Americans Deserve a Pay Raise

Hooray. Employers are really starting to hire again. We got a very good employment report on Friday when it comes to jobs created. The economy picked up 248,000 new hires in September and another upward revision for July and August brings the total to more than 300,000.

Job gains were seen in almost all major industries including business services, financial services, construction, and technology.

It's a hopeful sign that the economy may be revving up for a higher gear - and finally we may be pulling out of this 2 percent subpar growth rut.

But then there is the not so good news that still plagues the economy. One problem is a familiar one: The disappearing American worker.

Amazingly, nearly 100,000 more Americans on net dropped out of the labor force in September. Some of this is due to natural retirement of baby boomers, but a lot of it is due to workers just giving up finding the job they want.

For every worker who has found a job since this recovery began in January of 2009, which is about 6.5 million, some 7.4 million have left the workforce. So nearly 1 million more Americans have left the work in this recovery than have found a job.

That's a very distressing trend. It also explains the big dive in the official unemployment rate to 5.9 percent.

Unemployment keeps going down as more Americans give up looking for a job.

Here's another trouble spot: the jobs that the economy is creating now aren't the same caliber jobs that were lost during the recession of 2008 and 2009. Workers who got laid off are increasingly having to settle for lower wage jobs in retail, food services, or leisure and hospitality.

This may explain why President Barack Obama and his allies on the Left are able to point to McDonalds workers who are the head of a household.

If it's true that mothers and fathers are having to work as burger flippers, that's not an argument for raising the minimum wage. It's a sad indictment of this recovery.

In September, worker wage and salaries were flat. Over the last year hourly earnings are up just 2 percent. That's slightly above the inflation rate of 1.8 percent, but for the last five years the price of middle class items like food, energy, and health care have been rising at closer to 4 percent.

So workers are feeling a financial squeeze. When President Obama boasts that nearly every economic statistic is better now than when he entered office, that sounds like a laughable claim to many Americans, because the statistic they care most about - their paycheck - is shrinking.

*Stephen Moore is chief economist at the Heritage Foundation and a CBN economics contributor.