The middle class real median household income in 2012 was less than it was at the end of the ’80s, and it’s down 9 percent from its high in 1999. The biggest portion of that decline, 8.3%, came in just the past five years.
One of the greatest factors adversely affecting median household income and net worth is the loss of jobs and extended unemployment. According to the Bureau of Labor Statistics (BLS) the Participation Rate, which is represented as a ratio or a percentage of the total population, is at the lowest levels in 50 years, with about 62.8% of the population working. According to the BLS U-6 data, 13% of the population is still unemployed or underemployed, and marginally attached to the labor market.
The job situation is directly effected by administration policies, and will not improve appreciably until the cost of doing business starts dropping. Last year the Small Business Administration reported that regulation costs American business $1.75 trillion per year, and costs small businesses as much as $10,585 per employee. Just the costs of Obamacare, Financial Regulatory Reform, and new EPA regulations, are projected to increase that cost per employee as much as 30%, according to Investor’s Business Daily.
In spite of the president’s consternation over income inequality, the income gap has increased exponentially under Obamanomics. As MSN Money declares, “The top one percent of Americans — those earning above $366,623 a year — have taken 81 percent of the fruits of the recovery. And the top 0.01 percent — earning about $8 million a year — took an astonishing 39 percent of the growth.”
Let’s look at the economy in general. The National Bureau of Economic Research officially scored the recession as ending in June, 2009, just five months after Obama’s inauguration. Historically, the nation has rebounded with significant growth coming out of a deep recession, but this has been the most tepid recovery in the last 100 years according to Forbes. They point out, “Under President Obama the American people have now suffered the worst 5 years since the Great Depression.”
Steve McCann of the American Thinker earlier this year wrote, “Instead what America got by year five was fewer jobs than before. Even though the employment age population has increased by nearly 12 million since January, 2008, there are now 3 million fewer Americans working, with employment declining from 146.3 million in January, 2008 to 143.3 million in December, 2012. If America enjoyed the same labor force participation rate as in 2008, the unemployment rate in December, 2012 would have been 11.4%, compared to 4.9% in December, 2007.”
Every one of these data are adversely affected by policies of the administration over the past six years. There have been precious few initiatives implemented that have facilitated free market principles in an attempt to augment economic expansion, job growth, or reduced fiscal burdens bourn increasingly by the middle class. Instead we’ve had nearly 550,000 pages of new regulation added to the Federal Register, and dozens of Executive Orders that have stymied the engine of capitalism that fuels the country.
The new Dow Jones Industrial Average record reached last week is good for investors, but belies the broad-based weakness in the general economy. With two years left of this administration that is so averse to free markets, a substantive and vibrant economic recovery will likely be elusive for the foreseeable future.
Associated Press award winning columnist Richard Larsen is President of Larsen Financial, a brokerage and financial planning firm in Pocatello, Idaho and is a graduate of Idaho State University with degrees in Political Science and History and coursework completed toward a Master’s in Public Administration. He can be reached at rlarsenen@cableone.net.
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