The Purpose of This Bl;og

By and large, liberals are very decent, kind, and compassionate people who genuinely want what is best. This should be kept in mind as we explore the Law of Unintended Negative Consequences near invariably resulting from Leftist big-hearted solutions to societal problems.

Wednesday, July 3, 2013

Obamanomics--Unemployment, Jobs, and Workforce

Since 2008, President Obama has made a number of encouraging and praise-worthy promises about unemployment and jobs. I will look at each separately and then combined, keeping in mind that while the President's intents have been admirable, his performance is what matters.


In 2008, Obama officials predicted that unemployment wouldn't rise above 8%. (see HERE and HERE and HERE) According to the National Review Online, "By the end of 2010, he [Obama] promised, unemployment would have dropped to 7.25 percent. Furthermore, White House economists forecast that without ARRA spending, the unemployment rate would increase from 7 percent to 8.8 percent." The Obama administration also intimated that the so-called "stimulous package" (ARRA) would reduce unemployment to nearly 6% by the end of his first term. (See HERE and HERE and HERE and HERE),

However, even though unemployment conveniently dropped slightly below 8% a month or so before the 2012 presidential election (see HERE), based on faked report (see HERE and HERE and HERE), it was two years later and more than 2% higher than promised, and it had previously risen above 8% and remained above that benchmark level for 43 months, reaching as high as 10% in 2009. (ibid)

Hidden beneath these numbers are the depressing statistic on longterm unemployment.  John Merline points out that: "As of July 2012, there were 811,000 more long-term unemployed than when the recession officially ended in June 2009, and there were 412,000 more who had given up looking for work." (See HERE) "

On the positive side, in July of 2013, "the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 4.2 million. These individuals accounted for 37.0 percent of the unemployed. The number of long-term unemployed has declined by 921,000 over the past year." (See HERE) And, the unemployment rate was 7.4%, down from 7.6 in June. (See HERE)

More depressing still, the unemployment numbers that are typically reported don't represent actual unemployment rates (see HERE). Depending upon what is factored into the unemployment equation, the real unemployment rate ranges between 11 to 29%. (See HERE and HERE and HERE and HERE and HERE)

Also, the unemployment numbers account for everyone who is gainfully employed, whether part-time or full time, low income or high, and this on a one-to-one basis. This means that even though full-time, high-paying jobs may have been lost in droves, unemployment will still show as dropping when more part-time, low-paying jobs are created. As such, a decline in unemployment may mislead people to think the economy is improving when it may actually be getting worse.

According to Tyler Durden, in an article published in November of 2012, the "number of part-time people employed for economic reasons soared by 582,000 to 8,613,000, the most since October 2011, and the largest one month jump since February 2009." (See HERE) "Back in December 2010 he wrote: 'It is surprising that over the past several years very little has been said in the popular media about the fact that America is slowly but surely transforming from a full-time to part-time employed society.'...Durden looked at last week’s BLS report and found something the media totally ignored: Of the nearly one million jobs the economy has created since the first of the year, only 222,000 of them were full-time. Put another way, three out of four jobs created since January 1 have been part-time." (See HERE)

This may be particularly problematic for baby boomers, though some analysts are seeing a positive spin. (See HERE)

The good news for 2013 is, "The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged at 8.2 million in July [which is 400k less than the previous year]. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job." (See HERE)

Experts believe that the transformation towards part-time workers may have been spurred, in part, by another Obama policy--specifically, the employer mandates of Obamacare. (See HERE and HERE and HERE and HERE and HERE)


Over the last half-decade Obama has made a number of general statements about jobs, not the least of which was: "Jobs must be our number-one focus" (see HERE and HERE) and  "I will not be satisfied until everyone who wants a good job, are offered some security, has a good job." (ibid)

This is great as intents go.

