Another Month of Data Re-Confirms Obama’s Horrible Record on Jobs – Daniel J. Mitchell – Townhall Finance Conservative Columnists and Financial Commentary

Another Month of Data Re-Confirms Obama’s Horrible Record on Jobs – Daniel J. Mitchell – Townhall Finance Conservative Columnists and Financial Commentary.

Remember back in 2009, when President Obama and his team told us that we needed to squander $800 billion on a so-called stimulus package.

The crowd in Washington was quite confident that Keynesian spending was going to save the day, even though similar efforts had failed for Hoover and Roosevelt in the 1930s, for Japan in the 1990s, and for Bush in 2008.

Nonetheless, we were assured that Obama’s stimulus was needed to keep unemployment from rising above 8 percent.

Well, that claim turned out to be quite hollow. Not that we needed additional evidence, but the new numbers from the Labor Department re-confirm that the White House prediction was wildly inaccurate. The 8.2 percent unemployment rate is 2.5 percentage points above the Administration’s prediction.

Defenders of the Obama Administration sometimes respond by saying that the downturn was more serious than anyone predicted. That’s a legitimate assertion, so I don’t put too much blame the White House for the initial spike in joblessness.

But I do blame them for the fact that the labor market has remained weak for a lengthy period. This chart, which I just generated this morning on the Minneapolis Fed’s interactive website, shows employment data for all the post-World War II recessions.

The current business cycle is the red line. As you can see, some recessions were deeper in the beginning and some were more mild. But the one thing that is unambiguous is that we’ve never had a jobs recovery as anemic as the one we’re experiencing today.

Job creation has been extraordinarily weak. Indeed, the 8.2 percent unemployment rate actually masks the bad news since it doesn’t capture all the people who have given up and dropped out of the labor force.

By the way, I don’t think the so-called stimulus is the main cause of today’s poor employment data. The vast majority of that money was pissed away in 2009, 2010, and 2011.

Today’s weak job market is affected by things such as the threat of higher taxes in 2013 (when the 2001 and 2003 tax cuts are scheduled to expire), the costly impact of Obamacare, and the harsh regulatory environment. This cartoon shows, in an amusing fashion, the impact of these policies on entrepreneurs and investors.

P.S. Click on this link if you want to compare Obamanomics and Reaganomics. The difference is astounding.

P.P.S. Obama will probably continue to blame “headwinds” for the dismal job numbers, so this cartoon is definitely worth sharing.

P.P.P.S. Since I’m sharing cartoons, I can’t resist recycling this classic about Keynesian stimulus.

It’s the Government, Stupid – Tea Party Nation

It’s the Government, Stupid – Tea Party Nation.

By Alan Caruba

The political pundits all agree that the November elections will be all about the economy. I suspect that most Americans draw their conclusions about the economy from empirical observations such as whether they or someone they know is out of work, whether shops in their communities are closing, and the price of gasoline at the pump.

While the economy is covered by the business media, newspapers, magazines, and cable channels, it tends to get short-shrift in the mainstream media because there well may be a shortage of reporters who actually understand economic trends beyond the very obvious.

For the record, I am not an economist and did not inherit the arithmetic gene from my late father, a CPA. Instead I have made my way with whatever skills I have as a writer. Suffice to say, I am still working to pay the rent. My interest in the economy is personal.

It’s personal for those without a job. A May 3 report by CNN Money, “The 86 Million Invisible Unemployed” said, “There are far more jobless people in America than you might think.” This is a good reason why you should ignore the government statistical reports on unemployment. They are rigged.

As the CNN report noted, “While it’s true that the unemployment rate is falling, that doesn’t include the millions of non-working adults who aren’t even looking for a job anymore. And hiring isn’t strong enough to keep up with population growth.”

“A person is counted as part of the labor force if they have a job or have looked for one in the last four weeks. Only about 64% of Americans over the age of 16 currently fall into that category, according to the Labor Department. That’s the lowest labor force participation rate since 1984.”

