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| The Myths of Unemployment in the Bush Presidency |
ETWolverine |
03/22/04 |
Hello everyone.
There have been a number of statements put out by Democrats against Bush that have been used to bash Bush’s economic policies. The vast majority of these statements are related to employment or job creation. The media has been repeating these claims and pundits have been playing them up with some success. But are these claims true?
I have done some limited research, and have found that there are a number of popular myths that are being bandied about. But the truth tends to be far different from what has been stated by the liberal media and the Democratic nominees and their supporters. Here are a few examples:
Myth #1:
There are fewer people employed today than there were in January 2001, when Bush took office.
The truth:
The number of people age 16 and over who were employed in January 2001 was 137,790,000 (adjusted for seasonality). In February 2004, that number was 138,301,000 (adjusted). This represents an increase in the number of employed people of 510,000, on an adjusted basis. On an unadjusted basis (raw numbers), the number of employed in January 2003 was 136,181,000, and the number employed today is 137,384,000. This represents an increased number of employed people of 1,203,000. Thus, in fact, there are 1.2 million more people employed today than there were in January 2001.
Myth #2:
The Unemployment Rate is up, which means that jobs have been lost.
The truth:
As seen in the answer to the first myth, this is simply not true. While it is true that the Unemployment Rate is currently 5.6% (as of February 2004) as compared to 4.2% in January 2001, unemployment is actually down from its high of 6.2% in July 2003.
Additionally, the unemployment rate does not reflect the number of people unemployed. It reflects the number of people unemployed as a PERCENTAGE OF THE TOTAL LABOR FORCE. The Labor Force is the number of people over the age of 16 who are available and willing to work. The Labor Force in January 2001 on a seasonally adjusted basis was 143,787,000. That number has grown over the past 3 years to 146,471,000, an increase of 2,684,000 people in the labor force. This mostly represents the number of people who have finished school and are now available for work, or who were not part of the labor force, but are now entering the labor force (for instance, former stay at home mothers who are now re-entering the work force). Thus 2.7 million more people became available to work in the past 3 years.
The number of unemployed at January 2001 (adjusted) was 5,997,000. When compared to the Labor Force at that time, the Unemployment Rate was 4.2%.
5,997,000 / 143,787,000 * 100 = 4.2%
The number of unemployed at February 2004 (adjusted) was 8,170,000. When compared to the Labor Force at that time, the Unemployment Rate was 5.6%.
8,170,000 / 146,471,000 * 100 = 5.6%
But here is the key point. Notice the difference between the numbers of unemployed at January 2001 vs. February 2004.
8,170,000 – 5,997,000 = 2,173,000.
A 2.2 million increase in unemployment. But the increase in the Labor Force was 2.7 million. Thus, despite a growth of people looking for jobs of 2.7 million, there was only an increase in the actual number of unemployed people of 2.2 million. Which means that 500,000 of those people entering the job market found jobs. And it means that the number of available jobs is NOT decreasing, but rather has increased by 500,000. It’s just that the labor force increased at a greater rate. (This jives with the increased number of employed of 510,000, adjusted, discussed in the response to Myth #1.)
The bottom line is that the country is not loosing jobs, as some would like to claim. The problem is not a loss of available jobs. The problem is that the number of jobs is not increasing AS FAST AS the number of people entering the job market. So the idea that Bush has somehow caused a decrease in the number of available jobs in the USA is patently false. There has been significant job growth... just not at significant as the number of people looking for jobs.
Myth #3: Bush’s policies are driving jobs overseas.
The truth:
As seen above, the number of employed people during the Bush Presidency has actually increased by 1.2 million unadjusted, 510,000 adjusted. While there are indeed a number of jobs going overseas, particularly to India, the fact is that there has still been a net growth in the number of employed people in this country. Bush’s policies have done nothing to cause jobs to leave the country. And while we would like to see a greater increase in the number of available jobs, the idea that Bush is causing jobs to disappear is absurd.
Myth #4: Unemployment is at record levels.
The truth:
We are not at record high unemployment levels. In fact, we have not reached any kind of record unemployment during the Bush Presidency. Even in the months following 9/11 when unemployment rose dramatically, we did not reach such record levels. The highest level of unemployment came in 1982, during the Reagan era, when unemployment soared to 12.1 million. And in fact, unemployment during the Clinton era (supposedly the ‘good years’) reached a high of 10.0 million. So far, during the Bush Presidency, the highest level of unemployment we have seen was 9.2 million, in July 2003. And we have seen an improvement of 1.1 million jobs since then. So we have not been anywhere near the highest levels of unemployment in history, and we have seen tremendous improvement in just seven months. And our current unemployment rate of 5.6% is the same rate that existed in February 1996, the year that Clinton was re-elected.
Myth #5: The Bush Administration is only creating 29,000 per month, when they should be creating 250,000 per month.
The truth:
Who says we should be creating 250,000 jobs per month? And in fact, job creation has actually been much higher than that over the past few months.
