Jeb bests Hillary in American worker tweet-off

Jeb Bush is right and Hillary Clinton is wrong. You can probably say that about a lot of things. But in this case, it's about the need for more part-time American workers to work full-time in order to improve their own lots as well as the lot of the economy.

Jeb Bush speaks during town hall meeting in Hudson, N.H., July 8, 2015.
Brian Snyder | Reuters
Jeb Bush speaks during town hall meeting in Hudson, N.H., July 8, 2015.

The mini spat started when Jeb Bush short-handed the point that "people should work longer hours" in a meeting with New Hampshire's Union Leader. Hillary Clinton then tweeted, "Anyone who believes Americans aren't working hard enough hasn't met enough American workers."

A few hours later, Bush clarified his position with his own tweet: "Anyone who discounts 6.5 million people stuck in part-time work and seeking full-time jobs hasn't listened to working Americans."

Bush is right about Americans needing to work longer hours. He's also right that there are far too many involuntary part-time workers — 6.5 million today compared to a pre-recession 4.2 million. These folks are stuck because of economic reasons, traceable in large part to a slow-walking recovery and a variety of government policies that are discouraging full-time work.

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Much of this is reflected in the U-6 unemployment rate, which is the total unemployed plus people marginally attached to the labor force as well as those who are part-time for economic reasons (could only find part-time work, slack work or business conditions, etc.). That unemployment rate was 10.5 percent in June, nearly double the 5.3 percent headline unemployment number (the U-3 unemployment rate). The unusually wide spread between these rates, in part, reflects discouraged people who want to work and can't find a job, and, in part, the people who want to work more but can't get longer hours.

And Jeb Bush was probably also thinking about the low labor-force participation rate, which stands at a rock bottom 62.6 percent compared to 66 percent in 2008.

I don't know which candidate is "closer to the people," but Bush is closer to the statistical truth — at least as registered by the Bureau of Labor Statistics. In other words, facts.

So, Bush is basically saying: There are too many part-timers, they would like to work longer, and if they had that opportunity, they and their families and the economy would benefit.

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I still believe these labor-market problems are deeply rooted to this slow-paced recovery. We never had the snapback that other deep recessions produced. And there are a number of ill-conceived tax, regulatory, and monetary policies that have discouraged work, undermined incentives, and created obstacles to the kind of 4- or 5-percent growth that should have occurred over the past six years.

For example, means-tested small entitlements — like overextended unemployment insurance, Social Security disability insurance, and food stamps — have clearly perverted work incentives. Eligibility has been substantially raised and time limits have been removed. So in many cases, on a net after-tax basis, it pays more not to work.

Then there's Obamacare, which throws off a million economic disincentives. But here's one that goes directly to the Jeb Bush part-time employment issue: the so-called 29ers. If an employee works 29 hours a week, the employer does not have to purchase health care. So instead of working 34.5 hours a week, the long-term trend, you now have a lot of people at 29 hours or less because of bad government health-care policy.

By the way, economist Ed Lazear, the former chairman of the Council of Economic Advisers under President George W. Bush, estimates that every one-tenth of an hour less worked costs the economy between 350,000 and 400,000 jobs.

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We don't yet know all the details of Jeb Bush's economic plan. But on the campaign trail, he's talking about fixing how we tax and regulate, a broken immigration system, and unleashing a domestic energy revolution.

And we know he favors a 4 percent economic-growth target as a means of recovering from past policy sins and restoring American opportunity and prosperity for all. Governor Chris Christie has adopted the same target. It's way too early to endorse, but both of these gentleman have the story right.

Hillary, so far, has it wrong.

Commentary by Larry Kudlow, a senior contributor at CNBC and economics editor of the National Review. Follow him on Twitter @Larry_Kudlow.