On Thursday, I heard Larry Kudlow presume one million new jobs were added in April. I was skeptical because I’m not sold on Bidenomics (lots of spending and tax hikes). The reality check arrived Friday: 266,000 new jobs instead of 1,000,000. March jobs were revised downward and unemployment ticked up to 6.1%. Democrats and their media allies responded with platitudes or shock-faced silence (happens after throwing money at complex problems, expecting easy victories).
Biden Blunder #1 – Biden over-promised “fairness” and “racial equity” in his one-party $1.9 trillion stimulus and under-delivered, because the jobs report poked a hole in his Black Lives Matter pledge. While the white jobless rate fell to 5.3%, Asian rate fell to 5.7%, and Hispanic rate held steady at 7.9%, black unemployment got worse, rising to 9.7%. This confirms the BLEXIT criticism: Democrats are all talk about black prosperity..
Biden Blunder #2 – The President and his proxies spewed mumbo-jumbo Friday. Treasury Secretary Yellen claimed brilliance: “We knew this would not be a 100-day battle.” Biden, when asked if “enhanced unemployment benefits had any effect” on workers staying home, claimed, “No. Nothing measurable.” GOP senators warned Biden doubling jobless benefits would create a disincentive to work, corroborated now by a University of Chicago report that 42% of the jobless make more from government unemployment checks than their lost job.
Bidenomics is Obamanomics II, and workers should fear a jobless recovery. Saturday’s Wall Street Journal reported many businesses won’t expand payrolls because of economic uncertainty, especially in shut-down states. Many still report workers have no incentive to work because of Biden’s checks. At $15-per-hour, can you blame them? Lemme see…work in a loud furniture factory or watch Andy Griffith reruns. Biden tried a flush money down the toilet approach in spite of three red flags.
Jobs in some industries (cruise lines) will recover slowly, as customers wait for herd immunity – and some will never come back. Remote learning means many parents cannot leave home. CNBC reports 21% of parents reduced work hours and 7% quit their jobs altogether. Many industries (auto, home-building, and restaurants) cannot run “wide open” because of worldwide scarcity (aluminum, glass jars, lumber, ocean containers, poultry, and truck drivers).
The US economy has “hard core unemployed” that vary between industries, regions, and seasons; thus, neither love nor money can now force 3% to 6% of America’s eligible workers onto non-farm payrolls. For example, that check-out gal with elementary-school children in Chicago won’t return to the grocery store until unionized teachers open the public schools – and don’t expect Biden to use his bully pulpit to shame NEA and AFT members back to work.
Politics also forced Biden to ratchet down jobs in the energy sector. Incompetence prevented Biden from launching a USMCA vaccination plan to enlarge America’s economic circle of trust. Negligence has prevented his Department of Commerce from addressing suspected price fixing in ocean freight, with dire consequences for businesses, consumers, and workers.
Ocean freight is a major component of the US economy: 11 million maritime containers with 24.2 billion cubic feet of goods enter the US annually at a freight cost to US businesses of $22 billion (average container cost of $2,000). That annual cost is now $77 billion (average container cost of $7,000) and transit times have stretched from 30 to 45 days. Let’s unpack the problem at the granular level (my company).
The business suffers because we now pay $12,000 per container – $17,000 for “premium” service to ensure goods make the sailing. At $17,000, the contents often cost less than the container. Compounding the problem, shipping lines “auction” voyage space days before sailing (uncertainty) and prolong transit-times (stock-outs).
The consequences are widespread. Overtime pay, performance bonuses, and sales commissions shrink. Trucks leave with partial loads and retailers can’t fill “sold orders” (less profit). End-users suffer rapidly inflating costs. That’s the real world that Biden decided to flood with $1.9 trillion.
Like Obama‘s $787 billion relief bill, Biden’s consumer stimulus will “trickle down” to China (first quarter GDP grew 18.1%), but Biden’s worker-relief checks encourage a dangerous stay-at-home subculture. Out here in fly-over America, blue-collar friends are comparing incomes and lifestyles. How long before cold beer and game shows trump the dignity of a job? Not long, which is how (free stuff) Democrats are created.
