At yesterday's news conference, Barack Obama announced his economic team. At the same time, he promised he would create or save 2.5 million jobs by 2011 (See Full Story). Now, to those who are just totally in love with Mr. Obama, this is music to their ears. But, here's the real life facts.
As a country, we have a population of 300 million. That population grows at about 2 percent per annum; compounded. That means that roughly 6 million new workers enter the job market every year. The economy typically adjusts to that growth by adding new jobs for the majority of them. On a theoretical basis, even if we were in a recession/depression and unemployment zoomed to 10 percent, that means that 90% or 5.4 million of those newbie's in the job market would wind up getting a job.
Last year, 2-1/2 million people were added to the unemployment rolls. However, our population grew by 6 million. So, even in what most people would consider a bad labor year, 4-1/2 million people got some newly created jobs in order to have only had an increase of 2-1/2 million unemployed. If that didn't happen, the unemployment rate would be sitting at another percent to one-and-a-half percent higher; at 7.5 or 8 percent rather than the current 6.5 percent. It's just simple math. And, my math doesn't even take into consideration all the legal and illegal immigrants that are also absorbed by our job market each year.
The problem with Mr. Obama's pledge is that it is probably doable under almost any circumstance; unless, of course, we suddenly have unemployment numbers that rise to, and/or substantially above, 10 percent in a full-fledged depression. Even if we lose 3 million more jobs to unemployment next year, and the unemployment rate zooms to 7.5 ore 8 percent, there will be at least 3 million new jobs that have to be created for that number to be contained. If not, the unemployment rate will rise to 8.5 or even 9 percent. Mr. Obama's pledge is just silly political pablum that our less-and-less educated population seems to happily slurp up. Our economy grows somewhat proportionately to handle all those new babies that are born here. Remember, if the unemployment rate remains the same from year to year, at least 5 million "new" jobs are created ever year; year after year. Lastly, is anyone ever really going to remember that Mister President-elect promised 2-1/2 million new jobs in 2008 when the year 2011 rolls around? Most people can't remember what happened last month; let alone, remember what happened 3 years ago.