By Ron Ulmer

With the State of the Union Speech tonight, I find it fitting to present the State of the Economy.

While many government officials are celebrating the 5% unemployment rate, most middle and working class Americans are not doing a celebratory economic dance. What are these Americans experiencing that doesn’t fit the political economic recovery narrative?

1. The large number of legal and illegal immigrants entering the country has contributed to keeping large numbers of Americans unemployed and wages declining as demonstrated by median income decreases in recent years. Since WWII, the US has accepted more immigrants than all the other countries in the World combined.
2. Many recent college graduates either cannot find a job or when they do, the pay is not commensurate with their degree. Therefore, a large number of college graduates are living with their parents.
3. As a result of the generous welfare system, many unemployedlack incentive to look for a job or to acquire a skill in demand. For example, in McLean County several well compensated court recorder positions go unfilled and I find it difficult to find a skilledresidential boiler repair person.
4. Additionally, as a result of the weak economic recovery, many unemployed persons are discouraged,simply put, they have quit seeking employment.The increase in discouraged workers is the major contributing factor to the 5% unemployment rate, not more people employed. The labor force participation rate, that isthe percent of Americans working or looking for work is about 63% the lowest since the late 1970’s. The low labor force participation rate means a smaller percentage of the population is working and paying higher taxes and that a larger percentage of the population is receiving government benefits contributing to the huge Illinois and Federal budget deficits.
5. These huge budget deficits, coupled with the rapid growth of government regulations and tax increases negatively impact business and employment growth.

I wish I could report the economic prosperity of the Reagan and Clinton presidencies would return. However, sadly and unfortunately, 2016 looks like more of the same sluggish economic growth, especially in Illinois.

Ron Ulmer is an economist, have taught economics/finance at 3 central Illinois universities and employed by Illinois Power as a Senior Rate Analyst, supervisor of economic research, Market Program Manager. Now retired, Current member Normal Kiwanis, past 25 year member Optimist International Service Club, Property owner and manager in Normal for 37 years ongoing.   

The opinions expressed within WJBC’s Forum are solely those of the Forum’s author, and are not necessarily those of WJBC or Cumulus Media, Inc.