It’s About Jobs, Stupid – I mean Mr. Obama

Right From the Start

President Barack Obama continues to hammer on the fact that 5 Million jobs have been created since the bottom of the recession in 2009. While he is more than willing to accept credit for each and every job created, he continues to eschew responsibility for any of the jobs lost. Similarly, Gov. John Kitzhaber routinely champions Oregon’s job creation numbers since he became governor again in 2011 but denies responsibility for any of the jobs lost during the latter part of his first two terms. Each prefers to talk about the unemployment numbers rather than the job creation numbers for obvious reasons – the decline in unemployment numbers provides an illusion of an improving economy while the job creation numbers, particularly when viewed in context, provide a reality of a weak economy and declining employment opportunity.

Unemployment numbers represent, at best, the number of people receiving welfare benefits in the form of unemployment payments. They vary week to week and month to month for a whole variety of reasons other than employment gains. People give up looking up for work, people accept part time work in lieu of full employment, unemployment benefits (99 weeks) run out and any other reason that interferes with active searching for employment. It is the reason that the unemployment percentage can go down at a rate faster than job creation and, in some instance, employment numbers and unemployment numbers can rise and fall simultaneously. The correlation between unemployment rates and actual employment is casual at best.

There are only three numbers that are important for working men and women in measuring the health of the economy. The first is the per capita earnings which have declined by slightly over $4,000 per year for workers during the four years of Mr. Obama’s administration and similarly under the last two years of Gov. Kulongoski’s final term and the first two years of Mr. Kitzhaber’s new term. If you are making less this year than you did last year then things are not getting better – they are getting worse.

The second number is the total employment – jobs created. But that number needs to be placed in context with the third number which is the percentage of adults working. In order for total employment to remain constant, it must increase at least at the rate of population increase. Unless the number of total employment increases at a rate sufficient to keep pace with population increases, the net effect is that the number of working age people without access to jobs will continue to increase. In the simplest terms, the creation of fifty jobs for every one hundred persons entering the workforce reflects a continuing deterioration of the economy.

Mr. Obama is quick to note that the total number of jobs created since the nadir of the Bush/Obama recession is 5 Million. What Mr. Obama fails to note – actually avoids like the plague – is that the working age population has increased significantly faster. In August, the labor force participation rate dropped to it lowest level since 1981 at 63.5 percent. The labor force participation rate reflects the percentage of working age people who are either employed or are actively seeking employment. Thus that number, low as it is, actually understates the status of job availability for working age Americans because it does not include the nearly 7 million Americans who have simply given up looking for employment in an economy that is destitute of job opportunities.

Oregon’s labor force participation rate is similarly at 63.5 percent and represents a 0.2 point drop from August. But that doesn’t tell the whole story about the worsening conditions of Oregon’s employment picture. Since the commencement of Mr. Obama’s presidency in 2009, the total number of jobs in Oregon has declined from 1,656,500 to 1,631,600, a loss of 24,900 jobs. During that same period of time Oregon’s population has grown from about 3.8 Million to slightly more than 3.9 Million. Thus, during Mr. Obama’s administration (and the two Democrat governors) Oregon has added 100,000 people and lost 24,900 jobs – not exactly a picture of economic vitality.

But it gets worse. The jobs demographics are changing in Oregon. Good paying jobs are being exchanged for minimum wage jobs. From the beginning of 2009 to the present, the number of manufacturing jobs declined 14,200 from 184,100 to 169,900 – a decline of nearly eight- percent. During the same period construction jobs declined by 15,200 from 84,000 to 68,800 – a decline of slightly over eighteen percent. And jobs in the Trade, Transportation and Utilities sector declined by 4,200 from 324,600 to 320,400 – decline of slightly over one percent but still significant in actual numbers. Of the job 24,900 jobs lost, all – and actually more – can be said to come from the relatively well paying sectors of Oregon’s economy.

