Obama's Disingenuous 10 Million Job Creation Claim

At a Congressional Black Caucus Foundation event last week, Barack Obama took credit for creating 10 million new jobs in the last 54 months.  Of course, what he didn't tell this African-American group is that blacks got very few of those 10 million jobs.  That's because, in 2009, when he took office, black unemployment was 12.6%.  Today, it has only mildly decreased to  11.4%; or, only a 9.5% improvement. On the other hand, white unemployment now stands at 5.3% after having been at 6.9% when Obama took office; a 23% reduction in that unemployment rate.

Nor, did he mention that before creating 10 million jobs, 4.3 million where lost.  Something that was never supposed to happen with the passage of his near trillion dollar stimulus package.  Nor, did he own up to the fact that in most of those 54 months, there was only job creation because workers stopped looking for work.  For example, last month saw a job growth of 142,000.  At the same time,  268,000 able-bodied workers just gave up looking.  If those 268,000 workers, when polled, had said they were still looking for work, they would had been counted as part of the workforce and, as a result,  there would have been a reported loss of 126,000 jobs instead of the reported gain.  Today, the real unemployment rate, when adding in those workers who have given up, is 12%.  That means that there are 9.3 million workers who are sitting home when they could actually be working.  A number almost equal to the number of jobs that Obama claims to have created.

Lastly, half of all the jobs created by the President have been low paying.  That's why median incomes continue to be lower than they were when he took office:

References:

Obama proudly announces 10m jobs created since he was elected - but he forgot to mention the 4.3m lost along the way: http://www.dailymail.co.uk/news/article-2772360/Obama-proudly-announces-10m-jobs-created-elected-forgot-mention-4-3m-lost-way.html

Employment Report January 2009: http://www.bls.gov/news.release/archives/empsit_02062009.htm

August 2014 Employment Report: Table A-2. Employment status of the civilian population by race, sex, and age: http://www.bls.gov/news.release/empsit.t02.htm

Alternative Measures of Unemployment: http://www.bls.gov/news.release/empsit.t15.htm

 Half Of All Jobs Created In The Past 3 Years Were Low-Paying: http://www.huffingtonpost.com/2013/05/13/low-paying-jobs_n_3266737.html

Real Median Household Incomes: https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjgrEZN56FgagV7kK68-FbuUtVMNcdA4gJRlDCQe8MJhfpK4tstbMzL2ydC17Kgf6WaU2UNvvI-LiAPsh0L4XT8h3z5bsTUjMBtlbmkUILa1Kic3fRovz9hhoSH4VWhwG_8GJHniP5yo9k/s1600/RealHousehold2013.PNG

Source of Graph: Census: Poverty Rate declined in 2013, Real Median Income increased slightly: http://www.calculatedriskblog.com/2014/09/census-poverty-rate-declined-in-2013.html

The Good, The Bad, and The Ugly: The July Jobs Report

The Good:

Obviously, the good was that 209,000 jobs were created.  Additionally, 119,000 people rejoined the workforce rather than sit home or waste time trying to find a job that was impossible to find.  This month broke a long standing trend of people leaving the workforce.  As a result, a long-term trend of a falling labor participation rate was reversed with that rate rising from 62.8% in June to 62.9%.  Most notably, the number of people forced to take a part time job because there was no full time work fell by 129,000.  People 55 years and older continue to beat the general population with an unemployment rate of 4.5%.  This simply proves that older Americans are willing to work longer and that employers are more willing to hire the older worker because of their experience and dependability.

The Bad:

The unemployment rate went up from 6.1% to 6.2%. This is not as bad as it sounds because it was primarily driven by people re-entering the workforce.  This is typical of a recovering employment situation where discouraged workers start looking for work again; rather than not be counted as part of the workforce and not part of the calculus for the unemployment rate.  The U-6 unemployment rate continues to remain high at 12.2% and went up again this month.  Many consider this the true unemployment rate because it does not "exclude" discouraged workers.

