A Con Job on Jobs
Tuesday, November 2, 2010
I was no fan of President Bush’s economic policies. But President Obama’s take on Bush-era job creation compared to his own is wide of the mark.
Last week, President Obama went to California to support Senator Barbara Boxer's campaign. During a speech he claimed, “Job growth between 2001 and 2009 was the most sluggish since World War II, more sluggish than it’s been over the last year.” Over the years, I have been a strong critic of President Bush, and I even share some of President Obama’s criticisms of the 43rd president. But this claim of Obama’s is deeply deceptive.
The chart below uses data from the Bureau of Labor Statistics and Current Employment Statistics Survey, and looks at the monthly nonfarm job changes between February 2001 (the first full month of Bush’s tenure in office) to September 2010 (the latest BLS data available).
As we can see on the chart, between September 2003 and July 2007, there were 45 months of uninterrupted job growth. That represents roughly 7.8 million jobs created during that time.
President Bush did not create these jobs, of course, since governments do not in a meaningful sense create sustainable jobs. It is also possible to argue that these jobs were only the product of the housing bubble. But whatever the reason, it cannot be fairly characterized as sluggish job growth.
More importantly, let’s look at the jobs data over the past year. After a few months of job growth between January 2010 and May 2010 (total growth: 1 million jobs), the last four months have been bad for total employment. In June employment decreased by 175,000 jobs, in July by 66,000 jobs, in August by 57,000, and in September by 95,000 jobs. That is a total loss of almost 400,000 jobs.
Interestingly, these jobs losses were concentrated in the public sector. This probably explains why in this video Austan Goolsbee, chairman of the White House's Council of Economic Advisers, only uses private sector job growth to discuss the Obama administration's job legacy so far. (NB: President Bush’s job legacy includes a big burst in government employee hiring—more than 1.7 million government employees were added to the government payroll during Bush’s two terms.)
Perhaps President Obama was looking only at private sector job growth. Between February 2001 and January 2009, the number of new private sector jobs reached 7.6 million, whereas the number of new private sector jobs thus far in 2010 is 938,000. If Obama meant that the annual private growth rate in 2010 will end up higher than the annual rate during Bush’s tenure, he could be correct. But singling out 2010 and ignoring 2009 while using all of Bush’s tenure is just cherry-picking numbers to score political points.
What about comparing net private job creation? Between 2001 and 2009 (that’s the number of jobs in January 2009 minus the number of jobs in February 2001) net private job creation was –673,000. But since Obama’s first full month in office, February 2009, net private job creation has been –2,990,000.
Obama wants to make the case that job growth under President Bush was sluggish compared to his own record. One does not need to be a Bush fan to see that it is not the case.
Veronique de Rugy is a senior research fellow at The Mercatus Center at George Mason University.
FURTHER READING: De Rugy also argues that the GOP Pledge to America is “Not Much Better Than the Status Quo,” educates us on “Taxes and Presidential Math,” and poses “The Limits of Blaming Bush.” Aparna Mathur asserts that “Labor Laws Make Finding Work More Laborious” and Scott Shane explores “The Genetics of Job Choice.”
Image by Darren Wamboldt/Bergman Group.