In the meantime, the number of minimum wage jobs represented by the Leisure and Entertainment sector actually increased by 2,000 from 166,800 to 168,800. (As a side note, the number of state public employees remained nearly constant – one of the few areas where high paying jobs remained static but the cost to taxpayers increased without a concomitant increase in service and is more reflective of the power of the public employee unions and the dependency of the successive Democrat administrations on their campaign financial contributions.)

The bottom line here is that despite the best efforts of Mr. Obama and his administration (and echoed by Oregon’s successive Democrat administrations) to convince that down is up and that red is green, the country’s employment situation continues to worsen every day. We have not reduced the number of unemployed; we have simply injected despair of ever finding a job. We have not increased employment when compared to the increasing number of working age population, and the shift in the demographics of employment have contributed significantly to the decline of $4,000 annually in per capita income.

We don’t have to settle for this. This should not be the new normal. We can do better.

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Posted by at 05:00 | Posted in Economy, Employment, Gov. Kitzhaber, Gov. Kulongoski, Jobs, President Obama | 28 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Bob Clark

    It is discouraging to go to meetings where government employees and associated bureaucrats lobby for even higher tax rates at the state and local level. Private sectors are having to trim their compensation costs, as exhibited by the decline in real wages in this sector. But public employees and bureaucrats continue to get COLAs and benefit increases. Portland Public Schools (PPS) is an example of this. The last labor contract signed only last year gave out more step increases, COLAs, and benefits were allowed to increase from 51 to 52% up to 55% of salary. The idea the Taxpayer is shorting education is bogus to the nth degree. Portlanders voted an expanded operating levy for PPS only last year, and here they are back for more in the form of an Arts Tax (a Sam Adams smoke job), which will actually just fund more government employment and preserve the benefits of existing teachers. The Arts tax is already trending towards being a slush fund, as its government sponsors rework the funding scheme in violation of the Arts measure ordinance itself.
    On top of this, PPS’ actual expenditures have been growing at nearly twice the rate of inflation since the early 00s, and yet student enrollment is about the same as ten years ago (having declined in the middle 00s before recovering in the last couple of years). The average homeowner in the PPS/city of Portland district saw his/her property tax bill increase nearly 4% this year. So, this myth about the under funding of public education needs to be seen as what is: BOGUS!

    • DavidAppell

      >>Private sectors are having to trim their compensation costs, as exhibited by the decline in real wages in this sector.<<

      Baloney. In fact, real per capita government receipts are decreasing, and are now 3.4% below their peak in 4Q2010.

      There are many reasons for the stagnation in real wages over the last three decades, including (but not limited to) globalization, automation, and runaway executive compensation. To imply it's all because of government expenditure is simplistic, at best.

    • DavidAppell

      Even better: as a percentage of GDP, government spending at all levels peaked in 3Q2009, and is now 1.6 GDP percentage points lower. {This decrease is likely acting as a drag on the economy — $244 billion less economic activity per year.}

  • Right-to-Work legislation would resolve the overpayment of govt. salaries and pensions.

  • DavidAppell

    If you don’t have a job, go out and create your own. Use your savings as start-up capital. Raise funds from family, friends, and investors. Take out a loan. Work a second job in the evenings. Stop whining always about the government doing this and the government not doing that. Stop waiting for the government to make you a job, and do something for yourself for yourself.

    Ayn Rand would approve.

  • Judahlevi

    Some people who have no understanding of economics believe the government just needs to spend more money (borrow more money) and throw it into the economy and everything will be rosy. Debt doesnt’ matter. Interest payments on debt don’t matter. Can’t make your interest payments? Just borrow more money.

    Kind of reminds you of the 2008 debacle when homeowners borrowed more than they could pay back. Also reminds you of Greece where the government could not pay its debts. Printing money will create hyper-inflation and devalue the dollar. But yeah, everything will be rosy if the government just keeps spending more money than it has.

    • DavidAppell

      I have been hearing people whine about the deficit since the Carter administration. Since then I’ve seen Republicans run it up more than Democrats, which makes their protests rather sterile and impotent.

