unemployment a positive trend? Is job growth a good thing?
The answer is multifaceted, but I believe, with some proper economic reasoning, we can easily unpack it.
As always, in economics, it is important to consider all of the ways a certain economic occurrence or phenomenon is caused, who and what it affects, how it affects them, and how long it will affect them.
This is a very important principle in economics.
It is something that is not practiced by the United States government. For example, the U.S. has been utilizing Modern Monetary Policy, a policy which discards and ignores the long-term effect of printing currency to relieve the government of its dept. This policy is then used to justify inordinate amounts of government spending.
If we were to look at the situation one-dimensionally, we could arrive at the conclusion that record-low unemployment is a positive trend. After all, if there were a large amount of working-class Americans who couldn't find jobs, that would signify a weak and failing economy.
However, if we stop to consider why unemployment is at a record low and people are taking new jobs by the millions, the data tells a different story.
Has the White House stopped to consider or acknowledge why a record number of people need to be out looking for jobs?
Asking the Crucial Question: What About The Impact of Inflation?
According to a Blue Job Crew survey of more than 1000 professionals from ranging backgrounds, "72% said inflation has impacted the way they view their job and 57% said they have sought out new or additional roles over the past year due to the rising cost of living.
Half of all respondents said they actively seek out additional work seasonally (e.g. picking up extra shifts around the holidays).
65% said that they foresee themselves looking for new opportunities in the coming months and into 2023 to continue to combat rising inflation."
the Bureau of Labor Statistics reported that "The unemployment rate for teenagers (ages 16 to 19) was 9.6 percent in July 2021, following rates of 9.9 percent in June and 9.6 percent in May. The last time the unemployment rate for teenagers was lower than 9.6 percent was in November 1953, when it was 8.6 percent."
Dishonesty from the Chief Instigators of Inflation
Something Joe Biden and the White House have yet to acknowledge is the reason for a record number of Americans, even high school-aged teens, seeking employment.
In fact, the key factor in this trend is not economic stability but record-high inflation. Ever since the Biden administration took office, government spending along with inflation has skyrocketed, and Americans are feeling it in their wallets.
Food is more expensive, gas is more expensive, housing is more expensive, and even the recreational activities that teens usually enjoy have become unaffordable for them unless they take time away from school and family obligations and enter the workforce.
It is important the remember that the most economically unstable countries in the world have the lowest unemployment. Take Arabia, for example, a desert country full of nomads and shepherds. Henry Hazlitt, the great 20th-century economist, argued that the unemployment rate in Arabia is 0%! Mostly because if you are unemployed, you are dead.
He argued that there is a healthy rate of unemployment. We want people to be able to retire, and for those in school to be able to focus on and afford their studies. This is the mark of a truly healthy economy.
After briefly considering why people are seeking employment in record numbers, the words of our commander-in-chief might resonate in a slightly different way.
"Add that all up, it means we created 12 million — 12 million jobs since I took office. That means we have created more jobs in two years than any presidential term, than any time, in two years." said the President.
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