Liberals on the left tout the dropping unemployment rate as a sign of the “recovery.” Conservatives on the right maintain there is no “recovery.” The latest jobs report illustrates how both sides claim to be correct:
The headline figures for the April employment report finally demonstrate strong labor market growth. A deeper dive into the report, however, shows it remains too early to uncork the champagne.
On the surface, both the payroll and the household survey reported good news. Employers added a net 288,000 payroll jobs while the unemployment rate fell by 0.4 percentage points. April experienced the fourth largest growth in payroll jobs and ties for the largest drop in unemployment since the recession began in 2008—very welcome news for struggling workers.
However, this large drop in unemployment occurred because of an enormous number of Americans simply giving up looking for work. In April, an estimated 800,000 Americans simply left the labor market. As a result, the labor force participation rate dropped back to 62.8 percent—tied for the lowest rate since the 1970s. Fewer prospective workers, not more jobs, caused the decline in unemployment.
So, the situation we have here is that the unemployment number goes down (yay, say the liberals), not because of the big increase in jobs but rather because of so many people giving up even looking for a job in this abysmal non-recovery (told you so, say the conservatives). Now, while both are technically correct, which side do you think has the better grasp of the situation? Liberals are putting lipstick on a dead pig, are they not?
Given the nature of the short term fluctuations and “noise” in the numbers, the best way to determine the trajectory of the economy is to look at several months averaged together, and that trend points to continued job losses. Plus, keep in mind that the 288,000 jobs supposedly added in April is still far short of the 400,000 needed to maintain the economy in its current size. If any actual growth is to occur the jobs added would have to be above that number. So, we have a clear instance of the headlines saying one thing, but reality saying quite another.
This is reflected in a recent Greenberg/Carville memo to fellow Democrats, advising them to avoid using the “R” word when campaigning over the next few months:
Democrats have to be hard-hitting and focused on the economy. As a start, Democrats should bury any mention of “the recovery.” That message was tested in the bipartisan poll we conducted for NPR, and it lost to the Republican message championed by Karl Rove. The Democratic message missed how much trouble people are in, and doesn’t convince them that policymakers really understand or are even focusing on the problems they continue to face. That framework gets in the way of a direct economic message.
Charlie Cook, one of the leading election prognosticators in the country, concluded thus:
The Democratic candidate says: The economy is recovering, but not for regular hardworking people. Incomes of CEOs and the top 1 percent are soaring, but in the real economy, people are working harder at jobs that don’t pay enough to live on. We have got to do something. We must raise the minimum wage, help people afford job training and college, build a 21st-century infrastructure, and stop unfair trade agreements that wipe out American jobs.
The Republican candidate says: The Obama administration has had six years to get this economy going and its policies haven’t worked. Monthly wages are going down, and there are not enough good-paying jobs to create opportunities for struggling families. We need to start making things in America again, and stop excessive regulations that are hurting the economy. It’s time to produce more energy here at home, and educate people for the jobs of the 21st century.
Each paragraph sums up rather nicely the argument that each side makes, with the Republican argument edging out the Democratic by 2 points, 48 percent to 46 percent (which is within the 3.18 percentage point margin of error for the survey of 950 voters).
My thought has long been that back in 2009 and 2010, even though many Americans may have been sympathetic to the idea that changes should be made in our health care system, the public wanted the focus at that time to be on job creation and the economy, which polling at the time indicated was absolutely the case. To the extent that Washington seemed obsessed with health care, voters wanted the government’s focus on jobs, and this rubbed them raw. To this day, Americans don’t think the economy has been effectively dealt with. Thus, maybe Democrats should avoid the “R” word.
Damn that reality. It really gets in the way a lot.
There’s my two cents.