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.