It’s no secret that employment is the top concern for Americans. It stands to reason, then, that politicians will be hyping their proposals for job creation, and touting their respective records on that front.
This week in Charlotte, NC, a number of speakers — including the keynote, San Antonio Mayor Julian Castro — touted job growth under President Obama by citing what seems like an impressive figure: “Despite incredible odds and united Republican opposition, our president took action, and now we’ve seen 4.5 million new jobs,” Castro said.
Chicago Mayor Rahm Emanuel, Obama’s former White House chief of staff, cited the same number. “Our economy has gone from losing 800,000 jobs a month, to adding 4.5 million private-sector jobs in the last 29 months,” Emanuel claimed.
Both statements are misleading, though Emanuel’s is more factually grounded than Castro’s. The Chicago mayor is correct, but his decision to focus only on the last 29 months is a deliberate attempt to inflate the president’s record on job creation. Castro’s statement, which did not include a time frame, is even more misleading.
Under President Obama, the U.S. economy has created a net 415,000 private-sector jobs — less than 0.2% of the 155 million-member American workforce. Castro and Emanuel chose the window that they did — beginning in January 2010 — in order to maximize the apparent job growth under Obama.
But even that statistic does not tell the full story, since the workforce itself has shrunk dramatically in size since Obama took office. Labor force participation is at 63.5 percent, its lowest level (excluding 2012) since 1981. In other words, a large chunk of Americans have simply given up looking for work. A significant number are collecting disability insurance instead, according to new research from Heritage’s James Sherk.
The labor force participation figures mean that the 8.1 percent unemployment rate also understates troubles in the job market. According to the American Enterprise Institute’s James Pethokoukis, that rate would be more than 10 percent if the labor force were the same size it was when Obama took office.
Despite similarities to workforce participation rates in the economic recovery of the early 1980s, job creation numbers during that period far outpace those of our current economic situation. So even if we examine a timeframe more friendly to the argument advanced by Emanuel and Castro, Obama’s performance is disappointing.
During the first 37 months of the current economic recovery — from June 2009 through July 2012 — the American economy added 3.38 million non-farm private sector jobs, or about 2.1 percent of the workforce. During the first 37 months of the recovery from the early 1980s recession, the economy added 5.2 million non-farm private sector jobs, about 4.5 percent of the workforce.
In short, the jobs number cited by speakers in Charlotte is misleading at best, and attempts to use large-sounding numbers to make an historically unimpressive economic recovery seem more significant than it is.
UPDATE: This post has been changed to reflect new jobs numbers released on September 7. For more on the dismal report, read the Morning Bell.