Without even a hint of irony, President Obama last week sold, and even trumpeted, his administration's economic accomplishments to the national press. But much like Arthur Miller's Willie Loman, or Meredith Wilson's Harold Hill, the sales job stands in stark contrast to reality.
True, government data shows the U.S. unemployment rate stood at a healthy 5.2 percent with more than 200,000 jobs created each month over the past two years. On the other hand, government data indicated that the overall economy expanded at an annualized pace of only 1.4% for the final quarter of 2015 and a 0.5% rate for the first quarter of 2016. This seemingly inconsistent data, that is solid job growth and lousy overall economic growth, can be reconciled by peeking behind the headline data.
Since the economic recovery began in July 2009, GDP growth expanded at the slowest pace of any 7-year period since 1947. The brisk job growth has been in part-time, low wage and/or low productivity occupations and industries. For example, over the past two years, a reduction in the average hourly work week resulted in effective job losses of almost 420,000. Furthermore, output per worker since the beginning of the economic recovery is roughly one-third the long-term U.S. average. As a result, average percentage gains in compensation are now approximately 56% of the long-term average.
But there has been one area of vigorous growth---regulations. According to the Wall Street Journal, the Obama Administration is responsible for six of the top seven years of red-tape creation in the nation's history. This is good for economists and lawyers, but not for other workers.