This has been a tough few years for job creation. The Great Recession was the worst downturn in employment in recent memory, and though the recession “officially” ended back in June of 2009, unemployment is still at a crisis level of 9.1%, and the number of long-term unemployed is at levels that would have been unheard of prior to this downturn.
President Obama has finally turned his focus towards bringing down the level of joblessness, but it seems highly likely that the “America Jobs Act” is likely to go nowhere in Congress. The focus in Congress has been on bringing down the deficit through cutting spending. Such budget cuts lead to even higher levels of unemployment.
So how does the job creation record of Obama stack up against previous presidents? Not very well, but there have been other periods of poor job creation in our past. There is a question as to how to measure the job creation record, and even some questions as to just how much any president can do, particularly in the context of a divided government.
How Performances Are Measured
Clearly with a growing population over time, just comparing the number of jobs created would tend to be unfair to those presidents of the relatively more distant past when the population was much smaller. Thus it makes sense to look at the percentage change in employment over a presidential term. Obama, of course, has not finished a full term.
Thus, in the table below I present the totals for the full term, and also the percentage gain (or loss) per month on average for the full-term (the full four-year term divided by 48, or in Obama’s case 32).
The second question is, "when do you start the clock?" The U.S. economy is very large, and does not turn on a dime. The president is inaugurated two thirds of the way through January, and the economy is not going to be responding to his economic policies the very next day. Thus it seems equally valid to me to look at a lag of a few months, and ascribe the job growth (or loss) for the first few months of a presidential term to the previous president.
Thus the tables below shows things both measured from January through January four years later, and also from April of the year the president takes office through the April four years later (the per month numbers for Obama in that case are divided by 29). Clearly this is less of an issue for a president starting his second term than a new president, particularly one of a different party than his predecessor. Arguably the lag period should be longer than three months.
I start with the Eisenhower Administration. I show total job growth and also break it down between private sector job creation and government jobs. The government jobs are at all levels, Federal State and Local, and include education.
While I do not want to disparage the work done by government employees, much of what they do is vital to our society, private sector job creation is ultimately more important. Government-sector jobs have to be paid out of taxes (or deficits at the Federal level), and private-sector jobs provide the taxes that make the public sector jobs possible.
Some Surprising Results
I suspect that the numbers will surprise people. Even though in some respects, the 1950’s are considered sort of a golden age for the U.S. economy, job creation under Ike was actually rather anemic. That is particularly true of private sector jobs. Ike oversaw a very large expansion of government jobs.
The 1960’s are remembered mostly as a time of social turmoil in this country, but were also the time of the best sustained job creation in our post-war history. However, government job creation was particularly robust.
Obama has actually presided over a very large drop in government jobs. This is particularly true if one uses the April-to-April data. His private sector job creation record improves dramatically if the April data is used, though it is still anemic at best, but he moves from being the worst when measured from January, losing 0.051% of private sector jobs per month, to the fourth worst, after Ike’s second term and both of George W. Bush’s terms.
Jimmy Carter in particular has gotten a bum rap when it comes to economic performance. He presided over the second-best job creation in the post-war period, only behind LBJ. That is true for both total job creation and private sector job creation. His government job creation record was slightly above average when measured from January, and slightly below average if measured from April. However, the big economic problem under Carter (like the Nixon/Ford administration before him) was inflation, not unemployment.
Job Growth Under Reagan
Reagan’s first term was mediocre at best in terms of total job creation and only slightly above average in terms of private sector job creation. However, he was the only president before Obama to actually preside over a decline in government jobs, at least when measured from January, and the lowest prior to Obama if measured from April.
His performance in his second term was notably better, on both the total and the private sector. However, in his second term, Reagan — remembered as a free market/small government icon — actually presided over greater-than-average government job creation, regardless of the starting point. The starting point makes the least difference in that case because it was both a second term, and is successor was his Vice President.
While the level of government job creation in Reagan’s second term was significantly lower than most of the presidents who preceded him, no subsequent president has come close to the number of government hires.
Of course, the government does spend on lots of things other than government employees, and the numbers shown are for all levels of government, not just the Federal level. However, it is still a good proxy for the amount of growth of government involvement in the economy.
Job Creation After Reagan
Clinton’s reputation as a good job creator seems fully justified, and particularly so on the private sector side, but not quite as good as either Johnson or Carter. Both Bushes were simply awful when it came to job creation — particularly private sector job creation.
Given how the economy was falling off a cliff when Obama took office, it is not surprising that George W. Bush’s second term performance gets significantly worse, and Obama’s gets significantly better if the April starting point is used. That is particularly true when it comes to private sector jobs. However, regardless of how you measure it, job growth has been poor.
Here is the per month data presented in graphical form, first measured from January and second measured from April. Unfortunately, you will have to interpolate to get all of the presidential terms.
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