The biggest story in America that hardly anyone talks about continues. Workers’ real wages and living standards are declining.
Real wages fell 3.3% from last year, according to today’s employment report.Americans are getting poorer by the day with President Joe Biden and Congressional Democrats at the helm — A stark contrast to the strong wage gains they enjoyed during the Trump administration. This embarrassing trend is an aversion to Americans’ birthright to continue to improve their quality of life. I have to cover this Labor Day weekend.
As usual, the White House pretended the labor market was doing great, pointing to slowing top-line job creation last month and the unemployment rate rising to 3.7%. But these figures overlook a decline in labor force participation. The labor force participation rate is still one percentage point below its pre-pandemic peak and only returned to March 2022 levels last month. (Related: SHEFFIELD: Biden blames others for his failures, but America’s economy continues to plummet)
Applying pre-pandemic labor force participation rates to today’s working-age population shows that there are 2.7 million fewer Americans in the workforce. If these labor force bystanders were considered unemployed, the unemployment rate would be about 40% higher than the current unemployment rate suggests.
In addition to misleading coverage of Biden’s “strong” labor market, the mainstream media will be flooded with editorials defending the Democrats’ counterproductive labor policy proposals this Labor Day long weekend. These include a $15 federal minimum wage, cuts to independent contracts, and increased unionization through unfair PRO law policies such as card checks.
Little or no mention will be made of the overriding issues that dominate the debates at the kitchen table and backyard barbecue this weekend.
To contain runaway inflation, raise real wages and lift the economy out of recession, policymakers must work to revitalize the small business economy. More new and expanding businesses drive down prices and increase the supply of goods and services needed to fuel wages and economic growth.
Unfortunately, policy makers are working towards this goal with different aims. Last week, the Biden administration announced a student loan bailout that would inject nearly $1 trillion into the economy, fueling inflationary fires. We are considering legal options to prevent
Congress recently passed a misnamed Inflation Reduction Act that doubles the size of the Internal Revenue Service to tax small businesses and harass audits. The bipartisan Joint Taxation Commission estimates that most of the bill’s tax revenue will be paid indirectly by people making less than $400,000 a year, who are the primary customers of small businesses. .
And Federal Reserve Chairman Jerome Powell seems utterly ignorant about the importance of fiscal policy in keeping inflation under control. In his remarks last week in Jackson Hole, Wyoming, he didn’t even mention how economic growth, reckless government spending, tax increases and energy policies would affect inflation.
Powell, Congress, and the Biden administration must think beyond crude rate hikes to combat inflation. Higher interest rates make access to credit more expensive, hurting small businesses.
Even Powell told companies to prepare for “some pain” ahead. To keep inflation in check without exacerbating the ongoing recession, Congress and the Biden administration must come up with smart, small business-friendly fiscal policy solutions.
Step 1: Shelve student loan inflation relief. Step 2: Make permanent small business tax cuts under the Tax Cuts and Jobs Act. Its immediate expense provision, which allows small businesses to fully write off all purchases, expires at the end of the year. A new analysis by the Tax Foundation concludes that immediate spending increases economic growth, capital formation and employment. This is exactly what the economy needs right now.
Don’t hold your breath. Never before has there been such a gap between the issues faced by ordinary Americans and those addressed by Congress and the mainstream media.
Alfredo Ortiz is President and CEO of Job Creators Network.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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