Month/Year: Unemployed (000s): Job Growth (000s)
June 2003---------9,245----------------N/A
July 2003---------9,048----------------197
Aug 2003----------8,929----------------119
Sep 2003----------8,966---------------(-37)
Oct 2003----------8,797----------------169
Nov 2003----------8,653----------------144
Dec 2003----------8,398----------------255
Jan 2004----------8,297----------------101
Feb 2004----------8,170----------------127
Total Job Growth (8 months)-----------1,075
Average Job Growth (8 months)----------134.4
As seen above, job growth has averaged 134,400 per month over the past 8 months, and has totaled 1,075,000 in that time period. Thus, job growth has not been 29,000 per month as some have argued. It has been much higher than that for most months, and continues set a steady pace of improvement. And if job growth continues along the same pattern until the election (and there is no reason to believe that it won’t), and if the Labor Force remains relatively level (and I don’t foresee any huge shifts between now and then), unemployment will decrease by another 1.2 million by October, and the Unemployment rate will drop to 4.8%... the lowest level since July 2001.
Myth #6: No president has ever been re-elected with a net loss of jobs during his first term.
The truth: Reagan was reelected after just such a situation. Unemployment was 6.7 million when Reagan took office in January 1980. At October 1984 (the most recent information available to voters in the general election in November), unemployment was 8.4 million, a net jobs loss of 1.7 million. Yet Reagan was re-elected with the greatest landslide victory in history... he took 49 of 50 states.
Basically, what I have found is that the statements made in the media are pretty much false. The economy IS creating new jobs at an average rate of 134,400 per month. The number of employed people in the USA is up by 1.2 million (510,000 if adjusted for seasonality), and we are not at historic levels of unemployment. The rhetoric of the Democrats turns out to be, as usual, more myth than fact.
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Clarification/Follow-up by ETWolverine on 03/22/04 3:53 pm:
By the way, just for the record, all of the data above came from the Bureau of Labor Statistics website.
http://www.bls.gov/data/home.htm
Elliot Clarification/Follow-up by ETWolverine on 03/22/04 5:43 pm:
Chou, I just looked it up.
The number of unemployed manufacturing workers in Jan 2001 was 911,000. The number at February 2004 was 1,094,000, an increase in unemployed manufacturers of 183,000. These numbers are unadjusted. When compared to the 1.2 million jobs (unadjusted) added overall during the same period, it is relatively a pittance. 183,000 jobs translates to an unemployement rate of 0.1%. 183,000 is 2.2% of the entire unemployed number of 8,170,000. Frankly, a loss of 183,000 jobs in manufacturing during a two-and-a-half-year recession in the manufacturing industry is really not that bad. Especially when you consider that jobs are coming back at a rate of 134,400 per month.
You should also be made aware that employment of manufacturers of durable goods is way down during the same period, decreasing from 549,000 to 706,000 for increased unemployment of 157,000. It's in the area of durable goods that manufacturers have taken the biggest hits. Non-durable goods have only seen an increase in unemployment of 27,000 (361,000 at 1/01, and 388,000 at 2/04).
Nor do I see any big evidence of a mass exodus of manufactuing jobs. 183,000 jobs lost in 3 years is NOT evidence that manufacturing jobs are going overseas.
Elliot
Clarification/Follow-up by XCHOUX on 03/22/04 10:33 pm:
Elliot: This morning on Pubic Television, an expert was quoting totally different stats. ?? Have to look into it myself. Thaks, Clarification/Follow-up by ETWolverine on 03/23/04 8:27 am:
Of course they quoted different numbers. PBS broadcasts what the liberal analysts say, which as I have said above, is more myth than fact. But if you look at the raw data itself from the BLS website, the numbers are pretty clear.
Clarification/Follow-up by tomder55 on 03/23/04 11:51 am:
If I was falling for liberal propaganda , would have used the liberal reason for the decline in the unemployment rate ;which is :people have given up and dropped out of the job market. The unemployment rate coming out of a recession is something Bush can hang his hat on . It is lower than the average unemployment rate of the 1990s .In my answer I cite the Labor Dept. , Alan Greenspan,and the White house projections;not Moveon.org.
I for one ,do not hold the Administration responsible for it .Business cycles occure .I think the President has done what he can given a recession that is compounded by the war on terror.His rebates primed the pumps and were a good temporary fix.But ,he has touted his policies as ones that would create jobs ,and so far that has not happened. Clarification/Follow-up by ETWolverine on 03/23/04 12:29 pm:
>>>If I was falling for liberal propaganda , would have used the liberal reason for the decline in the unemployment rate ;which is :people have given up and dropped out of the job market<<<
You are right. I apologize.
>>>But ,he has touted his policies as ones that would create jobs ,and so far that has not happened. <<<
Yet. But it will. It is inevitable.
Clarification/Follow-up by XCHOUX on 03/23/04 11:03 pm:
Elliot: I remember now, I was watching an expert on international labor abuses. Like: how Walmart offshores clothing making jobs to Pakistan where girls age 14 make sweats for American kids for, say, about $3.00 a week. His point was that the practices of large companies, by shiping off jobs overseas, lowers the income of all workers including American workers everywhere and is actually impoverishing for Americans as well as causing virtual forced labor in third world countries.
So, now I'm p*ssed off about that! lol
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