Undoubtedly over the next few months we will hear the Obama campaign repeat the claim he made last week during a visit to the new Consumer Financial Protection Bureau – 3.2 million jobs have been created in the last 22 months, including nearly 2 million last year. In Democratic party propaganda, you’ll often find claims like this paired with data from George W. Bush’s presidency, suggesting that three years into Bush’s first term, he had presided over a loss of 3.2 million jobs.
It’s technically true that according to adjusted statistics, there have been over 3 million new hires across both the public and private sector. But that didn’t happen in a vacuum. What the Obama Campaign wants to avoid at all costs is a discussion of the full state of the current labor market.
First and foremost, although the President and the mainstream media are celebrating our new “low” 8.5% unemployment rate (still over 50% higher than average unemployment during the Bush Administration), that number is strongly dependent on seasonal hires for the holidays, and the continuing shrinkage of the labor pool. Right now, the number of Americans 16 and older who have jobs stands at 58.5%, the lowest it has been since 1983.
Further, over a million eligible workers have given up and stopped looking for work since 2008. If our current unemployment rate were recalculated using the size of the labor pool from December 2007 (62.7%) we would have an unemployment rate of 11%.
The reason why so many have given up is our dismal long-term unemployment situation, which is now the worst since the Great Depression. Right now, over 45% of jobless Americans have been unemployed for six months or longer.
Other unemployment statistics remain equally grim. The U6 unemployment rate, which measures the unemployed plus the underemployed who are still actively seeking employment, stands at nearly 16%. The unemployment rate among teens is hovering around 25%. The unemployment rate among blacks remains steady at 16%, with over 40% unemployment among black youths.
Now let’s look at “job creation” via Obama’s $850 billion Stimulus plan. Although the Administration claimed “2 million jobs created or saved” by the Stimulus in 2009, further analysis showed that most of the money invested by the government went toward subsidies to keep existing workers on government payrolls, rather than toward new hires. One widely publicized study reduced the number of ‘created or saved’ government jobs to 450,000, with a concurrent reduction in the private labor market of over 1 million jobs.
Other studies have shown that, instead of inspiring state and local governments to undertake new projects and hire more unemployed workers, the bulk of Stimulus money was used to pay for projects already on the books that were completed by workers already on state or local government payrolls. Government contractors in the private sector were asked to buy unnecessary equipment and complete jobs inefficiently, in order to cook statistics and make it appear that a great deal of money was being quickly spent on Stimulus projects.
Finally, adding insult to injury in the employment market, only 42% of private firms that received Stimulus grants or contracts actively sought to hire the unemployed; the rest simply used the money to poach workers from competitors. 47% of workers hired for Stimulus-funded jobs were already employed at other similar jobs.
According to generally accepted statistics, the US labor market shed 8.5 million jobs during this most recent recession. Assuming that we indeed added 3.2 million Americans to public and private sector payrolls during the last two years, we are still far, far behind in terms of economic recovery. And when you factor in all the above details - the number of workers poached from private sector jobs by Stimulus subsidies, the percentage of long-term unemployed (which is not improving), the millions who have given up looking for work and have dropped out of the available labor pool – it becomes obvious that there has been no recovery at all, at least in terms of employment.
And Barack Obama desperately wants to make sure that you don’t understand that.