Polls show over and over again that jobs are a major concern for Americans, hence the close scrutiny of employment statistics during presidential campaigns. While presidents don’t create jobs, their policies can influence the direction of the economy by creating, or not creating, an environment that is conducive to job creation
This week’s chart uses data from the Bureau of Labor Statistics (BLS) Employment to show the number of jobs gained during each presidential tenure since 1945 as well as the unemployment rate. This chart isn’t meant to compare President Obama (who’s completed just under one term so far) to President Clinton (who completed two terms.) Rather it is meant to look at how each president did during their tenure. Also, considering that population grows and labor participation varies over time, this data is probably slightly biased in favor of President Obama for both the job numbers and unemployment rate.
Here is what the data show:
- Since President Obama took office, fewer jobs were created than were lost. Actually, some 300,000 fewer Americans are employed then when the president took office. That’s mainly because a large number of jobs were lost during 2009 and the so-called recovery is the slowest one of all time, with very meek monthly job creation and weak economic growth.
- It would take Obama roughly 280,000 new jobs per month for every month from now until January 2013 to get him out of last place. [He would need 2.1 million new jobs per month for every month until January 2013 to catch up to Carter.]
- While it would be unfair to compare Obama with Clinton, this chart shows that at this point President Obama’s job numbers are far worse than Presidents Carter, Kennedy, and Ford, who were in office almost as long or served much shorter periods than he has.
#more#This chart also shows two-term presidents:
- Presidents Clinton and Reagan saw the highest gains in jobs and maintained some of the lowest unemployment rates during their administrations.
- President George W. Bush’s overall record is underwhelming [to say the least], especially considering that so many of the jobs created during his term were government jobs.
Here also are a few facts about our labor market.
- In theory, we are exactly three years into recovery.
- This is the slowest recovery in history.
- Wage growth over the last twelve months is the slowest ever.
- We have the slowest economic growth of any recovery.
- We have had an important drop in labor-force participation that makes unemployment rates look better than they probably should.
Now, there is an important question: Under these conditions, are we really recovering?
My colleague Keith Hall, a former commissioner at the BLS, tells me that it doesn’t look like it. According to him, the single best labor-market indicator is doing is the employment-to-population ratio — what share of the working-age population (16 years old and above) has a job. When the ratio goes up, things are getting better. When it doesn’t, the labor market is not recovering. Here is a chart. As you can see, the line during the last three years is flat, and last month, it even dropped. He writes:
So, what kind of labor market recovery have we seen over the past three years? As the graph shows, the answer is simple: NONE. Job growth hasn’t been strong enough to support our growing population. The employment-to-population ratio was 59.4% three years ago. It hit a 25-year low of 58.5% in October of 2009, and yet it remains at just 58.6% today.
To know what kind of job growth we need for economic recovery, we must first realize that the United States is still a growing nation. Each month, the working-age population grows by an estimated 180,000 people. Simply to support this growing population, we need to add at least 130,000 new jobs. With anything less, we fall further behind. No matter what the other economic data indicates, a true labor market recovery requires job growth strong enough to consistently raise the employment-to-population ratio. This would mean adding at least 250,000 new jobs per month, every month, for years.
Are you concerned yet? I am. In particular, I worry because export numbers have been really good lately, and represent roughly 30 percent of our economic growth. But the foreigners who have been buying our stuff aren’t looking so good themselves. For instance, France will likely enter into recession in the next quarter, the rest of Europe could follow, and China has given multiple signs that things are getting rough. Then what? We have tried Keynesian economics and it failed. Is Congress ready to give up spending-driven interventions?