Note: This editorial has been updated to include today’s employment data.
After the Bureau of Labor Statistics report today about job growth and the unemployment rate, you can bet that President Joe Biden will use it as an opportunity to brag about his superb handling of the economy. The one thing Biden is good at is lying with statistics.
Biden will probably claim that he’s overseen a record number of new jobs – the most in history. The press will dutifully regurgitate White House talking points.
But the numbers getting bandied about these days about job growth and unemployment are wildly misleading because they ignore important bits of context. Such as:
- The pace of job growth slowed considerably once Biden started “rescuing” the economy.
- It took just nine months under President Donald Trump for the economy to regain 57% of the 22 million jobs lost during the COVID lockdowns. It took 17 months under Biden to regain the other 43%.
- The economy was adding jobs at an average of 1.3 million a month in Trump’s last nine months in office. In the first nine months of Biden’s term, job growth averaged 620,000.
- As a result, job growth is now behind the pace set by most recoveries since 1948, according to the Minneapolis Federal Reserve Bank. Nearly three years after the COVID recession officially ended, we are still just 2% ahead of the previous employment peak. At the same point after the 1981 recession, there were 3.5% more jobs. Three years after the 1969 recession, the job market was 5.7% bigger.
- The jobs picture would be far worse had it not been for Republican-run states that defied the Biden administration’s intrusive COVID policies. By mid-2022, red states were 350,000 ahead of their pre-COVID highs, while blue states were still 1.3 million jobs short of where they were before the COVID lockdowns.
But what about the low unemployment rate Biden brags about?
In February 2020, just before the COVID insanity struck, unemployment had fallen to a 50-year low of 3.5%. Then it shot up to 14.7%. The March 2023, the unemployment rate was back down to 3.5%.
Surely that is good news, right?
Not so fast.
Over those same three years, the working-age population grew by 6.6 million. For unemployment to be back down to 3.5%, you’d think there’d be 6.6 million new jobs created.
But the number of people employed went up by only 2.1 million over the past three years.
So where did the other 4.5 million people go? Most of them simply dropped out of the labor force. They don’t have a job, and they aren’t looking for one.
And because the unemployment rate counts only those who are actively looking for work, the more labor-force dropouts there are, the lower the official unemployment number is.
If those millions of people hadn’t given up looking for work, they would be counted as unemployed, and today’s unemployment rate would be 5%, not 3.5%.
That’s not terrible, but it’s hardly anything to brag about. And it’s Biden’s policies that have suffocated what would have been a much stronger jobs recovery.
The first thing Biden did when taking office was to hand out wads of cash, extend unemployment bonuses, expand Obamacare subsidies, and strip away welfare work requirements, while throwing the job market into chaos with his vaccine mandates and regulatory onslaught.
Put simply, he paid people not to work, often handsomely, while punishing job creators.
A recent analysis by the Committee to Unleash Prosperity found that in nearly half the states, unemployment benefits and enhanced Obamacare subsidies added up to more than the median household income. Why work, when staying home pays better?
To make matters worse, those with jobs have been getting pay cuts thanks to the high inflation rates that Biden’s $2 trillion “rescue plan” unleashed. While real average hourly earnings went up under Trump, they’ve been steadily falling ever since, and are now 4% below where they were when Biden took office.
This is the reality of the job market today. It’s not pretty. It’s not what Biden and the mainstream media want you to hear. But it’s what families are struggling with every day.
— Written by the I&I Editorial Board