The Ugly:

While teen (16-19) unemployment was lowered this month, it still stands at a horrible 20.2%.  But, the ugly fact was that Black teen unemployment rose again this month from 33.4% (last year) to July's 34.9%.  Simply, employers are more willing to employ older adults than hire the less experienced teens.  The high Black teen unemployment shows that small businesses still haven't recovered in the minority neighborhoods of our major cities. High teen unemployment is one of the fallouts from increasing the minimum wage because older adults are more likely to compete with teens for entry level, minimum wage jobs.  Long term, this could result in a highly unemployable subset of workers who gained no experience during these lean years of high teen unemployment.  It could also result in increased income inequality in the years going forward.

Reference:

Employment Situation Report for July 2014:  Above data from Tables A-1, A-2, A-9, A-10, and A-15: http://www.bls.gov/news.release/empsit.nr0.htm

Old Workers Hit New Record High As Jobs For Key 25-54 Age Group Slide By 142K: http://www.zerohedge.com/news/2014-08-01/old-workers-hit-new-record-high-jobs-key-25-54-age-group-slide-142k

The Real Employment Numbers That Never See Headlines

When the employment report is issued each month, most people and, certainly the media, are only interested in two numbers: (1) the number of jobs created or lost in that month and (2) the resulting unemployment rate.  But, those two numbers are a result of some pretty heavy-handed massaging in what the Bureau of Labor Statistics calls "seasonal adjustments".  Seasonal adjustments have always come under fire, especially lately, from a lot of well-respected economists, because the "adjustments" seem to be very large and, thus, questionably accurate.

Take, for example, the latest jobs report.  The headline says that 113,000 jobs were created with a resulting drop in the unemployment rate from 6.7% to 6.6%.  Now, to any logical observer, this makes perfect sense in that a falling unemployment rate must mean that some number of jobs had to have been created to lower the rate. But, if you dig deeper into the January jobs report, you would see a completely different picture when it comes to the unadjusted numbers.

According to the raw data in Table A-2, whites, which make up 79% of the workforce,  saw their unemployment rate go up in January by 9%; from 5.7% to 6.2%.  Yet, after seasonal adjustment, whites  remained the same at 5.7% as in December.  The raw data also said that blacks also saw their rate go up by 9%; from 11.6% to 12.6%.  After adjustment, their final number was 12.1%. While there is no adjustment data available for Asians, their unemployment rate went up 17% from 4.1% to 4.8%.  All three groups added together represent 96% of the workforce and all saw substantial losses in employment.  Yet, the final employment number says jobs were created and the unemployment rate fell.

Lastly, I would be remiss if I didn't include an absolutely horrendous fact that our President wouldn't want you to know when he's out there touting the lowest unemployment rate during his presidency.  That fact is that teen unemployment among blacks now sits at 39% (raw) or 38% after adjustment.  In the city of Chicago, the President's hometown, black male teens are at a unbelievable 92% unemployment rate.  Maybe that's why gang membership has risen 40% since Obama became President. 


References:

Has The Fed Been Fooled By Phony Jobs Numbers?: http://www.bloomberg.com/news/2013-09-24/has-the-fed-been-fooled-by-phony-jobs-numbers-.html

Table A: January Employment Situation Report: Seasonally Adjusted Results:  http://www.bls.gov/news.release/empsit.a.htm

Table A-2: January Employment Situation Report: Raw And Seasonally Adjusted Numbers by Race, Age, and Sex: http://www.bls.gov/news.release/empsit.t02.htm

New Urban League study finds 92 percent of African American male teens are unemployed: http://www.myfoxchicago.com/story/24486694/new-study-finds-92-percent-of-african-american-male-teens-are-unemployed

FBI: Gang Membership Up 40% Since 2009: http://www.thegatewaypundit.com/2013/07/confirmed-gang-membership-up-40-under-obama-violent-attacks-on-whites-up-18/