An April 28 Wall Street Journal editorial, “The Growth Deficit”, took note of the fact that “The weakest recovery on record continued in 2012’s first quarter, with the Commerce Department’s Friday report of 2.2% growth.” Despite the official government view that the recession officially ended in 2009, the “quarterly growth has average 2.4%, That’s slower growth than in every modern expansion, and about half the growth rate of all recoveries since World War Two, according to Congress’s Joint Economic Committee.”

A recent poll commissioned by Generation Opportunity, a non-profit think tank that concerns itself with young Americans, found that “just 31% of 18-29-year-olds approve of Obama’s handling of youth unemployment while 69% say the current leadership in Washington fails to reflect the interests of the younger generation.” That is very bad news for Obama and, if they vote, very good news for Romney.

The current issue of Business Week has an article, “The Stuck-in-the-Middle Recovery” asks “What if the economy comes back but leaves millions of middle-class Americans behind?” noting that “Ninety-five percent (95%) of the net job losses during the recession were in middle-skill occupations such as office workers, bank tellers, and machine operators, according to research by economists Nir Jaimovich of Duke University and Henry Siu of the University of British Columbia.”

Calling it the Great Recession to differentiate it from the 1930’s Great Depression, Business Week reported that “employers aren’t about to go back to their larger, less efficient workforces. Even with 5.2 million fewer Americans employed than in January 2008, the U.S. is turning out more goods and services than before the recession, one reason corporate profits have hit record levels.” All the wonderful technology that has put iphones and other gadgets in our hands has also eliminated millions of jobs.

For three-and-a-half years Americans have listened to President Obama blame the economy on George W. Bush and that excuse is not working anymore.

A few statistics tell the real story. Since his inauguration in 2009, the average retail price of a gallon of gas has gone from $1.83 to $3.44, an increase of 84%! That’s what happens when the government virtually shuts down all exploration and extraction of oil on federal land.

The number of unemployed went from 11,616,000 in 2009 to 14,485,000, an increase of 24%. Those receiving unemployment benefits rose 22.2%. The number of long-term unemployed increased 146%!

The national debt increased 32.2% and continues to increase on a weekly basis while the amount of government waste of taxpayer’s money is staggering. For example, Washington spends $25 billion annually to maintain unused or vacant federal properties. Duplication of programs, as tracked by the Government Accountability Office (GAO) notes 342 programs economic development programs, 130 programs serving at-risk youth, 90 early childhood development programs, 75 programs funding international education, cultural and training exchange activities, and 72 safe water programs.

Suffice to say the full list of wasted dollars is staggering.

Perhaps the worst outtake from these statistics and facts is the way President Obama continues to hold onto the belief that government spending—the failed stimulus, “investments” in renewable energy, et cetera—is the way to turn the economy around.

Waiting for all Americans in 2013 is the advent of “Taxamageddon”, a combined 34 percent (34%) increase in taxes resulting from the expiration of existing tax policies and the imposition of new ones.

In 2009, Obama said of his plans to turn around the economy, “If I don’t have this done in three years, then there’s going to be a one-term proposition.” It’s up to the voters to make that come true.

© Alan Caruba, 2012

Lies, damn lies and unemployment rates. – Tea Party Nation

Lies, damn lies and unemployment rates. – Tea Party Nation.

Posted by Judson Phillips

The unemployment rate has fallen.  This was as predictable as the sun rising or tomorrow being Saturday. 

 Not only did the unemployment rate dip this month, in the next few months you will see even more dips, pushing it down towards 7% by November.

 Why is this so predictable?  What does it mean and what is really going on?

 Why is this predictable?

 It is simple.  The Obama Regime is cooking the books.  No President in the modern era has been reelected with unemployment over 7.1%.   The drive by media is ecstatic.  They are thrilled.  Obama will not be reelected with unemployment at 8.1%.   However, if he can cook the books so the rate shows under 7.5% by November, he has a chance. 

 The rate is just a number.  If you incorporate the entire population into the calculation, you get one number.  If you only include certain populations, you get a better result.  If you are the Obama Regime, you do not include the populations that make the unemployment rates go up.

 If you want a true indicator of the economy, look at the number of people in the labor force.  The number of people not in the workforce has shot to over 88 million.  This is not only the highest number of people not in the workforce since 1981, it is the highest number ever recorded.  Labor force participation, the percentage of Americans who are actually working dropped to 64.3%.

