Looking at the Jobs Numbers

EXPERT COMMENTARY

Looking at the Jobs Numbers

By Antony Davies |
Dec 07, 2012

The good news is that we had 146,000 more jobs in November than in October.

The bad news is that we probably also had 140,000 more people looking for work.

Two factors are adding more people to the workforce. Because of population growth, each month there are about 150,000 (give or take) more young people coming into the labor market for the first time than there are people retiring or otherwise leaving the labor market. This means that we need about 150,000 jobs a month just for the unemployment rate to stay steady.

Second, the Fed’s historic and persistent low interest rates – a boom for borrowers – mean that senior citizens’ savings accounts are generating measly returns. This puts pressure on older workers to delay retirement and on the already retired to turn around and come back into the labor market.

But jobs aren’t a zero-sum game – your taking a job doesn’t mean that there is one less job for me to take. Each filled job means more economic activity and more economic activity begets the creation of yet more jobs. It’s like adding people to a party. There isn’t a fixed amount of fun such that each additional person sucks fun out of the room. Each additional person adds to the fun.

Jobs come from people who have ideas and are willing to take risks to bring those ideas to market. The best thing we can do to encourage these entrepreneurs is to lower taxes, reduce regulations, and stop creating uncertainty by incessant tinkering with the economy.

Politicians need to get the clue that they are the problem, not the solution. Hopefully before we all go careening over the fiscal cliff.

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