I published an analysis of the 2025 Q1 GDP report yesterday on Freedom and Reason. There were reasons in that report to be optimistic, but obviously a robust report would have been more welcome news. Now the April jobs report is out and it finds that employers added 177,000 jobs in April. This is on top of the 185,000 jobs the economy in March.
The unemployment rate remains unchanged at 4.2 percent. While this is a historically low number, keep in mind that unemployment is only a measure of who’s looking for work. For several years now we have had an increasing proportion of the American population disinterested in working. They don’t show up in the headline rate.
A more comprehensive measure is the U-6 unemployment rate, which includes discouraged workers who have stopped looking for work (and those working part-time for economic reasons). This broader figure has historically been several percentage points higher than the headline rate.
To illustrate the difference, consider that during the COVID-19 pandemic the official rate spiked to nearly 15 percent in April 2020; during the same month, the U-6 rate exceeded 22 percent.
Today the U-6 rate is 7.8 percent and labor force participation rate (LFP) stands at 62.6 percent. The LFP is the proportion of the working-age population aged 16 and older either employed or actively looking for work. There is an uptick in participation compared to recent figures, but readers should be cautious about reading too much optimism in that number. A fundamental alteration to the economic structure of the country must be made before making any real strides.
How did we get here? It isn’t Trump’s fault. As always, one has to take the long view. Concerns about the anemic economic growth during the early 2000s was somewhat muted following the Great Recession, when the job market steadily improved. But the bounce-back was an illusion that obscured a massive transfer of wealth upwards and weak underlying fundamentals. The reality is that labor force participation has declined since the 2000s.
There are various reasons for this, but the most overlooked reason is deindustrialization, which has removed from communities across the nation the incentive that attracts citizens to work: high-wage value-added manufacturing. Manufacturing has been moved to, among other places, China. This is why re-industrializing America (the point of tariffs) and removing illegal aliens from the country are central to Trump’s policies.
Deindustrialization is a serious concern for workers. The anemic quarter century was set up by trends in the twentieth century. In the immediate postwar decades, the US (and Western Europe, with our assistance) saw a golden age of industrial growth. However, starting in the 1970s and accelerating in the 1980s and 1990s, the US experienced deindustrialization; manufacturing jobs declined due to the rising organic composition of capital (capital over labor—automation, etc.) and the offshoring of production to countries with cheaper labor.
This development is not a natural occurrence, but involves elite planning. It’s a strategy to combat something Karl Marx predicted, i.e., the falling rate of profit (which globalization has not stemmed), as well as undermine the strength of private sector labor unions, which depend on capitalism remaining largely within national borders for their actions to work. Globalization devastated organized labor. That was on purpose.
It was job losses and economic shifts in traditional manufacturing regions, particularly in the US Midwest, that created the “Rust Belt”—and the social pathologies that came with it. At the same time countries like China, and later Vietnam and India, embraced export-led industrialization and rapidly grew their manufacturing sectors. This has allowed them to dominate consumer markets in the West, their cheap commodities partially offsetting the relative loss in the standard of living in the deindustrializing West.
As I have written quite a bit about lately, there has been in recent years talk of re-industrialization, in part driven by concerns over supply chain resilience and national security. Those are important consideration, to be sure, but what should be at the forefront of the discussion is re-industrialization as a strategy to rebuild the American Dream. That we only hear populist-nationalists talking about the relevance of high-wage value-added manufacturing to raise the living standards of our citizens is an important tell.
Don’t be naive. The other side is not disinterested in such matters; they oppose re-industrialization because it represents an obstacle to globalization and the managed decline of the West. It’s the same motive that lies behind Democrat resistance to immigration control.
Democrat strategist James Carville summed up the party’s strategy in a nutshell when he said that he didn’t want America making T-shirts. The T-shirt is a metaphor for apparel manufacturing, which some of my Tennessee friends will remember was a source of good paying jobs in our state before the first big globalization push in the 1980s. The metaphor stands for other sectors, as well. Remember when electronic subassembly plants left Tennessee during that same period? I know I do.
Carville wants cheap Chinese goods. He doesn’t want good paying jobs for Americans. We’ve known this for a long time. It was the man he served, Bill Clinton, who played one of the major roles in deindustrializing America. NAFTA anyone? Etcetera.
It may not always be clear which party represents working class interests, but it’s very clear which party doesn’t.
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