The mass media and the political opponents of the president’s tax cut have been trying to get the American people to ignore the falling unemployment rate. It’s easy to understand why: Last May President Bush fully implemented his tax cut, and since then the rate has rapidly dropped from 6.3 percent down to 5.6 percent, one of the quickest drops in history.
That’s great news, of course, for unemployed worker 5.61 through unemployed worker 6.30, but it’s very bad news for people who predicted the tax cuts would ruin the economy.
Here’s their tactic: “Yes, the unemployment rates are dropping, but that’s not because people have found jobs; it’s because people have given up looking for work.” It’s a perfect retort, except for one thing: The percentage of unemployed people who have given up looking for work is low, by historical standards, and has recently been dropping. We know this, because the Bureau of Labor Statistics, the same agency that counts the number of unemployed people, also counts the number of discouraged workers — or the number of people who have given up looking for work and say they have done so because they believe there is no appropriate work to be found.
Here’s what the BLS found: Only about a third of a percent of American workers are classified in the “discouraged” category. That’s right: Ninety-nine and two-thirds percent are not discouraged. This is hardly the teeming mass of employment despondency that we have been led to believe is out there.
More to the point, the percentage of unemployed people who have given up looking for work is lower than the average of the past 10 years (the period of time that this particular statistic has been tracked in this particular way). It’s also lower than the average for the 6 years of the Clinton administration during which discouraged worker-hood was tracked. Further, it is considerably lower than the three years available for Clinton’s first term, a period during which we are continually reminded that the nation enjoyed an economic boom.
In short, during the Bush Boom, unemployed workers have “given up looking for work” at a considerably lower rate than in times past. This, of course, makes perfect sense if you give it a moment’s thought: It’s during recessions that workers have reason to believe they should give up, not during periods of rapid expansion. But then again, that’s just common sense, which is a difficult thing to find in most of America’s newsrooms.
— Jerry Bowyer is a radio and television talk show host and the author of The Bush Boom. He can be reached through www.benadorassociates.com