December 3, 2010
November Unemployment Rate
The November Unemployment Rate came in at a disheartening 9.8%, as employers added a mere 39,000 jobs in November. Friday’s paltry job figures fell far short of the consensus 155,000 jobs predicted by analysts. Worse yet, only 50,000 jobs were added in the private sector. The 9.8% jobless rate represents the nineteenth consecutive month where the unemployment rate has been above 9%, the longest streak since such records have been kept.
Could we have predicted these dismal November job totals? A quick review of the headlines in the Marketplace section of Thursday’s Wall Street Journal – the day before the release of the jobs report — gave abundant examples of the job-crushing policies of the Obama administration, with its program of excess regulation, high taxes and Obamacare.
- FTC Backs Don’t Track. A hyperactive Federal Trade Commission issues a report calling for the development of a system whereby consumers can opt out of having their actions monitored online. The Internet has flourished through free-market innovation, unfettered by stifling governmental oversight and regulation. Once the FTC bureaucrats step in and impose regulatory constraints on that entrepreneurial spirit that has created Google, Facebook, YouTube, and the plethora of information sites that populate the Web, it will spell the end of the Internet which has made information ubiquitous, provides us with virtually unlimited free entertainment and has otherwise improved our lives. Whacking the online advertisers whose dollars pay for all of this free content and who, yes, target their ads based on users’ online behavioral patterns, will have an obvious result. There will be less free content. Thank you, Government.
- Retailers Fight ‘Conflict Minerals’ Law. What surprises are buried in the 2,300 page Financial Reform Act? U.S. businesses are finding out. One gem is the Conflict Minerals Law which requires public retailers using tin, tantalum, tungsten or gold from parts of the Democratic Republic of Congo or neighboring countries to verify that the minerals weren’t taxed or controlled by rebel groups. Retailers like Walmart, Target, Ford and Tiffany are concerned about the tight time-line, as they must certify for materials they use in 2011 in order to meet the 2012 deadline (rules defining how companies can meet the certification requirements will not even be issued until April of 2011). The unfortunate result may be that retailers stop using materials from Central Africa entirely, further debilitating those economies. More confusion, uncertainty and unintended consequences.
- Smaller Firms Still Hesitant to Hire. Thanks to uncertainty over taxes, the cost of Obamacare (including its 1099 provision, which requires businesses to file a tax report when they pay a vendor more than $600 in a year), and a generally unfriendly business environment, small businesses are afraid to hire.
- FCC Chief Backs Usage-Based Broadband Pricing. The FCC Chairman has endorsed the idea of broadband providers charging more to heavy Internet users. The FCC’s support for usage-based pricing models may curtail the development of new online businesses which depend on unlimited Internet bandwidth plans. Would companies like YouTube have developed in an environment where more is charged to heavy video downloaders? Probably not.
- Senators Attack McDonald’s Health Plan. Democratic Senators accuse McDonald’s of offering its workers a bad deal on health insurance. More fallout from the new healthcare law as McDonald’s warned federal regulators that unless it got a waiver from certain provisions of Obamacare, it might be forced to drop its health-insurance plan for nearly 30,000 hourly workers.
- MBA Grads Face Tough Job Market. Not surprisingly, with all of the uncertainty, companies are not hiring.
- An Alternative Financing Option for Start-ups. Banks have made it too onerous for start-ups to find financing by traditional methods. The financial market uncertainty caused by the gargantuan Financial Reform Act, which authorizes over 200 regulations that have not yet been written, has left banks afraid to lend.
An agenda of excess regulation, high taxation and debilitating Obamacare is not conducive to job creation. Tragically for the millions of Americans still out-of-work — as reflected in the November Unemployment Rate — or otherwise underemployed, this is an economic lesson ignored by the academics in the White House.