Obama’s Dreadful Record on Jobs

For reasons that Meagan McArdle points out, the conservative charge that the Bureau of Labor Statistics cooked the recent unemployment numbers is very improbable. You'd have to believe that the BLS was willing to take an enormous risk at a date that is probably too late to do a lot of good. Color me skeptical on both counts.

That the unemployment rate measured by the Household Survey fell below 8% surely provides the Obama campaign with a talking point. Even before scrutinizing the fine print, this is a pretty weak brag. I have heard at least three Obama spokespersons say that the unemployment rate is the lowest since the President took office. While that sounds okay, what it means is that three years after the great recession officially ended, we have just now got back to where we started. That alone indicates a very dismal recovery.

The fine print looks a lot worse. The household survey is notoriously volatile. A drop from 8.1 to 7.8% is statistically insignificant. The survey also indicates that the change was mostly due to people taking part time jobs. The Labor Department revised upwards the number of jobs added July through September to 146,000 per month. September's numbers may be revised upwards as well, but last month's numbers are likely to be below the average for this year. This year is below the monthly average for last year (153,000).

To appreciate what is happening in the jobs market you have to compare the overall supply of jobs with the demand. James Pethokoukis gives us the charts

If you want to blame Dubya, fine. Above is what you can blame him for. This chart measures the percentage of the labor force (persons available to take jobs) that is actually working. It rises steadily from Reagan to Bush 43 and steadily declines thereafter. The worst thing you can say about Obama's record is that he has utterly failed to stop the slide. That is also the best thing you can say about it. We're not back where we started when Obama took office; we're back where we started when Reagan took office!

It gets better. Here is a chart laying out civilian labor force participation against population growth.

This shows you what the business cycle used to look like: sharp downturns followed by robust recoveries. Lines zigzagging upward indicate job growth robust enough to supply jobs not just to people who lost them in the last recession but also to new workers entering the workforce. The Reagan-Bush41 recovery and the Clinton recovery look very healthy. The Bush43 recovery, by contrast, looks anemic; however, it was still a recovery.

You can hardly blame Obama for complaining about the cards he was dealt. The great recession was great because it was unprecedented. The drop in labor-force participation was dropped us back to levels not seen since the early 80's recession. What is almost as striking, however, is what happened next. The line doesn't resume its rise but flattens out. There is nothing like that anywhere else on the chart. The great American jobs engine is down in a hole and stuck in neutral.

That is Obama's jobs record. Maybe we are on course for a great surge in economic growth. There is no sign of that so far. One might wonder what Obama plans to do about all of this if he is reelected. If he has a clue, he has kept it a secret.

Comments

[larry kurtz]

Gotta hand it to you earth haters, Ken: you sure know how to pile on for maximum effect. The mystery is your target audience: whom do you think you're shitting?

[Donald Pay]

KB,, We've been over this before when you've used these same statistics to make a false point. You seem not to understand very basic statistics and demography, so you keep making the same mistakes over and over.

Consider this:

(1) Republican policies hadn't yet worked to hollow out the middle class in the 1980s, as these policies were just beginning to take hold. Thus, the middle class spending could help lift the economy in the 1980s, but not so much in the 2010s when much of the wealth had flooded up to the top of the income scale.

(2) The increased percentage of people working in 1980s and decreased percentage of people working in the 2010s has to do with two demographic shifts: (a) women went to work in the 1980s, partly due to economic forces (lower wages/lower employment for males in construction and manufacturing forcing women into the labor market), and partly due to women's liberation, and (b) the entrance of the baby boom generation into the labor force during the 1980s and its beginning retirement in the 2010s.

(3) The stimulative effect of lower interest rates and massive deficit spending during the upturn in the Reagan years, was not matched by enough of a stimulus in the Obama years. While Democrats worked with Reagan to get the economy moving in the 1980s, Republicans have engaged in economic treachery to assure there will be a slow recovery.

[Stan Gibilisco]

Two observations here ...

(1) Both graphs suggest to me that the Clinton years (1992-2000) were the best in recent memory for workforce numbers in general.

(2) My best years personally were 2003-2008 during the Bush administration.

[Donald Pay]

If you look at this statistic over a longer time frame, you begin to understand that it is basically a demographic issue. I looked at the data from 1960 through this month and the undulation you see wash out, turning into ripples in a demographic ocean.

You can go to the BLS website and play around with the data.

[Bill Fleming]

Demographic Mr. Pay, as in the Boomers retiring? (for the second time...)

[Donald Pay]

Well, it's complicated, but yeah, a good chunk of this is demographics. But also look at KB's scale. It's a 12% range. Put it on a scale from 0-100% and those undulations are washed out.

Half of KB's range is demography---boomers and their echo generation. Another third of KB's range is women coming into the workforce in higher proportions for a longer time during the 70s on. Men and women now rotate into and out of employment much more than they used to.

So you're left with maybe 3-5% to be explained by economic conditions. That's important.

[Bill Fleming]

Ah thanks Don. I see what you mean about scale. Hadn't noticed that. Molehills become mountains.