Unprecedented Misery

Barack Obama’s bizarre comment regarding the most recent jobs report seems to indicate a profound disconnect from the grim reality Americans continue to suffer.

The June Jobs Report published by the Labor Department Friday was, again, a deep disappointment.

  • Private sector employers hired 84,000 employees and government cut 4,000 for a net 80,000 additional jobs.  To keep up with growth in the working age population requires about 140,000 new jobs every month.
  • 4.9 million or 56% of the jobs that were lost in 2008 and 2009 have still not been replaced.  The chart above compares the current recovery with the past three recoveries.  In fact, this is the worst since the government began counting jobs by sampling employers in 1939.
  • The unemployment rate was unchanged at 8.2%.

President Obama responded to the jobs report during a campaign speech. (Video here.) With a triumphant tone of voice he bellowed:

We learned this morning that our businesses added 84,000 new jobs last month.  and that overall means that businesses have created 4.4 million jobs in the last 28 months, including 500 thousand manufacturing jobs.  That’s a step in the right direction.

(Note that they’re “our” businesses when they create jobs.  But when they resist tax hikes or oppressive regulations or new health insurance mandates they’re “Washington special interests.”)

He said “businesses”  have created jobs because he doesn’t want to remind us that state and local governments are still laying off workers even though he sent them hundreds of billions in “stimulus” funds, that he claimed would prevent layoffs.  He hopes his audience is made up of people who don’t pay attention to economic statistics and will think 4.4 million sounds like a lot of jobs, even though, as the chart above shows, this is a painfully anemic jobs recovery. 

The President then went on to make an astonishing announcement:

That’s a step in the right direction.  But we can’t be satisfied because our goal was never to just keep on workin’ to get back to where we were in 2007.  I want to get back to a time when middle class families and those working to get into the middle class have some basic security.  That’s our goal.  So we’ve gotta grow the economy even faster… (scroll to the end for an update regarding this quote.)

Is this an attempt to mislead the uninformed into a false perception that the job market is already “back to where we were in 2007”?  Perhaps. 

That Obama could dismiss the 2007 employment situation as an unworthy goal is astounding given the facts, and voters’ memories.  As the chart shows:

  • In June 2007 there were 4 million more jobs there were last month.
  • At the end of 2007 there were 4.89 million more jobs than last month.
  • One month later, in January 2008 there were 138 million jobs, the highest number ever tallied and 4.93 million more than last month.

If Obama’s radical restructuring of health care,  his tsunami of new financial and environmental regulations, and his unprecedented surge in spending and debt had succeeded as he promised there would be more, not fewer jobs now than there were in 2007.

As discouraging as the figures above are they don’t begin describe how much worse the job market is now than it was in 2007 because they don’t account for the additional jobs a healthy economy creates to accommodate population growth.  The chart below tracks the Unemployment Rate and the Labor Force Participation Rate since June 2007.  As it shows, the decline in the Unemployment rate from it’s peak of 10% to 8.2% is due entirely to a decline in the number of people who “participate” in the labor force either by holding a job or actively seeking a job.

Labor force participation has never before declined as steeply as it has during the past three years.  Millions of people who in a healthy economy would be employed or looking for a job have given up and dropped out of the labor force because there are simply no jobs to be had.

If labor force participation were the same today as it was in June 2007, and if the unemployment rate were the same as it was in June 2007 there would be a whopping…

20 million

..more jobs than there are today! Americans would rejoice, and Barack Obama’s landslide reelection would be “mission accomplished.” 

Update: We were accused of misrepresenting President Obama by quoting an inadvertent slip of the tongue. But the claim that it was not his goal to “get back to where we were in 2007” is part of his regular stump speech and he repeats it continuously on the campaign trail.

 

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