It seems counterintuitive, but “the economy” as measured by Gross Domestic Product -- or other broad measures -- can be growing even as the jobs market and personal incomes are flat or falling.
Yet, this is where millions of American workers find themselves today and the jobless recovery wrought by Obamanomics is starting to have a corrosive effect that is harming our society at a very fundamental level.
While President Obama and the inside-the-Beltway crowd worry about the federal government’s “fiscal cliff,” the really dangerous “cliff” toward which America is hurtling is caused by the failure of Obama’s disastrous economic policies to create private sector jobs.
The lack of jobs is a bigger threat to America than government spending, debt, the environment and terrorism combined. As Jim Clifton, chief executive of the polling firm Gallup put it, “If countries fail at creating jobs, their societies will fall apart…”
And the failure of Obamanomics to create jobs is already reaching society changing levels.
In June, Obamanomics led to the creation of 80,000 new private sector jobs, while 85,000 potential workers became wards of the federal government by qualifying for Social Security disability payments.
More than 10 million people are now receiving these disability benefits. These people, it should be noted, aren’t counted among the unemployed, thus helping to mask the severity of our current jobs crisis.
Thanks to Obamanomics, as Forbes contributor and CATO Fellow Jim Powell noted, “The media has focused on prolonged unemployment over 8 percent, while generally downplaying a shocker: the soaring number of people unemployed for more than 6 months.”
According to the Bureau of Labor Statistics, back in January 2009 when Barack Obama was sworn in, there were 2.6 million people unemployed for more than 6 months. By June 2012, the ranks of the long-term jobless soared more than 100 percent to 5.3 million.
However, bad as that is, it is not the whole picture. Labor force participation – a sure measure of how job seekers see the economy – tells an even bleaker story.
“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. As of April, only 63.6% of Americans over the age of 16 fell into that category, according to the Labor Department,” according to a CNN report. That's the lowest labor force participation rate in 30 years.
To put the percentages in numbers, “Last year there were 86 million people who didn't have a job and weren't consistently looking for one, according to Labor Department data.” So, even when you subtract the retirees, students and stay-at-home parents, what this means is that millions of American workers have simply “checked out” of the American economy.
And who can blame them? These Americans have not just gone over a jobs cliff, they’ve gone over a confidence cliff that has caused them to lose faith in the American economic system and hope for the future.
With millions of Americans becoming newly dependent on the federal government or losing confidence in the American economic system and simply checking out of the workforce, it is pretty clear the process Clifton warns against is under way. The question now is not whether it has begun, but whether Mitt Romney and the Republicans can win this election and turn it around before it is irreversible.