He has also been quite specific. In 2008, candidate Obama committed to creating 2.5 million new jobs by 2011. (See HERE and HERE and HERE and  HERE) "In 2009, President Obama promised that the American Recovery and Reinvestment Act [ARRA] would 'create or save' 3.5 million jobs over the next two years." (See HERE)  He has since pledged to create 7 million new jobs (see HERE), five million of which would be green jobs, and this by the end of the decade (see HERE and HERE).  And,  U.S. News reported, "Obama promised the stimulus would not only have a large impact but also an immediate impact. Said the president-elect, 'I'm confident ... our 21st century investments will create jobs immediately,' adding, 'We've got shovel-ready projects all across the country.'" Furthermore, he intimated that he will create good jobs that pay well and can’t be shipped overseas.” (“Remarks By The President And The Vice President On The American Recovery And Reinvestment Act,” 4/13/09, as reported HERE)

Yet, based on Bureau of Labor Statistics, between 2009 and 2010, there was a net loss of more than 4 million jobs. And, even if you add in 2011, there was still a net loss of nearly 2 million jobs.

As for the jobs coming immediately and shovel-ready, in his own words, “[M]r. Obama reflects on his presidency, admitting that he let himself look too much like ‘the same old tax-and-spend democrat,’ realized too late that ‘there’s no such thing as shovel-ready projects…’” (Michael D. Shear, “President Obama Looks Forward – And Back,” The New York Times’  “The Caucus” Blog, 10/13/10, as reported HERE)

“The green jobs subsidy story gets more embarrassing by the day. Three years ago President Obama promised that by the end of the decade America would have five million green jobs, but so far some $90 billion in government spending has delivered very few.” ( The Wall Street Journal, 10/11/11, as reported HERE) (See also HERE and HERE and HERE and HERE)

[Update 8/17/2015: Green Jobs in California] {Update 8/19/2015: 'Clean Energy Jobs Act' Did Little But Enrich Consultants]

Worse yet, Obama's green energy policies have prevented job creation and squelched the opportunity for generating considerable revenue that could improve the economy and help offset some of the national debt. According to Dan Kish, Senior Vice President of the Institute for Energy Research, indicates: "In fact, annual revenue collections for sales and leases, royalties, and rentals on federal government lands are down over $12 billion per year since 2008. And that is just the direct revenue. It doesn’t include revenues from increased economic activity. If the government would just allow further exploration on federally-controlled lands and waters, that would add somewhere between $24 billion to $85 billion more per year. A recent Louisiana State University and Wharton study conducted for the Institute for Energy Research estimated that simply allowing access to these areas would create between 552 thousand and nearly two million additional jobs over the next 37 years. It would also generate an estimated $2.7 trillion in additional revenue over that same time period." (See HERE)

"Finally, the president should announce today that he's going to reverse his decision on the Keystone XL pipeline. This pipeline would produce 20,000 construction jobs and 100,000 indirect jobs, and it would provide a much-needed transportation line between oil refineries along our Gulf Coast and production facilities in Canada, not to mention the booming Bakken oil fields of Montana and North Dakota. Our friends to the north have been reliable and steadfast trading partners, and the president should be making this pipeline decision on policy grounds instead of cheap political appeals to his liberal base." (See HERE)

About jobs not being shipped overseas, the "Stimulus Projects Created Thousands Of Jobs In China. 'A Chinese company called A-power is helping to build a massive $1.5 billion wind farm in West Texas. The consortium behind the project expects to get $450 million in stimulus money.  Walt Hornaday, an American partner on the project, said it would create some American jobs. ‘Our estimation,’ he said, ‘is that we are going to have on the order of 300 construction jobs just within the fence of the project.’ But that’s in addition to 2,000 manufacturing jobs — many of them in China.'” (ABC News, 2/9/10 as reported HERE)  And, "ABC News report: eight out of every ten dollars spent on green stimulus projects going to foreign firms, Sen. Schumer admits it is a problem. (ABC News, “Green Stimulus Jobs Go To China,” 2/9/10 as reported HERE) (See also HERE and HERE and HERE and HERE)

According to Forbes, "During the campaign, we’ve heard the President say that, during his administration, 5 million new jobs have been created. Actually, the correct figure is 4.8 million. However, this calculation eliminates all months in which jobs were lost. In other words, it only counts months in which job creation was positive and eliminates the negative months." (See HERE) When the negative months are added in, the net new jobs created during Obama's first term was 194,000, or an average monthly rate of 4,311. (ibid)

Putting this somewhat in perspective using even the inflated jobs numbers: "Since [President Obama’s] inauguration, the US has generated just 841,000 jobs through November 2012, a number [that] is more than dwarfed by the 17.3 million new [food stamps] and disability recipients added to the rolls in the past 4 years.(See Zero Hedge, as reported HERE)

And, just as unemployment figures hide certain realities, job reports don't tell the whole story. All they indicate is an estimation of people newly employed during a given month by the surveyed businesses. (See HERE) Neither the unemployment figures or the jobs reports give a full or accurate picture of what has happened with the entire workforce and how it has impacted the national economy and public policy.


