By: Cody Campbell, Columnist
Views expressed in the column are the author’s own.
The White House announced on Feb. 16 that last year was the best in American history concerning job creation. White House Press Secretary Jen Psaki stated, “In 2021, the economy created 6.7 million jobs — the strongest year of job growth on record.”
This of course is a fantastic sign for America and her economy, but many still wonder why, if the jobs that are being created are boosting our economy, are prices still so high? This is due to a variety of factors.
First, let’s examine the past employment statistics for the United States. According to the Bureau of Labor Statistics, in January 2020, the unemployment rate was 3.6%, the number of unemployed persons was 5.9 million, and the number of long-term (27 weeks or more) unemployed folks was 1.2 million. In January 2021, the unemployment rate was 6.3%, the number of unemployed persons was 10.1 million, and the number of long-term unemployed folks was 4 million. In January 2022, the unemployment rate was 4%, the number of unemployed persons was 6.5 million, and the number of long-term unemployed folks was 1.7 million.
However, this is just data from singular months from the past 3 years. The worst time for American unemployment came at about April 2020, when unemployment skyrocketed from that 3.6% to about 15%. At the end of it all, the job losses amounted to 9.4 million. To circle back, as Psaki would say, to the issue at hand, only 6.4 million jobs were created during 2021. A deficit of 2.7 million jobs still remains. A continual rise in jobs is to be expected throughout the year, hopefully surpassing the number of lost jobs.
Well, you may ask, how did these jobs get re-added to the workforce, and why is the White House touting this as a celebration?
President Biden set forth a stimulus bill in early 2021 that poured over $1.9 trillion into the economy. This money was used for a variety of things, but what he would want you to focus on is the portion of that money that went to businesses so that they could re-hire the employees that were laid off due to COVID.
This would be a viable cause, if it weren’t for the fact that only $377 billion went to businesses and states for the purpose of rehiring these folks (National Association of Counties). To put that in perspective, $377 billion out of $1.9 trillion is about 20%. 20% of the money that was supposedly allocated to help the economy recover from the artificial recession created by COVID actually went to the desired avenues.
This leads into the next question that so many folks have today, and that is, “Why are prices rising so much? Why are my groceries and gas so expensive?”
Here’s the deal. When a government artificially pumps money into its economy, the value of its currency goes down (since there is more of it). When the value of the currency drops, items become more expensive. The dollar is worth less, the price of manufacturing increases due to the value of the currency decreasing, then the cost of the item manufactured increases.
To be fair, there is also the supply chain crisis that has been a hot word over the past few months. This supply chain crisis is essentially a lack of workers available to continue to cycle such a chain.
Why aren’t these people working, one may ask? The answer is simple. They are making more money by staying at home. The government, as a part of the American Rescue Plan, sent out stimulus checks to Americans whose income was less than a certain amount. They also tacked on the Child Tax Credit which stated that if you, a tax filer, had a child that you claimed as a dependent, you were able to receive more money to assist you. This would continue for months with no checks and balances, so you would be able to receive large sums of money without working, actually quite the opposite. You would receive money specifically for not working.
This is the economy that we all will have to live with for the time being, or at least until the current administration can realize that artificially pumping money into the economy creates more harm than good.