An economic handoff Trump better not fumble - By Jennifer Rubin

[DonViejo]

Jennifer Rubin writes the Right Turn blog for The Post, offering reported opinion from a conservative perspective. Follow @JRubinBlogger

The U.S. economy added 156,000 new jobs in December and wages ticked up. The unemployment rate inched up to 4.7 percent, but October and December numbers were adjusted upward. As one observer noted, “Donald Trump will be one of only two U.S. presidents in recent decades to inherit a jobless rate below 5%.”

The latest figures underscore how out of touch both parties and the president-elect are when they cry, “More jobs!” Economist Doug-Holtz-Eakin explains, “If we aren’t exactly at full employment, we are certainly in the neighborhood.” He argues therefor that “future growth has to come from supply side sources — capital investment, labor force growth, and productivity. The latter is the key to real wage growth as well. The proposed mix of tax and regulatory reform are strong steps in the right direction.”

We have argued that the key to supercharging the economy is productivity, something politicians rarely talk about because it makes it sound like Americans aren’t working hard; they are — too hard for the amount produced. They and their employers need the tools and resources to make more stuff, more cheaply (the definition of productivity). Then workers’ wages can go up (as the business sells more and increases revenue).

So why doesn’t it feel like good times if so few are unemployed? Matt McDonald, who served in the George W. Bush White House and now works as a consultant, tells me, “I think this is basically full employment, but the lag in wage growth makes people still feel grumpy.” Factor in rising health-care and college tuition costs and you have a lot of economic stress. Long-term unemployment decreased to 1.15 percent in December from 1.16 percent in November. That’s down compared to previous years. (“[The] Long Term Unemployment Rate in the United States averaged 1.78 percent from 2013 until 2016, reaching an all time high of 2.80 percent in June of 2013 and a record low of 1.15 percent in December of 2016.”) But, of course, many have stopped working or have found economic refuge on the disability rolls, which have skyrocketed to about 14 million people. (In some distressed areas, as many as 15 to 20 percent of workers receive disability benefits. To give you a sense of the enormity of the problem: “Between 1994 and 2014, the share of working-age adults receiving Social Security disability checks grew to 4.8 percent from 2.8 percent.”) If you are on disability, you’re not counted in the job statistics. In other words, we have a whole lot of people who are not working who could be. That, and the physical blight of many Rust Belt cities and towns, surely contributes to the perception that things are not going well economically. (Also, President-elect Trump keeps telling us the unemployment rate is “really” over 40 percent!)

more
https://www.washingtonpost.com/blogs/right-turn/wp/2017/01/06/an-economic-handoff-trump-better-not-fumble/?utm_term=.5c1022a6be9e&wpisrc=nl_popns&wpmm=1

[underpants]

1. My 2 cents - job growth will only come from higher wages

Increases in the minimum wage have always lead to income growth across the board, until now.

THAT and green technology and healthcare.

[guillaumeb]

2. Agreed.

70% of the GDP is composed or consumer spending. What increases the ability of consumers as a whole to spend increases the GDP. Tax cuts for the 1/10th of 1% do nothing because that portion of the populace saves more than they spend. Plus there are too few of them to produce a stimulative effect.