 This is the true state of the American economy.  Things have not been this bleak since 1981.  Thanks to the Obama, Pelosi, Reid axis of fiscal evil, 30 years of economic growth has been wiped out.

 If we calculated unemployment the way it was calculated during the Great Depression, unemployment would be 17%.   In 1931, in the middle of the Great Depression, unemployment was at 15%!

 This is the Great Obama Depression.

 Today, Obama said, “After the worst economic crisis since the Great Depression, our businesses have now created more than 4.2 million jobs over the last 26 months (and) more than one million jobs in the last six months alone.”

 It says a lot that the media will not call Obama on this.  Let’s look at some facts.  In January 2007, when the Democrats took control of Congress, the unemployment rate was 4.6%.

 In 2007, the number of people not in the workforce was only 79 million.  In short, under Obama almost 9 million Americans have fled the workforce.  They have abandoned work.

 Can anyone imagine what things will be like after four more years of Obama?

 What ever else we can say about Mitt Romney, he can’t do any worse than Obama and might do better.

 If we give Obama four more years, America will have gone from the world’s economic super power to a third world bankrupt economy.

 We cannot allow this to happen.

Alabama Tackled Illegal Immigration and Unemployment Started Dropping – Gina Loudon – Townhall Conservative Columnists

Alabama Tackled Illegal Immigration and Unemployment Started Dropping – Gina Loudon – Townhall Conservative Columnists.

Alabama politicians ran on the issue of reforming illegal immigration in the state, mostly in response to an outcry from citizens hurt or unemployed by the problem of Illegal Immigration. 

They kept their promise. 

Last session, the Alabama Legislature led by Senator Scott Beason (R-Gardendale) sponsored and passed House Bill 56 that essentially upheld the federal law already on the books.  Governor Bentley signed the bill.  The beast was loosed…

National social welfare advocates descended on Alabama like vultures on road kill and the stage was set for an ugly battle.  Self identified “religious groups” (whose faux religion is social liberalism) scared the “bejesus” out of unsuspecting (and under-informed) religious leaders who fell for the threats of arrest and worse if they were to comply with Alabama’s new law.  The main stream media, from NBC to Al-Jazeera, was more than happy to do the heavy lifting for the so-called religious groups opposing the bill.  Cries of racism, bigotry, and mayhem resonated with those who are generally susceptible to such rhetoric. 

Patriots rallied for the rule of law and held the politicians’ feet to the fire.  Speakers at the rally included mothers of Hispanic babies, victims of crimes of illegal immigration, and those exploited by the failed permissive policy on immigration.  Politicians, especially Alabama Senators, listened to the people, and stood firm on their promise to keep the law in place that upholds the rule of law.

The Department of Justice sued, but the bill was upheld in court.  

Immediately after the bill (HB 56) was passed, the unemployment rate began to drop.  Since the bill passed last legislative session, in some counties, unemployment has dropped dramatically. For example, unemployment has gone from 10%-6.9% in the former illegal immigrant hotbed of Marshall County, Alabama.

But social liberals don’t tire easily.  Fueled by the throngs of union-funded Occupiers, those opposed to the rule of law threatened that the crops would rot in the fields, because no legal workers would work under the conditions and for the pay that the illegal immigrants would.  

But they were wrong. 

In fact, Alabamians were starving for jobs and the supply was choked by a massive influx of illegals who swallowed up the jobs as they came available.  Legal Alabamians stood in line for blocks at job fairs hoping for their turn to work the job previously dominated by illegals. 

It worked.  Alabama went back to work.

Further, the same patriots who held the politicians’ feet to the fire with their rallies, local talk, and blogs, protected employees under the law, while the opposition supported the contention that people, any people, should sweat in the fields, with no protection from standard employment  law, or fair wages. In essense, we did the job that the unions wouldn’t do.   

Liberals had to face the irony and hypocrisy of their dichotomy that what they supported was a permanent underclass without the rights all men should enjoy. While conservatives championed the positive economic impact as the heavy social welfare burdens began to ease, the crowded emergency rooms thinned, and unemployment continued to drop. 

