TOP 2 REASONS AMERICA’S JOB NUMBERS ARE IN FREE-FALL: ‘If you’re worth $7.50 an hour, no one’s going to pay you $15 an hour’


‘If you’re worth $7.50 an hour, no one’s going to pay you $15 an hour’

Economists were shocked Friday when the May jobs report showed only 38,000 jobs were created last month, and the former chief economist for the Labor Department says slow economic growth is dragging down hiring, thanks to excessive government regulations and the negative impact of minimum-wage increases around the country.

The 38,000 jobs were created in a month where experts thought 162,000 jobs would be created. Only 25,000 of those jobs were in the private sector. Even with the Verizon workers strike playing out, the number is dismal.

“Even if those had been counted, the amount would have been woefully low, only about 60,000 private-sector jobs. Employers, for whatever reason, decided they were cutting back, especially on low-skilled workers,” said Diana Furchtgott-Roth, who served as the top economist at the Department of Labor from 2003-2005. She is now a senior fellow at the Manhattan Institute and directs the Economics 21 program there.

She also told WND and Radio America there are very clear reasons employers are cutting back, starting with a sluggish economy.

“Job gains have been decreasing for seven or eight months in a row, ever since October,” Furchtgott-Roth said. “These are linked to slow GDP growth.”

She notes GDP grew just 0.8 percent in the first quarter of 2016. The two quarters before that showed 1.4 and two percent growth.

“If you have a steady decline in GDP growth for several months in a row, it is going to eventually pick up into employment,” Furchtgott-Roth said. “Employment is a lagging indicator. Employers don’t lay off as soon as they see a decline in demand because they want to see if it’s real and hiring new workers is difficult.”

Furchtgott-Roth said the data also show that low-skilled, poorly educated Americans are the ones suffering the most. She added that the push for a higher minimum wage is a disaster for those people.

“It’s primarily low-wage workers who are dropping out (of the labor force),” Furchtgott-Roth said. “There was practically no change for workers with a BA and above, which suggests that these increases in the minimum wage are having an effect. If you’re worth $7.50 an hour, no one’s going to pay you $15 an hour and you’re going to be left jobless.”

Another major issue grinding the gears of the economy is the ever-growing list of demands on employers from the federal government.

“What we’re seeing is this onslaught of regulations from the Labor Department,” Furchtgott-Roth said. “Regulations on who has to be paid overtime, regulations on whether a franchised employee is an employee of the franchise or an employee of the parent company, regulations on independent contractors.”

She cited another regulation as emblematic of the government’s invasive reach.

“There’s even a regulation that says if a company hires an attorney to advise on labor issues, the name of that attorney has to be made public,” Furchtgott-Roth said. “All those other attorneys’ clients and the amount paid to the labor lawyer by all these clients (must be disclosed). So with regulation after regulation coming back, it’s not surprising that companies are deciding that maybe less hiring is better than more.”

But while job creation slows down, wages also remain stagnant. Furchtgott-Roth said there is some misunderstanding here. While wages are not rising very much, total compensation is on the rise. The problem is, it doesn’t end up in Americans’ wallets.

“Wages are just one part of the compensation package,” Furchtgott-Roth said. “Employers often provide pensions, benefits, sick leave, maternity leave, health care. With these other kinds of benefits getting more expensive, the most notable is health care after Obamacare, something has to give. It’s often the cash wage.”

She said the frustration is compounded when employers spend more to provide health coverage to employees instead of raising wages only to leave employees with higher medical bills because of rapidly rising deductibles.

So what would trigger greater economic growth and lead to more job creation and higher wages? Furchtgott-Roth said several approaches are proven winners.

“The empirical evidence has just demonstrated that lowering taxes and lowering regulations would have the most effect,” she said. “If we can roll back some of these regulations on employers, they would be more likely to hire.

“If we could lower our top tax rate, our corporate tax rate, from 39 percent, which is the highest in the [Economic Organization for Co-operation and Development] to something like the OECD average or something below it – that’s 24 percent or lower – we would attract a lot more investment from abroad, and we would encourage companies to bring back earnings which right now are stuck offshore.”

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  • TheRepublicIsDead

    The 13,000 government jobs are not free market creations and do absolutely nothing to add to the economy. The 25,000 real economy jobs aren’t enough to pay for the bureaucracies 13,000

    • The 25,000 barely cover the new 18 year old plus workers entering the job market.

      • TheRepublicIsDead

        Overall its a huge negative. Around 200,000 older workers are retiring a month. Very bad. How do you like my new disqus name? I have zero optimism about the next 4.5 years.

  • What these adults making minimum wage do not understand, is that it is the liberals they vote for that keep them in minimum wage jobs. Now when these jobs go away due to automation because of the liberal greed, these people will have no job. This may be the slap to the head that wakes them up

    • TheRepublicIsDead

      Not at all. They will demand more government solutions to fix the problem.

      • There is not enough money to pass out, the middle class will revolt if more taxes are taken from them

        • TheRepublicIsDead

          Printing seems to be de riguer these days. The Ivy Leagues best are in charge though in the high courts, the fed, treasury and banking and anywhere else you bother to look in DC. Should be able to sort this mess out in a decade or two.

          • Those IVY league people are the problem, not the solution

          • TheRepublicIsDead

            95% of Academia really do think they know how to tend to your affairs better than you. Four notable exceptions that come immediately to mind are Nassim Taleb, Joseph Tainter, Antonin Scalia and James Rickards.