      This is a time for deficit spending, as in the wake of a major financial crisis where consumer demand is low because they are paying off excessive debt. The time to have saved money was when Bill Clinton handed a deficit to George W Hoover, who then decided it was “the people’s money” and gave it all to rich people, while charging two wars and an expansion of Medicare to the credit card. The result was easily predictable: a higher deficit. For some reason, Republicans stopped whining during that period.

      It’s hard to understand, isn’t it?

    • DavidAppell

      And if you think Greece is a metaphor for the U.S., you don’t understand the first thing about macroeconomics. Greece has issues the US does not, especially (1) they don’t control their own currency, and so can’t use monetary policies, and (2) corruption of the tax system.

    • DavidAppell

      > Printing money will create hyper-inflation.

      We have been hearing this for decades. Why hasn’t it happened yet?

      • valley person

        It hasn’t happened for the simple reason that monetary policy has been sufficient to prevent it. The minute inflation appears to be a problem, they raise interest rates and dampen things down. Why conservatives can’t figure this out is beyond me.

    • Rupert in Springfield

      Very true. The fact is we are at the point where, even if it worked, the government cannot print more money other than to maintain current programs. In other words it cannot print more money for the kind of large stimulus we saw BO try when he entered office.


      Precisely because of hyper inflation. There is no room to instigate a stimulus plan without seriously rattling faith in the stability in the US dollar. That means hyper inflation and economic collapse.

      Right now we have low interest rates because of one thing, we don’t need to pay high interest rates because people are buying US treasuries at the current low rates. Crazy as it seems, the US dollar is still seen as more stable than most other currencies.

      That’s the good news. The bad news is, that while the US dollar is seen as a safe haven by a lot of people, a tremendous amount of the buying of treasuries is being done by the government itself.

      By buying its own securities the US government maintains low interest rates. Why does the US government want low interest rates? To avoid economic collapse.

      With the debt BO has run up, if interest rates rise we will simply not be able to pay our debt. Right now interest on the debt is around 5% of the federal budget. That’s with an interest rate of zero and a gigantic federal budget.

      Now imagine people start to lose faith in the US dollar? Imagine if people start to figure out this buying our own debt is a little hokey? They won’t want to buy our treasuries will they?

      You can see where this is going, raising interest rates.

      What if interest rates went up to 10%? That’s not unthinkable, we have seen those kind of rates before during the last period of hyper inflation under Ford/Carter.

      Well, with an interest rate of 0% interest on the debt is 5% of the budget, so if interest rates go up to 10% you have economic collapse.

      Will it happen for sure? Who knows. However one thing is a sure thing. If it does happen, president or not, BO will be standing at the front of the ship like Washington crossing the Delaware saying it’s all Bush’s fault.

      • valley person

        Rupert, what you don’t know about economics continues to be a lot. There will not be any hyper inflation, nor will there be much just plain old inflation. The economic problem of the day is getting economic activity up, meaning put money in people’s pockets so they can buy stuff and put other people to work.

        Having the wrong analysis leads to solving the wrong problem.

      • DavidAppell

        It’s comical to hear Republicans complain about the deficit now — where were you all 10 years ago?

        In 1Q2001 federal receipts were 20.7% of GDP. By 1Q2005 they had fallen to 18.0%, and by 1Q2009 to 15.9%.

        Had they stayed at the level they were when Bush took office, federal receipts would have been $10.9 trillion higher by the time he left office — enough to have completely erased the federal debt, with $5.2 trillion left over for wars and similar programs of killing innocent people. Maybe even a tax cut.

  • DavidAppell

    Larry is presenting some bad statistics here.

    In fact, Oregon total nonfarm employment peaked in 2/2008, at 1,738,500:

    It fell to 1,590,800 in Feb 2010, and and has been climbing back since — it now stands at 1,631,600.

    A decline of 9,500 workers in local government employment is responsible for about 1/4 of that drop. (State government gained 1,200 workers in this time period.)

  • Louiev

    Have a little respect for the President of the United States, Stupid! I mean Mr. Huss!

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