“In the last three months alone, we’ve seen an unprecedented drop of 1.7 percentage points,” said Alabama Republican Gov. Robert Bentley in a January 20 statement.

Alabama House Majority Leader Rep. Micky Hammon (R-Decatur) said the law is replacing illegal immigrant labor with Alabamians.

“Despite how desperately illegal immigrant sympathizers have tried to portray this law as somehow harmful to our state’s economy, the truth is more Alabamians are working today thanks in part to our decision to crack down on illegal immigration.”

Alabama’s unemployment rate has shrunk and they have added 35,400 new jobs since January of 2011. 

Other states should take notice.

EDITORIAL: Note to Obama: Unemployment is up – Washington Times

EDITORIAL: Note to Obama: Unemployment is up – Washington Times.

The real U.S. jobless rate is 15 percent

The Obama administration keeps reporting supposed good news on the employment front. Americans sense that something is not quite right about the rosy official numbers, and a series of independent reports confirms their skepticism.

On Feb. 16, the Congressional Budget Office (CBO) released a report on long-term unemployment showing that the past three years have witnessed “the longest stretch of high unemployment in this country since the Great Depression.” The report observes that if the underemployed had not been excluded from official statistics, “the unemployment rate in January 2012 would have been about 15 percent.” The “share of unemployed people looking for work for more than six months,” i.e. the long-term unemployed, has been above 40 percent since December 2009, the highest level since these data have been collected.

One reason for the persistence of long-term unemployment is that people are eligible for unemployment benefits far longer than before the recession. White House senior adviser Valerie Jarrett helpfully reminded America that the Obama administration sees this as a net positive. “People who receive that unemployment check go out and spend it and help stimulate the economy, so that’s healthy as well,” she said Tuesday. Having record numbers of Americans on food stamps is also a form of economic stimulus, according to Secretary of Agriculture Thomas J. Vilsack. The administration is trying to make a virtue of these grim economic necessities.

Those who run out their unemployment benefits are increasingly seeking other forms of “stimulus.” A new report from JPMorgan Chase shows that Social Security disability claims have risen to a record $200 billion a year, with 5.3 percent of the working-age population claiming some form of federal disability payment. Mental-illness claims have particularly increased, which is a metric the White House would rather ignore.

The most sobering reality check comes from Gallup, which reports a daily, non-seasonally-adjusted 30-day rolling average unemployment figure. Lately, these numbers have not been telling a story the White House wants to hear. The official, adjusted numbers show monthly declines in unemployment from 9.1 percent in August 2011 to 8.3 percent in January 2012. However, the Gallup daily figures show unemployment dropping from 9 percent in mid-August to 8.2 percent at the end of October, floating up to 8.7 percent in November, dropping to 8.2 percent in early January and then pushing back up to 9 percent in the past five weeks. Gallup’s measure of underemployment has been tracking generally upward since August, from 17.5 percent to around 19 percent.

One reason for the disconnect between official and independent statistics is that the Labor Department has been gradually trimming the percentage of people it counts as officially part of the labor force. This number has shrunk from 65.7 percent to 63.7 percent since Mr. Obama took office. So while earlier this month the White House highlighted the news that January payrolls had risen by 243,000, the Bureau of Labor Statistics quietly dropped 1.2 million from the calculated workforce. Ejecting people from the labor pool makes it easy for the Obama administration to keep reporting favorable unemployment numbers. The food-stamp nation knows better.

EDITORIAL: Obama cooks the unemployment books – Washington Times

EDITORIAL: Obama cooks the unemployment books – Washington Times.

Don’t believe bureaucrats, unemployment is really 11.4 percent

The White House has trumpeted recent rosy employment figures, but in their guts Americans know things aren’t getting better. They should trust their instincts.

Jobs are the No. 1 issue going into the 2012 election, which makes the unemployment rate a particularly important indicator. Lately, the trend seems to be favoring the White House. The December unemployment numbers showed a drop to 8.5 percent, down 0.2 percent from the previous month and over half a percentage point from August. In the “jobless recovery,” small moves like that take on outsized significance.

