What Joe Biden Should Have Said at the Democratic Convention
Tuesday, September 11, 2012
Friday's jobs report shows that if the economy indeed turned the corner with President Obama in the driver’s seat, then the president has steered us off the road to recovery.
At his speech accepting the vice presidential nomination at the Democratic convention, Vice President Joe Biden said of President Obama, “because of the decisions he has made… America has turned a corner.” What the vice president should have said was, “because of the decisions he has made… America has turned the corner and run into a ditch.” Friday's jobs report shows that if the economy indeed turned the corner with President Obama in the driver’s seat, then the president has steered us off the road to recovery.
To most Americans, the single most important measure of whether the country is on the right track is jobs. When the economy is creating a lot of jobs, people think we are headed in the right direction. When it is not, people think we are headed the wrong way.
So let’s compare the job market when President Obama took office in January 2009 to the situation today. Despite an economic recovery that is now over three years old, the job market remains moribund.
Job growth is not keeping up with population growth. Most economists believe we need between 125,000 and 150,000 new jobs a month just to keep up with the expanding population. The economy created 96,000 jobs in August, according to the Bureau of Labor Statistics (BLS).
Looked at over the entire Obama presidency, the pattern appears worse. Since the president took office, the American population has grown by 8.6 million. But the seasonally adjusted number of Americans with jobs has declined by 86,000 over the same period, BLS figures show.
The number of people without work has increased. Currently 1.3 million more Americans without a job “want a job now” than when the president took office. The number of discouraged workers has increased by 15 percent. And the number of people unemployed for 27 weeks or more has gone up 87 percent.
Currently 1.3 million more Americans without a job ‘want a job now’ than when the president took office. The number of discouraged workers has increased by 15 percent. And the number of people unemployed for 27 weeks or more has gone up 87 percent.
A variety of alternative measures of labor underutilization are all worse now than when President Obama was inaugurated in January 2009. For instance, unemployment plus marginally attached workers (people who aren’t in the labor force, but would like to be, and who have looked for a job in the past three months but not the last month) as a percentage of the labor force plus marginally attached workers has gone up from 9.1 percent to 9.6 percent. Another measure of labor underutilization, called U-6 (which measures the number of unemployed plus marginally attached workers plus those working part time for economic reasons as a percentage of the labor force plus marginally attached workers), has increased from 14.2 percent to 14.7 percent.
Measures of the share of Americans working also have worsened since January 2009. The labor force participation rate hit a seasonally adjusted 63.5 percent last month, down from 65.7 percent the month the president took office. The employment-to-population ratio fell to 58.3 percent in August, down from 60.6 percent in January 2009.
Even those who have a job have taken a hit. Median wages have fallen by 1.7 percent in inflation-adjusted terms since the president took office, BLS figures indicate.
It’s true that President Obama doesn’t have direct control over the job market and that he inherited a labor market that was in poor shape. So it might not be fair to blame him for the current situation. But if the labor market has turned a corner because of the president’s decisions, shouldn’t the jobs numbers look better now than when he took office?
Scott Shane is the A. Malachi Mixon III Professor of Entrepreneurial Studies at Case Western Reserve University.
FURTHER READING: Shane also writes “When High-Interest Payday Lending Pays,” “Why Small Businesses Aren’t Using the Health Insurance Tax Credit,” and “When Reducing Barriers Leads to More Failed Businesses.” Ike Brannon and Matt Thoman discuss “Why Unemployment Is Worse Than You Think.” James Pethokoukis contributes “‘Better Off’: Not in This Reality.” Kevin A. Hassett says “Jobs Growth Stagnates Again.”
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