Going into midterms, Obama took credit for the 5.9% unemployment rate achieved by his administration.
“The United States has put more people back to work than Europe, Japan, and every other advanced economy combined.” Obama said. That progress, he added, has been “a direct result of the American people’s drive and determination, and the decisions made by my administration.”
Indeed, the Bureau of Labor Statistics (BLS) reported the 5.9% figure for October of this year, but what does it mean?
If you have a part time minimum wage job that you can’t possibly live on (and many of the jobs created during the Obama administration are that) you are considered employed. If you have a low-paying, full time job beneath your skills and education, you may be employed, but you are under-employed. If you gave up finding a job, you aren’t counted because you dropped off the unemployment rolls. The 5.9% unemployment figure may sound good, but when you take it apart, it becomes a meaningless measure of economic health.
Senator Bernie Sanders put it this way:
Real unemployment today is not 5.8 percent, it is 11.5 percent if we include those who have given up looking for work or who are working part time when they want to work full time. Youth unemployment is 18.6 percent and African-American youth unemployment is 32.6 percent.
Today, millions of Americans are working longer hours for lower wages. In inflation-adjusted dollars, the median male worker earned $783 less last year than he made 41 years ago. The median woman worker made $1,337 less last year than she earned in 2007. Since 1999, the median middle-class family has seen its income go down by almost $5,000 after adjusting for inflation, now earning less than it did 25 years ago.
The truth is that for the majority of Americans the economy is not getting better, and for many it feels like it’s going downhill. The outsourcing of jobs continues, wages are stagnated, and technology has made many jobs obsolete. Although gas prices have fallen, prices at the grocery store are rising. Kids are going to college, racking up debt, with a slim chance of getting a good paying job in their chosen field.
Elected officials and corporate owned media report that the economy is on the upswing, pointing to the booming stock market as proof we are in recovery. Yet stocks being in nosebleed territory have nothing to do with the real economy where people continue to struggle everyday.
The BLS Civilian Employment Population Ratio—what’s that?
The Civilian Employment Population Ratio is another more accurate measurement of what is going on in the economy. The BLS defines the civilian non-institutional population as persons 16 years of age and older who are not inmates of institutions (penal or mental facilities and homes for the aged) and who are not on active duty in the Armed Forces.
By this measure, you are considered employed if you (a) did any work at all in a week (at least 1 hour) as a paid employee, worked in your own business or profession or on your own farm, or worked 15 hours or more as an unpaid worker in an enterprise operated by a member of the family, or (b) didn’t work but had a job or business from which you were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not you were paid for the time off or were seeking another job.
Even with the bar for what constitutes employment set quite low, according to this measure, 41 percent of all civilian, working-age Americans are without a job. Even though this index includes people all the way up to over age 75, and may include retirees, it paints a pretty grim picture. The University of California Santa Barbara interprets the chart as follows:
The employment population ratio fell during the Great Recession and has stalled at a low level since then. Combined with the stagnation in the real wage, this has meant that labor’s share of national income has fallen as the economy grew, as measured by per capita real national income. Of course, as labor’s share fell capital’s share has risen. As capital’s share has grown, inequity has worsened and the share of income going to the top 1 % is approaching 1/5 of US income excluding capital gains. If capital gains are included, the top 1% received 22.5% of income in 2012.
Perhaps the most damning comment on the Obama Administration failures comes from the Senate Committee on Finance, Senator Ron Wyden (D), Chairman. The following is a press release from October 8, 2014:
Fact Sheet: Obama Economy Boosts Wall Street, Not Main Street
When President Obama came into office, the national unemployment rate was 7.8 percent and rose to as high as 10 percent in October 2009. Today it is 5.9 percent, however:
- The number of people who are not in the labor force has grown, despite a growing working-age population, by 12.1 million.
- The number of people who are not in the labor force who want a job has grown by more than 640,000 during the Obama Administration. Many simply gave up on trying to find a job in the Obama economy.
- The employment-to-population ratio has remained consistently below 60 percent during Obama’s tenure and has barely budged and has been at 59.0 percent since June of 2014; in contrast, the ratio averaged 62.9 percent between the beginning of the year 2000 through when Obama assumed office.
- The labor force participation rate has continued to trend downward during Obama’s tenure, from 65.7 percent when he took office to its current low of 62.7 percent.
- Payroll job growth has been tepid over Obama’s tenure: it has averaged only 135,000 per month since the end of the recession.
- While over 7.4 million payroll jobs were lost during the recession, there has only been a net 4.7 million jobs created over Obama’s tenure.
All this data combined points to a nation in trouble. If Democrats want to remain relevant, they can start by being honest about the state of the economy, end their addiction to Wall Street influence and money, and begin to serve the people they were elected to represent.