According to the Bureau of Labor Statistics, in the last 12 months, a net of 1.5 million more Americans found work. This sounds like good news, but the civilian non-institutional worker population increased by 1.7 million over the same period, and the raw percentage of Americans working has basically flatlined at 58.5 percent. To the extent there are new jobs, it has more to do with the fact that there are more people creating more demand, not with any fundamental expansion in the economy.

This raises the question why the unemployment rate continues to improve. The answer is that the “official” workforce is shrinking. Only those working or actively seeking employment “count” in the unemployment statistics. The discouraged, the dropouts and those who don’t even bother trying to find work aren’t included in the official unemployment rate. The 30-year average participation rate – that is, the percentage of Americans in the workforce – is 65.8 percent. During the last three years, this number has fallen sharply to around 64 percent. While the potential worker population rose last year by 1.7 million, the official workforce only went up 275,000. Counting like that makes it easier to report better employment numbers.

An analysis posted last week at the Zero Hedge website looked at what the unemployment picture would be if participation rates were held steady. Using more realistic long-term average participation rates, the study calculated a current unemployment rate of 11.4 percent. While the Obama administration’s numbers keep getting better, rates based on long-term participation do not. Factor in the number of Americans who hold down two or three jobs just to get by, and those who are chronically underemployed make the picture even grimmer.

It’s twisted that President Obama benefits from a flawed formula that generates a positive outcome when frustrated potential workers simply give up. This is what passes for progress in the jobless economy. A lower official unemployment statistic makes a good headline and a good talking point, but it would be better if more Americans were actually finding good jobs. The Zero Hedge analysis notes that by extending the logic of reporting progressively fewer labor-force participants, “America will officially have no unemployed when the Labor Force Participation rate hits 58.5 percent, which should be just before the presidential election.” Sounds like excellent timing, which exposes what the government statistics are intended to do: Get Barack re-elected.

The Washington Times

Economics for dummies – Tea Party Nation


Cover of "Economics For Dummies"

Cover of Economics For Dummies

Economics for dummies – Tea Party Nation.

Posted by Judson Phillips on December 16, 2011

A few days ago, Congressman Barbara Lee, from where else but California, was on MSNBC claiming it was imperative that unemployment benefits be extended for an additional 14 weeks.  They already are at 99 weeks. 

 A day earlier, I had stopped at restaurant for lunch.  Sometimes voice carry in places and the people next to me were talking loud enough I could easily hear the discussion. 

 There were two people there, a man and a woman.  The woman said her unemployment benefits were running out and she was hoping Congress would extend them.  If not, she said, she would have to go out and get a job paying $7 or $8 an hour until she could get a real job.

 I have no idea what this woman normally does for a living, but right now, she is taking a two-year vacation at taxpayer expense. 

 The unemployment fiasco is just another indication that liberals have absolutely no clue about economics.   Of course, why learn when you can be a liberal and the drive by media never calls you on your stupidity.

 Any economist, perhaps even one as absolutely brain dead as Paul Krugman, will tell you that anytime you subsidize something you get more of it. 

 If you subsidize beans, you get more beans.  Subsidize corn and you get more of it.  Subsidize more unemployment and you get more unemployment. 

 Let’s take our unknown diner for example.   She may not make as much money collecting unemployment as she would if she were working, but the difference for her is not enough to make want to go out and get a job.  So she remains one of the 14 million unemployed Americans.  

 Ms. Unknown Diner apparently believes she could easily go and get a job but the pay difference is just not enough to move her out of the unemployment line.

 I had heard of stories like Ms. Unknown Diner but had never I had never dealt with anyone personally who was milking unemployment just to have a paid vacation.

 Not everyone who is drawing unemployment is mooching off the system.  Many people who are freshly laid off thanks to the great Obama depression certainly need the money.   Unfortunately, there are many out there who are just using lengthy unemployment benefits as an excuse for some paid vacation.

 The good news is because the Democrats are so clueless on economics; they will be the victims of their own policies.   As long as the Democrats keep subsidizing unemployment, we are going to keep getting unemployment. 

 As long as unemployment is north of 9%, Obama can pretty much kiss his reelection good bye.

