On Monday, the Wall Street Journal carried an excellent article by Edward Lazear entitled Slow Recovery or Failed Agenda? The article summarized the arguments that President Barack Obama and former Gov. Mitt Romney will make regarding the state of the economy.
There is a telling point in the article as Mr. Lazear describes the relative points on the nation’s employment picture:
“Mr. Romney can reply that Mr. Obama wants to have it both ways. The president does not accept responsibility for any of the jobs lost, but he wants to take credit for all of the gains. Yet we know that all recessions end and that labor markets recover eventually. What distinguishes this labor-market recovery is not that jobs are finally being created but rather the rate of growth is so slow that it will be 2016 before we return to pre-recession employment levels.
“Mr. Romney may also point out that there hasn’t been one day during the entire Obama presidency when as many Americans were working as on the day President Bush left office. Moreover, the unemployment rate, which we were told would not exceed 8% if we enacted Mr. Obama’s stimulus package (the American Recovery and Reinvestment Act of 2009) has never been below 8% during his presidency.”
While the points made by Mr. Lazear are true, it strikes me that like politicians and other members of the media the reference to unemployment statistics or even job creation fails to tell the whole story.
There have been innumerable articles written about how incomplete and misleading the unemployment statistics are. In reality, unemployment statistics represent the number of persons applying for and receiving welfare benefits in the form of unemployment payments. Those statistics do not include those for whom unemployment benefits have expired (ninety-nine weeks), those who have simply given up looking and have more or less moved permanently on to the welfare rolls, and those working on less than a full time basis. Depending on how you count those three categories, the real unemployment in America is estimated to be between sixteen and twenty-four percent.
Mr. Lazear’s point about it taking until 2016 to recover all of the jobs lost during this last recession is based on a straight-line assumption of job growth at the same rate that Mr. Obama trumpets as his major economic achievement. While that growth rate paints a sad picture for America’s working families, it falls far short of the actual and even more dismal picture of real job growth in America and even more so in Oregon.
Mr. Lazear’s projection assumes a static number of jobs – that simply recouping the number of jobs lost during the recession will represent a recovery. And that would be fine if the population of America – and Oregon – was static also. But they are not. From 2000 to mid-year 2012, the population of the country grew from 281,425,000 to 308,746,000 according to census data from the United States Department of Commerce. That represents an average annual growth rate of 2.375 Million people. During that same period the total number of working age people (18 and over) grew from 209,130,000 to 234,564,000 for an average annual growth rate of 2.212 Million people.
In 2000, based on data from the United States Bureau of Labor Statistics, the number of working age people actually employed was 132,481, 000 or 63.35%. By 2005, the number of working age people actually employed had increased to 134,814,000 which represented 60.73% of those of working age. But mid-year 2012, the number of people actually employed had declined to 133,088,000 which represented only 56.74% of those of working age.
(Oregon has actually fared even worse than the nation. The percentage of working age people having a job in 2000 stood at 61.98%. By 2005, that percentage had dropped to 60.92% and by mid-2012 the number had plummeted to 55.12% – proof positive that over twenty-five years of Democrat administrations has decimated the very working class people they claim to represent.)
The total number of people and working age people has increased at a rate faster than the total number of jobs. That disconnect has accelerated during the Bush/Obama recession and has failed to recover at the pre-recession levels over the past 28 months for which Mr. Obama seeks to take credit. Mr. Lazear should have stated,
“What distinguishes this labor-market recovery is not that jobs are finally being created but rather the rate of growth is so slow that [we will never recover to the same percentage of working age Americans for which there is a job.”] [Bracketed words supplied]
Until the ratio of jobs to working age people returns to that of the pre-recession period, there will not be a recovery. One is hard pressed to argue that leaving working people worse off than they were represents recovery or even progress.
The policies of Mr. Obama’s administration have actually retarded job growth to a point that a smaller percentage of working age people have jobs today than when he claims that his job recovery began. And while the percentage of those employed continues to decline the welfare rolls continue to increase.
Over seventy percent of people surveyed believe the country is headed in the wrong direction. When it comes to job creation, that is not an opinion – it’s a fact and Mr. Obama bears the majority of the blame.