February 3, 2017
Atlanta—Today, the Job Creators Network (JCN) highlighted that the February jobs report, released today by the Bureau of Labor Statistics, shows that a better than expected 227,000 jobs were created last month, and the unemployment rate remains low—but did jump from 4.7 to 4.8 percent. Although the report reveals positive, low numbers for the general unemployment rate, there is still a troubling trend in the labor force participation rate (LFPR) and broader measures of labor underutilization — driven by the over-regulation, over-taxation, and lack of access to credit for small businesses. President Trump and Congress need to address these issues immediately.
The report reveals a 62.9 LFPR, which is well below the pre-Great Recession historical average of 66 percent. The 3.1 percent gap indicates a disconnect between the general unemployment rate and the real unemployment rate that captures those workers who have dropped out of the labor force. The real unemployment rate when those who have dropped out of the labor force are factored in is 9.31 percent. As the public becomes more hopeful about the economic outlook, these discouraged workers will start entering the labor force once again—which will begin to close the gap between the general unemployment rate and the real unemployment rate.
Although some of the reduced LFPR may be due to natural cycles—such as baby boomers retiring or more millennials going to college—the LFPR of “prime-age” workers between the ages of 25 and 54 is also hovering near a generational low. In fact, the unemployment rate including part-time and marginally attached workers is 9.4 percent.
The low LFPR undertow in the labor market belies what seems to be a relatively healthy economy. In order to fully bring the labor market back, over-regulation, over-taxation, and lack of access to credit need to be addressed.
President Trump has already begun to face these challenges head-on. Not only has he nominated Labor Secretary Andy Puzder, who understands the true foundation of job creation, but on Monday he issued an executive order that reels in regulatory mandates. The order requires that the costs of any new regulations are balanced out by the removal of two old ones. However, President Trump cannot take on this fight alone—he needs the help of the new 115th Congress. Lawmakers in the House and Senate should work on passing legislation like last session’s Bring Small Businesses Tax Reform Act—which would reduce the tax rate for “pass-through” small businesses.
“The current low unemployment rate has brought with it a sense of optimism, but underneath the positive trend there are systematic problems in the labor market,” said Alfredo Ortiz, President and CEO of the Job Creators Network. “If Trump and the 115th Congress stand united with small businesses, the regulatory burden that is hindering job creation can be removed and the economy can roar back to life.”
The Job Creators Network (JCN) is the voice of Main Street and holds politicians
accountable to job creators and workers alike. For more information, please visit www.JobCreatorsNetwork.com.