This morning’s jobs report underscores the urgent need to address inflation to raise wages and get Americans back to work. In a vacuum, the topline numbers of 3.8 percent unemployment and 678,000 jobs created — alongside 5.1 percent wage growth in the latest report by the Atlanta Fed — may look promising; however, a closer look at our economy paints a much more troubling picture.
Economists are warning of high recession risks, and — when you account for 7.5 percent annualized inflation — real wage growth is negative. Most critically, while labor force participation continues to trickle upward, the current rate of 62.3 percent is much closer to rates in April 2020 than to pre-pandemic workforce participation. Those rates were consistently near 66 percent, even through the 2008-2009 financial crisis. The U.S. desperately needs workers to fill good-paying jobs to unclog our supply chain crisis. To put it simply: our focus should be on getting Americans back to work; not paying them to stay home.
The good news for Americans currently on the sidelines of the economy is there are more good, high-paying jobs open than ever. For example, the American Trucking Association estimated a deficit of 80,000 drivers in 2021, while the average starting salary in the industry is greater than $70,000. Similarly, there were 856,000 manufacturing job openings in December 2021, up from 360,000 in December 2019.
Unfortunately, in his State of the Union address on Tuesday night, President Biden doubled down on his stalled social spending agenda — policies which would undermine our efforts to get Americans back to work and ensure they have resources like child care. I was also disappointed the president resorted to tired attacks about Republicans’ economic agenda when we are fully committed to ensuring every able-bodied American can benefit from one of the millions of good-paying career opportunities available right now to support themselves and their families.
I was especially concerned with President Biden’s renewed push to extend Democrats’ expanded monthly Child Tax Credit. An analysis from the University of Chicago found that extending the enhanced Child Tax Credit would reduce U.S. employment by 1.5 million people. Other reports have found a correlation between the expanded CTC and decreased return to work by women and parents, compared to men and non-parents. Now is not the time to push parents, especially mothers, out of the workplace.
There are nearly 1.5 job openings for every unemployed American, and we should be focused on policies to get people back to work — and ensure they are rewarded financially when they do. In 2018, I began the work to ensure states weren’t only using their Temporary Assistance for Needy Families block grants to mail out benefits without working with beneficiaries one-on-one to connect them with opportunities. As a country, we should ensure these beneficiaries have resources to get them back to work so they can benefit from the dignity that comes with supporting their families.
Today’s job report shows just how important it is to address inflation and get more Americans connected with good-paying jobs. Unfortunately, if this week’s State of the Union is any indication, the president is resorting to the same policies that have failed to put our country back on the path to prosperity.
Adrian Smith represents the 3rd District of Nebraska. He is the ranking member of the Trade Subcommittee of the House Ways and Means Committee.