Unemployment: Why McCain talks about economic pain
posted at 11:10 am on August 1, 2008 by Ed Morrissey
The Bureau of Labor Statistics released their July numbers, and despite the mildly positive GDP growth announced yesterday, the rate rose again. Unemployment has now risen to 5.7% as the economy lost 51,000 jobs. The biggest jump in the rates came — again — from teen workers:
The unemployment rate rose to 5.7 percent, and nonfarm payroll employment continued to trend down in July (-51,000), the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Employment continued to fall in construction, manufacturing, and several service-providing industries, while health care and mining continued to add jobs. Average hourly earnings rose by 6 cents, or 0.3 percent, over the month.
Both the number of unemployed persons (8.8 million) and the unemployment rate (5.7 percent) rose in July. Over the past 12 months, the number of unemployed persons has increased by 1.6 million, and the unemployment rate has risen by 1.0 percentage point.
Over the month, the unemployment rates for adult men (5.3 percent) and whites (5.1 percent) edged up while the rates for adult women (4.6 percent), blacks (9.7 percent), and Hispanics (7.4 percent) were little changed. The jobless rate for teenagers increased to 20.3 percent in July. The unemployment rate for Asians was 4.0 percent in July, not seasonally adjusted.
Unemployment among teens rose two full percentage points from June, and six full points from last year. The biggest change in that market, of course, came from the minimum-wage hike passed by Congress last year. The increase made labor more expensive at the same time that fuel prices started rising, putting two inflationary pressures on employers. Without recourse to even higher price increases for their product, they have had to curtail labor expenses instead.
Politically, these numbers require a great deal of care when addressing the economy. Phil Gramm’s assessment of the economy was correct, but his words were poorly chosen. With unemployment now rising for the seventh successive month, John McCain and his campaign need to take care how they address legitimate economic concerns without sounding dismissive, and at the same time point out that the sky isn’t falling.
It’s a tough balance to strike. McCain does it best when he focuses on these legitimate concerns about the economy’s health and argues that incentivizing investment and lowering taxes will spur the growth that will provide long-term strength. Jobs don’t get created by hiking capital-gains taxes or manipulating labor prices, as Congress proved yet again. That’s the message McCain needs to deliver consistently.