On October 16th, about 130 business leaders met at AMN Healthcare in San Diego for the third “Manufacturing in the Golden State – Making California Thrive” economic summit. The summit was hosted by State Senator Mark Wyland in partnership with the Coalition for a Prosperous America and a long list of other regional businesses and associations.
In his keynote speech, “Seizing the Opportunity,” Dan DiMicco, chairman emeritus of Nucor Steel Corp., led off by shocking the audience with facts about the real state of our economy and our unemployment rate. By September 2014, we still had not reached the level of employment that we had when the recession began in December 2007 although 81 months had passed. We lost 8.7 million jobs from December 2007 to the “trough” reached in February 2010, but because our recovery has been much slower than the previous recessions of 1974, 1981, 1990, and 2001, the gap in recovery of jobs compared to these recessions is actually 12,363 jobs.
In contrast to the misleading U-3 unemployment rate of 5.9% for September 2014 that is reported in the news media, the U-6 rate was 11.8%. The government’s U-6 rate is more accurate because it counts "marginally attached workers and those working part-time for economic reasons.” However, the actual unemployment is worse because the participation in the workforce has dropped from 66.0% to 62.7%. In other words, if the December 2013 Civilian Labor Force Participation Rate was back to the December 2007 level of 66.0%, it would add 8.2 million people to the ranks of those looking for jobs. The manufacturing industry lost 20% of its jobs, and the construction industry lost 19% of its jobs.
Unemployment Data Adjusted For Decline in Civilian Labor Force Participation Rate
(Adjusted For Decline from December 2007 Level Of 66.0% to 62.8% in September 2014)
|
Reported unemployed U.S. workers |
9,262,000 |
|
Involuntary part-time workers |
7,103,000 |
|
Marginally attached to labor force workers |
2,226,000 |
|
Additional unemployed workers with 66% CLF participation rate |
8,199,000
|
|
Unemployed U.S. workers in reality |
26,770,000 |
|
Adjusted civilian labor force |
166,287,000 |
|
Unemployment rate in reality |
16.1% |
“We got in this position from 1970 until today because of failed trade policies allowing mercantilism to win out against true FREE Trade,” DiMicco said. “We bought into wrongheaded economic opinions that America could become a service-based economy to replace a manufacturing-based economy. Manufacturing supply chains are the wealth creation engine of our economy and the driver for a healthy and growing middle class! The result has been that manufacturing shrank from over 30% to 9.9% of GDP causing the destruction of the middle class. It created the service/financial-based bubble economy (Dot.com/Enron/Housing/PONZI scheme type financial instruments)."
He added, “We have had 30 years of massive increases in inefficient and unnecessary government regulations. These regulations, for the most part, in the past have been put in place by Congress and the Executive Branch. However, today they are increasingly being put in place by unelected officials/bureaucrats as they intentionally by-pass Congress.
“American’s prosperity in the 20th century arose from producing more than it consumed, saving more than it spent, and keeping deficits to manageable and sustainable levels. Today, America’s trade and budget deficits are on track to reach record levels threatening our prosperity and our future.”
He said, “Creating jobs must be our top priority, and we need to create 26-29 million jobs over the next 4-5 years. There are four steps we can take to bring about job creation:
- Achieve energy independence.
- Balance our trade deficit.
- Rebuild our infrastructure for this century.
- Rework America's regulatory nightmare.
In conclusion, DiMicco said, “We need to recapture American independence through investment in our country’s people, infrastructure, and energy independence, and by reversing the deficit-driven trends that currently define our nation’s economic policy. Real and lasting wealth is, and always has been, created by innovating, making and building things — all three ─ and servicing the goods producing sector, not by a predominance of servicing services!”