EDITORIAL: Create jobs by cutting red tape – Washington Times


Obama Double Speak

EDITORIAL: Create jobs by cutting red tape – Washington Times.

Radical reform is needed to improve the dire unemployment situation

Finally some positive economic news: The official unemployment rate dropped one-tenth of a point to 9 percent. It would be cause for celebration, except the gains are far too modest to make any serious dent in the problem of joblessness in America.

There’s even less cause for optimism after considering the figures are for October, when seasonal hiring begins to inch up in anticipation of the holiday season. Sure enough, much of the increased employment is found in the service and hospitality industries, according to the Bureau of Labor Statistics (BLS). Anecdotal evidence suggests that in many cases when people lose jobs and are re-hired, they accept pay cuts. This is consistent with the broad data trends which show that wages and salaries grew only 0.3 percent in the last three months, using BLS numbers.

The third-quarter boost in gross domestic product (GDP) and the quasi-positive job numbers are keeping a double-dip recession at bay. It’s a sign of how far behind this country has fallen to rejoice with such low expectations. As of today, some 13.9 million Americans remain in the ranks of the officially unemployed, of which 5.9 million are considered to be long-term unemployed. A 2.5 percent growth rate is not sufficient to expand the economy enough to accommodate these lost millions. It’s also not enough to fund the staggering budget deficits coming out of Washington.

Nor is the American Jobs Act proposed by President Obama a solution. A new study by the Phoenix Center in Washington crunches some 50 years of data to conclude the regulatory burden imposed by the federal government has a severely adverse impact on private-sector GDP and job creation. Using sophisticated econometric techniques, the authors determined that a 5 percent reduction in regulatory burden – a small $2.8 billion cut – could result in an increase of $75 billion in private-sector GDP, freeing these companies to create 1.2 million productive jobs.

The effect works both ways. Increases in government regulatory burden cost the economy private-sector jobs. So Mr. Obama’s stimulus scheme, which is designed to create a lot of government jobs, would have a negative impact on private-sector employment. The authors provide a concrete example in terms of the new Consumer Finance Protection Bureau (CFPB), which has a budget of at least $500 million. Their simulation, assuming the CFPB will employ 2,200 bureaucrats, concluded that its regulatory toll would destroy 238,000 jobs per year in the private economy. That’s exactly the opposite of what America needs right now.

These results are consistent, at least in terms of direction, with a study from the Small Business Administration last year which found that economic regulation imposed a significant burden on businesses, and a disproportionately large burden on small businesses, which are the engine of job creation in the economy. If Congress and the Obama administration are serious about creating jobs, they need to start looking at ways of really reducing the regulatory burden – and implementing those cuts in red tape – now.

America will never escape the 9 percent unemployment trap if we only improve by a tenth here and a tenth there. The president tried government stimulus and it was a massive failure. Regulatory reform will give this economy the boost it desperately needs.

Blame Obamacare for unemployment |

Blame Obamacare for unemployment |

For two years, I’ve been watching the talking heads discuss unemployment problems. The unemployment numbers began to rise about the time liberal Democrats passed the health care program. What no one’s talking about is that this health care program is the reason our economy hasn’t turned around.

There are other factors, but employers are looking at the extra cost and penalties to insure employees. It was pushed through so quickly no one read it before the vote. Employers’ future expenses are unknown so they lay off workers and won’t hire new employees until they know the “rules.”

Example: Say I have 450 employees. As this plan becomes law, I’ll have to lay off 50 employees and use their salaries to pay the health care coverage for the remaining employees. I’ll be required to pay the health care premiums for these laid-off employees until they find jobs. Depending on business classification, which is determined by the program’s own regulatory board, coverage for a laid-off employee could last 18 months. This for an employee who is not helping my company make a profit. Does this make sense, sending 50 workers to the unemployment lines?

Liberals tell small businessmen “Raise prices to cover the expense!” Businessmen can’t do that; there’s no money moving in the economy for the unemployed to use. They can’t pay current prices.

Just watch, as 2014 gets closer unemployment will rise steadily and spike just before the program is fully enforced.

Tom Fisher, Oklahoma City

Fisher has been a small-business owner for 35 years.

