Obama Proclaims Unemployment Down, 11 Million Jobs Created – But He Doesn’t Proclaim The Following Facts!

Obama jobsThe BLS “Official” U-3 unemployment rate for March 2015 is 5.5%. The U-6 unemployment rate is 11%. However, Shadow Government Statistics says the unemployment rate is about 23%. So, which rate is correct? The answer is, “They all are, it depends upon your perspective.” If you are the MSM or an Obama fan, you like U-3. If you recognize that the U-3 rate omits part time employment, long term unemployed, and those marginally attached to the labor force in its calculation, you view the U-6 rate as more representative of what’s truly going on. Economic realists, however, favor the Shadow Government Statistics rate.

By not recognizing those employed part time, the long term unemployed, and those marginally attached to the labor force, the U-3 rate was driven below 6%. But those unrecognized people do exist, and do want jobs. So, examining jobs, job creation, and job types is in order.

Regarding jobs, the Democratic Policy and Communications Committee (DPCC) claims 61 straight months of job creation, that 12.1 million private sector jobs have been created during that time. Obama said, during his State of the Union speech, that “[O]ur economy is growing and creating jobs at the fastest pace since 1999,” and that “our businesses have created more than 11 million new jobs.” That’s all well and good, but … (there’s always a “but” when Obama is concerned)

Regarding jobs created, Obama, after eight years, will probably be behind Clinton, Kennedy/Johnson, and Reagan, but ahead of Nixon/Ford and George W. Bush. (chart 2 in referenced article) If job growth is expressed as a percentage of US population growth, “net job growth has declined under Obama.”

And here’s a little or not advertised fact (by Obama and the MSM) about job creation:

The fact is, the economy has gained just about the same number of private-sector jobs (Obama’s preferred measure) in the 27 months since the most recent job slump hit bottom as it did in the 27 months following the bottom of the first [George W.] Bush slump. And looking at total jobs – the broader and more customary measure – Bush’s post-slump job creation record was significantly better than Obama’s.

So, Obama’s job creation performance has been, at best, “mid-pack.”

Now let’s focus upon the types of jobs created during Obama’s reign.

To set the stage, here is what Jim Clifton, Chairman and CEO at Gallup, had to say about jobs and unemployment:

There’s another reason why the official [U-3] rate is misleading. Say you’re an out-of-work engineer or healthcare worker or construction worker or retail manager: If you perform a minimum of one hour of work in a week and are paid at least $20 — maybe someone pays you to mow their lawn — you’re not officially counted as unemployed in the much-reported 5.6% [the U-3 rate when this was written].

Yet another figure of importance that doesn’t get much press: those working part time but wanting full-time work. If you have a degree in chemistry or math and are working 10 hours part time because it is all you can find — in other words, you are severely underemployed — the government doesn’t count you in the 5.6%. Few Americans know this.

There’s no other way to say this. The official unemployment rate, which cruelly overlooks the suffering of the long-term and often permanently unemployed as well as the depressingly underemployed, amounts to a Big Lie.   [emphasis mine]

Let’s examine part-time jobs. For example, in June 2014, BLS announced that 288,000 jobs were created in May. That sounded great, but what Obama and the MSM failed to mention was that the BLS jobs figure didn’t distinguish between new part-time and full-time jobs. Full-time jobs in May fell by 523,000. What increased was part-time jobs, they increased by about 800,000.

As a result, involuntary part-timer workers rose to 7.5 million in May 2014, compared with 4.4 million in 2007. Many adults depended and currently depend on low-wage, part-time jobs that would normally be filled by teenagers. Federal Reserve Chair Janet Yellen said in September 2014: “There are still too many people who want jobs but cannot find them, too many who are working part time but would prefer full-time work.”

The Federal Reserve Bank of Atlanta, in February, asked: Are We Becoming a Part-Time Economy?

Compared with 2007, the U.S. labor market now has about 2.5 million more people working part-time and about 2.2 million fewer people working full-time.

Now, let’s examine full-time jobs. The good news: “Of the additional 8.2 million people employed since October 2010, 7.8 million (95 percent) are employed full-time.”

The above sounds great, but…

The types of full-time jobs are reflected in wages and income. The hourly wage (in 2014 dollars) has not grown at all under Obama (chart 4 in referenced article). The real median hourly wage has actually fallen since 2009. According to the Census Bureau, under Obama median income is down 4%.

As Annie Lowery of The New York Times said, “… the strongest employment growth during the sluggish recovery has been in low-wage work, at places like strip malls and fast-food restaurants.” That statement is reinforced by Michael Evangelist, author of “Tracking the Low-Wage Recovery: Industry Employment & Wages”, who said: “Fast food is driving the bulk of the job growth at the low end – the job gains there are absolutely phenomenal.” Further, “Less then 2 percent for fast-food industry jobs belong to the executives, while more than 89 percent of all jobs in the fast-food industry belong to cooks, cashiers, delivery workers and other non-managerial workers.” Those are “burger flipper” jobs, probably the only type of job an unemployed engineer can find.

From Evangelist’s report:

Type of Employment

Percent of Recession Losses

Percent of Recovery Growth

Lower-wage Industries

22

44

Mid-wage Industries

37

26

Higher-wage Industries

41

30

 

Here’s a fact that you will never hear from Obama (or Democrats, or the MSM):

Today, there are nearly two million fewer jobs in mid- and higher-wage industries than there were before the recession took hold, while there are 1.85 million more jobs in lower-wage industries.   [emphases mine]

Regarding (what MSNBC called strong) job growth and the types of jobs resulting from that growth, Michael Hudson, research professor of economics at University of Missouri, Kansas City, said, “Of course, job growth is not really ‘strong’ when the jobs created are mainly in the service sector paying the minimum wage or barely above it. This is not growth. It is desperation when wage trends do not keep with the rising cost of acquiring housing, health care and obtaining an education to get work.”

Bottom Line: Obama’s job creation accomplishments may or may not be as great as he claims. Yes, the U-3 rate fell, but so what! There is no doubt about the types of jobs created on his watch.

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