To me, the more telling statistic is the overall workforce participation rate, which calculates the proportion of the working-age population (older than 16) who are actively working. Under Obamanomics and other Leftist policies, not only has jobs shifted from the private to the public sector at the cost of trillions of dollars (see HERE), and from full-time to part-time, but the workforce participation rate declined to its lowest levels since 1979 (see HERE and HERE)--and this not because of retiring baby-boomers as some have mistakenly supposed (see HERE), but, among other reasons, as a result of bad economic policies and slow growth. (see HERE)  The labor force participation rate peaked in 2000 at 67.3 percent, and as of May 2013, it was down to only 63.4 percent. (See HERE and HERE) "Total employment fell for two years straight, from a peak of 138 million workers in Jan. 2008 to a low of 129 million workers in Feb. 2010." (See HERE) As of June of 2013, only about 145 million people, or less than 50% of the U.S. population, were actively working to one degree or another. (See HERE and HERE) In July, the labor force participation rate was 63.4 percent, down from 63.5 in June. (See HERE)

In other words, because of Obamanomics, less and less people were working in either the public or private sector. Instead of putting more people to work as promised, Obamanomics caused the opposite Leftist LUNC to occur.

To make matters worse, as mentioned above, a growing portion of the workforce is part-time. So, not only are less and less people working, but those who are working are working less hours.

The significance of this is that with fewer people working, and fewer people working full time to pay government expenses and entitlements, and because of Obamanomics, more people were and are now collecting work-related entitlements and increasing government expenses, and thus expanding government. With unemployment on the rise, the draw on unemployment insurance jumped from around $40 billion in 2008 to over $150 billion in 2010 (See HERE and HERE and HERE), and has cost nearly half a trillion dollars since Obama took office. (See HERE)

And, instead of covering the jobless for just 25 weeks as originally legislated (see HERE), thus giving people enough time to find work without becoming complacent, Obama and the Democrat congress extended unemployment benefits up to as much as 99 weeks, leading some analyst to view the extension as an incentive to leave work and a disincentive to find work. (See HERE and HERE and HERE)

The irony is that the extension promised to produce 300,000 jobs, yet, as one author put it "Today, the Congressional Budget Office released a report informing readers that extending unemployment benefits for a year, an outlay which would cost the federal government $30 billion, would, because of its allegedly stimulative impact, generate 300,000 jobs. Even if true, neither the CBO, nor the Associated Press in covering the report, noted that this result works out to a cost $100,000 per job. Bravely assuming that each new job created pays $40,000 per year, that's a $60,000 loss in value received compared to money spent. The government's tax take at all levels on that amount of earnings is likely about $10,000 or so." (See HERE)

In short, the Leftist LUNC here is that there are less and less people working, and working less and less hours, to pay for more and more people to receive unemployment benefits that inadvertently encourage less and less people to work and keep jobs to pay for said benefits.

[Update 08/08/2015: According to the Bureau of Labor Statistics, a record 93.8 million Americans, or 37.4% of the U.S. population are out of the labor force. This is up 144,00 people from the previous record one months earlier. (see HERE and HERE) The vast majority of those not working, are women. (see HERE). To make matters worse for the female labor force, all the supposed gains in employment since the recession in 2008, have been lost to foreign workers. (see HERE). See also this article3 on Obama's Unemployment Numbers are Bogus, and Here is the Proof]

[Update 09/07/2015: Workforce Participation Rate Stuck at 38-Year Low for 3rd Month in a Row, I also update the unemployment and jobs numbers HERE]

For an explanation of why these Leftist LUNCs may occur, please see: Gov: Wrong tool for the Right Job:  Strength in Numbers, Cold Nanny, and The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting. Other explanations will be added as they are posted.

No comments:

Post a Comment