Will The US Ever Regain Its "Can Do" Attitude Or Has That Disappeared As A Result Of Government Programs?

Heritage Foundation's Stephen Moore: 'Government Discourages Work'

Wednesday, 08 Apr 2015 10:24 AM

By Dan Weil

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Stephen Moore, a distinguished visiting fellow at The Heritage Foundation, offers an interesting description of weakness in the job market.

"The great conundrum of the U.S. economy today is that we have record numbers of working age people out of the labor ‎force at the same time we have businesses desperately trying to find workers," he writes on Forbes.com.

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The labor force participation rate matched a 37-year low of 62.7 percent last month, but unemployment totaled only 5.5 percent, a seven-year low.

"While the jobs market overall remains weak, demand is high in certain sectors," such as mechanics, computer technicians and nurses, Moore says. "The shortage of trained employees and of low-skilled employees willing to work," represent major problems now.

Moore sees four obstacles for increasing employment.

• "First, government discourages work. Welfare consists of dozens of different and overlapping federal and state income support programs.
• "Second, our public school systems often fail to teach kids basic skills.
• "Third, negative attitudes toward blue collar work. I’ve talked to parents who say they are disappointed if their kids want to become a craftsman instead of going to college.
• "Fourth, a cultural bias against young adults working."

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As for the March jobs report released Friday, it was weak, but not weak enough to keep the Federal Reserve from raising interest rates this year, says Brian Belski, chief investment strategist at BMO Capital Markets.

Non-farm payrolls rose only 126,000 last month, the smallest gain since December 2013. And wages climbed just 2.1 percent in the 12 months through March, equaling the average increase since the recession ended in June 2009.

"The report was mostly disappointing, but it's not surprising," given corporate retrenchment and bad weather, Belski told CNBC. "We don’t think it takes the Fed off track from raising rates later this year."

Many economists expect the central bank to begin boosting rates in September. It has kept its federal funds rate target at a record low of zero to 0.25 percent since December 2008.

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