          • Very true. Very few Ivy League types can relate to society as a member, instead they see society as theirs to manipulate and loot from

          • TheRepublicIsDead

            Looting is a bennie. Most Tyrants REALLY do want to help us simple folk. Watch some of the Venezuela interviews. A good number of poor people still support Maduro. If it weren’t for the US all would be peachy.

    • MC : )

      A liberals greatest fear is an educated population.

      • Just look at the idiots supporting sanders and hillary, and your point is proven in spades

      • SoulSurvivor


        That DON’T play by their rules !!

  • Wow! That is a dismal report, but amazing how the ways to reverse this trend are well known and proven to be effective! But as long as Dems and do-nothing politicians are in power, nothing will be done except the continuation into fiscal madness.

    • Exactly, the dems work to destroy the jobs

      • SoulSurvivor

        Not for other countries

        • Very true, here in America the democrats work to turn people into being dependent on the government, hence being slaves to the leftist progressive elite

          • SoulSurvivor

            I showed you the Georgia Guidestones did not that’s the plan for the New World Order ?

            Just look it up real quick there’s all kinds of information on it, their tablets with Commandments and at the top of the list is keeping the Earth’s population under 500 million !!

            They’re just pure evil

          • Very evil. Look how over in Europe countries like Switzerland/Sweden are trying to pass laws where everyone gets $2500 a month, you can only do that with small populations. Make no mistake, the leftist progressive elite want a huge purge of the masses

          • SoulSurvivor

            Oh you just use the Socialists Communists favorite word.. PURGE !! I have a guy in New Zealand that I talk to, and he says they use it there all the time !

            I prefer the term flush.. after all that’s what you do with Commie CRAP !!

          • SoulSurvivor

            You realize what all this spying is for, all this signing up for programs, categorizing people ??

            Yeah they promised the world.. everything free in a Utopia !!

            But the plan is to eliminate most of the Earth’s population so the elite can benefit, the youth had been turned into indoctrinated obedient worker drones.. and old farts like me….. well you know !!

            California just legalized death with dignity.. how long do you think it will be before it forced, for the convenience of others ?

            They even made a movie to push the ideology that those that are weak or ill it’s more merciful to let them die !!

          • Nailed it again, yes we all agree people should not have to suffer when dying, but all death with dignity drives by the progressives mask their true eugenic purpose. These people are no better than the nazi doctors in the death camps

          • SoulSurvivor

            Except now they literally have Dr. Frankenstein’s Laboratory. They even spread their poison to the internet.. I’ll be honest with you reading all these stories I think causes brain damage !!
            I just found something interesting, I typed in a search do liberals really believe their lies ?

            You wouldn’t believe the amount of stories that came up saying why liberals lie !!

            Give it a try found some real interesting stuff

          • I know, liberals are some very evil people.

  • cordeg

    people pushing for raising their own minimum wage don’t realize they are only screwing themselves. if you are having trouble reaching the ceiling to screw in a light bulb, putting jacks in the basement to raise the ground floor isn’t going to help you in the long run, and in the short run its simply going to put you out of work.

    back in the midst of the 2014 election cycle, the Florida Today newspaper joined many other major daily papers around the country in “helpfully” explaining to voters that raising the “minimum wage” would “only” cost 500,000 jobs, but would also raise 900,000 Americans above poverty. President Obama and Democratic politicians were pleased at this surprise (not!) support from journalists, and provided timely quotes for the articles noting that job losses would be “offset” overall by this increase, asserting it was “wrong to focus on lost jobs” because the reduction in poverty is a “net gain” for Americans on average. they multiplied the raise then being debated by 900,000 to claim $5B in extra income to working Americans.

    who could find fault with that? someone who just wanted people to stay poor, no doubt!

    no doubt. alas, this position might have been reasonable, if only life were lived “on average” or by groups, but life is in fact lived by individuals. and here in the real world, Democrats were proposing — by their OWN EXPLICIT ADMISSION that 900,000 individual Americans should have their incomes raised by a few thousand dollars in exchange for the ELIMINATION of the ENTIRE INCOME of 500,000 of their fellow citizens. based on even the low-end of the incomes of workers in the income ranges to be affected, this over $7B loss negated the “extra” income touted by Democrats — AND THEN SOME. but, of course, those who lost their jobs as a result of the increase would no longer be counted among “working Americans”, so they could rightly claim that the incomes of “working Americans” were improved, even as the rolls of those “out of the workforce” rose again. in fact, this proposal demonstrated that the REAL “minimum wage” is NOT $7.25/hr, but rather $ZERO/hr — the wage to which the Democrats’ proposal would doom some 500,000 Americans.

    Democrats claim Republican opposition to minimum wage increases proves they “don’t care
    about working class Americans”, but such proposals merely seek to “care about” ONE group of Americans at the expense of ANOTHER. it’s unlikely those 500,000 Americans — unemployed and FINANCIALLY RUINED by the proposed increase – would find solace in knowing their TOTAL LOSS provided a marginal gain to SOMEONE ELSE. hey, they should just shut up and learn to take one for the team!

    the Democratic Party’s motto: “Picking the Winners and Losers in America through Arbitrary Political Whim for Over 200 Years!”