So, let's recognize and celebrate the accomplishments of the last 8 years of a Presidency that UNITED us and trampled out the dreaded income inequality. Let us all rejoice at an unemployment rate that has fallen to 4.9%!
Doesn't everything feel so much better in America?
Or, at least the government is telling you everything is better....
In Jan 2008, when President Obama took office, the number of Americans in the workforce was over 136 million and unemployment was at 5%.
In April 2016, the unemployment rate hit 5% again. SUCCESS! Our economic woes are solved!!! We have achieved, what economists call, full employment....But....there's a little problem....
Again, in 2008, with a 5% unemployment rate, there were 136 million workers employed. In order to keep up with the number of new workers entering the labor force, we must add 145,000 jobs....each MONTH 1.
With 100 months spanning from January 2008 to April 2016, that means we needed 14.5 million new jobs created to once again reach the 5% unemployment rate.
Or, (doing the math) 136 million + 14.5 million = 150.5 million workers. We needed to have about 151 million workers in the labor force to reach a 5% unemployment rate. But, by April 2016, we only had 144 million people working (psst...look at the red chart). We are SEVEN and a half MILLION jobs short of where we should be.
How is this possible?
The Obama Administration and its defenders claim that as more older folks retire out of the workforce we don't need to create as many jobs to reach 5% unemployment. They go on to say that younger workers are staying in school longer and so they are not participating either. And, in fact, there are fewer workers in the labor force. The labor participation rate in this country is as low as it has been since 1978.
The labor participation rate, however, counts everyone over 16 years of age, unless serving in the military or doing time in prison. And so, if the older folks retire earlier, then yes, the labor participation rate can fall while unemployment also falls. And, if young workers stay in school rather than work, they can be removed from the unemployment measure as well.
Yeah, well, there's a little snag with this rationale from the Obama Administration....t'ain't true.
Both Pew Research 2 and the American Enterprise Institute 3 actually found that older Americans (measured as over 55 years of age), are actually staying in the labor force LONGER...not leaving sooner. And, as far as the young -- maybe they are staying in school because they cannot find a job and don't want to start paying back their student loans just yet. In other words, the drop in labor participation isn't caused by people voluntarily staying out of the labor force -- it's because the Obama economy sucks. (Ooops, sorry for begin so indecorous.)
This post goes a little "down in the weeds" but, I hope it clearly shows that we are being lied to about the "brilliant" Obama economy. We are also being lied to regarding how going back to the "old ways" is bad for the United States.
For a quick history lesson to show you why the old ways are sometimes the best ways look back at the labor participation chart. (Remember that the military and inmates are not counted.)
- From 1950 to 1953 we were involved in the Korean War. At the end of that war, there is an uptick in labor participation as G.I's return to work.
- Then, in 1955, we begin our involvement in Vietnam. That pleasant little soiree lasts until 1975. Again, another sharp uptick occurs as soldiers enter the labor force, but then, Jimmy Carter slows the economy and the rate stabilizes
- Ronald Reagan is elected in 1980. His tax cutting policies create incredible growth over his 8 years. At the same time, the Democrat Congress spends like drunken sailors and the deficit expands.
- 1988 George H.W.Bush is elected. He breaks his pledge to not raise taxes -- the economy sputters again.
- 1992, Bill Clinton is elected and promptly raises taxes...the economy continues to sputter for four years 4 until Newt Gingrich leads a Republican takeover of Congress. Gingrich and Clinton work together to cut taxes and cut spending. The economy revives, wages rise, the deficit drops. At the same time, Clinton adopts the socialist policy of Jimmy Carter known as the Community Reinvestment Act (CRA). This move eventually leads to the collapse of our economy in 2007 5,6.
- The attacks on 9/11 hit us hard and the economy slows. George W. Bush cuts taxes and reduces unemployment to 4.4% by December 2006. Democrats are elected to the House and Senate. They immediately raise the minimum wage. Unemployment begins to rise through 2007.
- In 2007, the CRA machine set in motion by Bill Clinton crushes our economy and the housing bubble explodes.
- In 2008, Barack Obama is elected. The economy is slow and unemployment hits its peak during his Presidency. Obama convinces Congress to allocate $787 Billion to help revive the economy. This creates a structural deficit that has doubled the national debt during Obama's tenure and the labor participation rate falls back to the rate of Jimmy Carter. Good job, skippy.
Really. Obama thinks you're dumb enough to believe the old policies of Reagan were bad for the economy.
Now you have an historical timeline to refute the incessant stream of lies coming from the party of hacked emails and fake unemployment reports.