Morning Bell:A Jobless Labor Day – The Foundry

Morning Bell:A Jobless Labor Day. – The Foundry

Mike Brownfield

Job seekers talk to employers at a south Los Angeles job fair.

Job-seekers (L) talk to employers (R) during an outdoor job fair at the Crenshaw Christian Center in South Los Angeles August. 31, 2011.

For 14 million unemployed Americans and their families, this Labor Day will not be a happy one. Instead of enjoying a day off of work, they’re suffering a disturbing trend under the Obama economy: Jobs are not being created, the unemployment rate has not improved, and the economy is at a near standstill. Even worse, the labor market’s stall might be turning into a decline.

And today, in Detroit—which in July had the highest unemployment rate of any metropolitan area in the country—President Obama is due to stand with labor presidents including the AFL-CIO’s Richard Trumka, Teamsters’ James P. Hoffa, and the UAW’s Bob King to tout his bailout of the auto industry and his yet-to-be-disclosed plan to turn the economy around.

The Big Labor backdrop is ironic but not surprising. The union movement has helped lead to the staggering loss of manufacturing jobs in the United States, and the demands it has made on employers and governments help create the very conditions leading to the tragic unemployment in Detroit and across the country. But they are strong political allies of the President—having spent $1.1 billion on politics and lobbying in the last election cycle—and they continue to hold a prominent seat at the table.

It follows, then, that President Obama continues to put the institutional interests of unions ahead of America’s economic well-being. In a new paper, Heritage’s Rea Hederman and James Sherk explain that the latest example comes from the National Labor Relations Board (NLRB), which issued several rulings recently undermining employer and employee rights: snap elections, restricting secret ballot elections, and a new rule that allows unions to cherry-pick which workers get to vote on unionizing. All these rules are designed to facilitate organizing companies whose workers are unenthusiastic about unions.

Private-sector workers have a right to unionize, of course. Management gets the union it deserves. But unionization has economic costs, as Sherk and Hederman write:

Unions make businesses less competitive and discourage investment. This reduces job growth. Studies show that jobs fall by 5–10 percent at newly organized firms. Going forward, employment grows by three to four percentage points more slowly at unionized businesses than at otherwise identical non-union companies.

The result can be felt in places like the Motor City as unionized manufacturing employment plummets. Since 2005, GM shed half of its unionized workforce. Nationwide, unionized manufacturing employment fell by 80 percent between 1977 and 2010, while non-union manufacturing employment decreased by 6 percent over that same time period. Unions are feeling the effects, with membership falling by over 600,000 workers in 2010 alone. If workers are happy without a union, the government should not foist one on them.

Sherk explains why unions are on the decline:

Union membership has fallen because traditional collective bargaining does not appeal to most workers. Polls show that only one in 10 non-union workers wants to organize. This makes sense: in the competitive private sector, unions can do little to raise their members’ pay. Additionally, most workers like their jobs and believe they are on the same side as their employers.

Fortunately, Big Labor doesn’t have to be the only game in town. Workers want a say in their workplace, but they’re becoming increasingly aware of unions’ limitations. Private-sector unions have little power to raise their members’ wages, while employers have learned that respecting their employees makes good business sense. That is why large majorities of workers say they are satisfied with their jobs and their bosses.

Unions, though, aren’t going to go down without a fight. That’s why they’re lobbying the Obama Administration to protect their interests. Unfortunately, the President is obliging, whether it’s by changing the rules of the game to make unionization easier, preventing private employers from locating in right-to-work states—as the NLRB is doing with Boeing case in South Carolina—or pushing for more government spending on infrastructure projects that employ primarily union members (while leaving the rest of the economy in the lurch).

Meanwhile, Americans are suffering from the President’s decision to satisfy unions before reducing unemployment, all while there are more signs of a declining labor market than there are of a recovery. There are things Congress and the President can and should do to improve the business climate, such as repealing Obamacare, opening the door to domestic energy production, preventing harmful regulations, passing pending free trade agreements, and reining in the NLRB. Labor Day 2012 can be brighter than today, but Congress and the President must choose the right path to help get us there.

Quick Hits: