“53 Percent of All Young College Graduates in America are either Unemployed or Underemployed” ~ The Economic Collapse
* By: Larry Walker, Jr. *
It is a fact that the U.S. economy has lost a total of 4,884,000 Nonfarm jobs since the beginning of the Great Recession. But according to the National Bureau of Economic Research, the recession officially ended three years ago. We would all like to believe that things aren’t so bad, that the glass is half full, but for many the American Dream appears to be fading away. The question we should be asking ourselves, three years into this economic recovery, is whether we are creating a sufficient number of jobs each and every month: (1) to keep pace with population growth, and (2) to recover the number of jobs already lost? Today, we will provide the answer.
The Working-Age Population
The Civilian Non-institutional Population, or as I prefer to call it, the Working-Age Population, includes persons 16 years of age and older residing in the 50 States and the District of Columbia, who are not inmates of institutions (i.e. penal and mental facilities, or homes for the aged), and who are not on active duty in the Armed Forces. According to the Bureau of Labor Statistics, Table A-1, one month before the recession began, the working-age population totaled 232,939,000, and as of May 31, 2012 it had grown to 242,966,000. Thus, the working-age population has increased by 10,027,000 persons since the start of the recession, and by 7,931,000 since they keys were handed to Barack Obama (see chart below).
Since we know that the economy had already lost a total of 3,514,000 jobs during the last 13 month’s of President Bush’s term, that it has shed another 1,370,000 jobs since Barack Obama’s inauguration, and that the working-age population has grown by 10,027,000 persons over the same period, the question is how many jobs must we create each and every month in order to catch-up? And in light of the answer, how does anyone get away with a statement like the following: We’ve created 4.3 million new jobs over the last 27 months, over 800,000 just this year alone. The private sector is doing fine?
In Paul Krugman’s December 2009 article entitled, The Jobs Deficit, he proposed a rather useful benchmark for the level of jobs the U.S. must create each month to really matter. As of November 2009 we had lost about 8.4 million jobs from the time the recession began. He began with the Economic Policy Institute’s (EPI) estimate that we need to add 127,000 jobs per month just to keep pace with population growth. That very same month, EPI pointed out that when you put together the number of jobs lost since the recession, along with the number required to keep pace with the population, that in order to return to pre-crisis unemployment within two years we needed to add 580,000 jobs a month.
Krugman conceded that there was no way this was going to happen within two years. So he proffered a more modest goal: a return to more or less full employment in 5 years. According to his formula, in order to keep up with population growth over those 7 years (December 2007 to December 2014), “the United States would have had to add 84 times 127,000 or 10.668 million jobs.” Krugman stated, “If that sounds high, bear in mind that we added more than 20 million jobs over the 8 Clinton years.” He continued, “Add in the need to make up lost ground, and we’re at around 18 million jobs over the next five years — or 300,000 a month.”
So using Krugman’s 300,000 jobs per month benchmark beginning in December 2009, I have created the following chart showing where we are today (in red), versus where we would be if we were truly keeping pace with population growth and making up for the jobs lost due to the recession (in blue). As you can see, we are currently more than 5.4 million jobs short of where we need to be.
The Great Recession officially ended in June of 2009 (a fact that many seem to gloss over), and as of November 30, 2009 it had consumed 8,403,000 jobs. A total of 3,514,000 had already been lost when President Bush handed the job off to Barack Obama, but an additional 4,889,000 jobs were lost during Obama’s first 11 months. It was at this point that Paul Krugman set forth this reasonable benchmark. We have needed to create 300,000 jobs per month, since December 2009, to keep up with population growth, and to recover the jobs lost up to that point. However, where we find ourselves today is 5,481,000 jobs short of the mark.
Yet, it was on June 8, 2012 when Barack Obama declared, “We’ve created 4.3 million new jobs over the last 27 months, over 800,000 just this year alone. The private sector is doing fine.” However, what he was talking about was the number private sector jobs recovered since March 2010. What he conveniently forgot to mention is the fact that we also lost 5,135,000 Nonfarm jobs during his first 14 months in office. What about that Mr. President? In fact, had he bothered to include the number of public sector, or government jobs, his statement would have been more accurately stated as follows: ‘We’ve recovered 3,765,000 Nonfarm jobs over the last 27 months, but we lost 5,135,000 during my first 14 months in addition to the 3,514,000 lost under President Bush, so we have a long, long way to go.’
Yes it’s true, we have lost 1,370,000 jobs since Barack Obama was sworn into office, and that’s on top of the 3,514,000 jobs lost from the time the recession began until President Bush handed the keys to Mr. Obama. But the bad news is that not only have we suffered the loss of 4,884,000 Nonfarm jobs since December of 2007, but we must also account for the fact that during the current recovery, we are 5,481,000 jobs short of where we ought to be. At this point we need to not only make up for the 5,481,000 jobs we are short, but we need to do so while creating an additional 300,000 jobs per month by the end of 2014. In other words, if we apply Paul Krugman’s benchmark, we now have 31 months left to create 14,781,000 jobs (9,300,000 + 5,481,000). That means we need to seriously up the pace from last month’s gain of 69,000 jobs to 476,806 jobs per month.
When Barack Obama stood before a teleprompter this month, and gloated about how well his policies have done over the last 27 months of his 41-month term, he wasn’t being honest with the American people. His dishonesty regarding the economy, among other things, is why he deserves to lose this election by a landslide.
Labor Force Participation Ages 16 to 19
Like many Americans my age, I started working at the age of 16. Although my first job was only a part-time summer job, it was my first, and thus the beginning of my personal quest for the American Dream. My dream at the time was to open a savings account, buy a car (or at least pitch in on the gas), buy my own food and clothing, gain a sense of independence, and learn to be personally responsible.
There are kids who were 12 years old when the recession commenced, who are now 16 and looking forward to their first summer job, but if they can’t find work, they will miss out on some valuable lessons in the quest for the American Dream. There are others who are now 20 years of age who couldn’t find work four and a half years ago, and are still looking today. And there are yet others who were just starting college when the recession hit. We learned this month, that among recent college graduates, 53 percent find themselves either unemployed or underemployed. The dream is fading.
The Labor Force Participation Rate measures the Labor Force as a percentage of the Civilian Noninstitutional Population. According to the Bureau of Labor Statistics, Table A-1, the labor force participation rate for 16 to 19 year olds averaged 54.5% in 1976, when I was 16 years old (see chart above). It stood at 41.5% prior to the recession, but had declined to 38.5% by the time Barack Obama was sworn in. It has since continued in decline to an all time low of 34.2% as of May 31, 2012. So when I was 16, a young person had about a 50/50 shot at finding a job, but for today’s youth the chances are more like 30 out of 100.
The American Dream appears to be fading into the sunset, but according to Barack Obama, the private sector is doing fine. Apparently the economy is doing well enough in his eyes that last Friday was a prefect time for him to singlehandedly grant amnesty to the children of those who have crossed our borders illegally. Oh, give me a break! How does Obama get away with it? He gets away with it because Democrats let him. You all better wake up. You’re either part of the solution, or part of the problem. If you’re so stuck on a political ideology or party brand, that you can’t see the light of day, then God help you. God help us all. If you’re still on the fence, then what are you waiting for? It’s time for a plan that works, not four more years of lecturing, finger pointing and Constitutional violations.
The bottom line: After three and a half years of Barack Obama, we find ourselves 5,481,000 jobs in the hole. At this point we must not only make up this shortfall, but must do so while creating an additional 300,000 jobs per month. In other words, if we apply Paul Krugman’s reasonable benchmark, we have 31 months remaining to create 14,781,000 jobs (9,300,000 + 5,481,000). That means we need to seriously up the pace from last month’s anemic 69,000 jobs to 476,806 jobs per month. But that’s not going to happen until Barack Obama is sent back to Chicago.
Obama Jobs Scorecard, Part 2 : Beyond the Private Sector
Obama Jobs Scorecard, Part 1 : The Private Sector