Nancy Pelosi stepped in front of the cameras to defend Barack Obama and the Democrats' record on job creation and the economy recently. The former Speaker of the House said the President had been "a job creator from day one." As if that statement alone didn't sufficiently prove her detachment from reality, she added that "if President Obama and House Congressional Democrats had not acted, we would be at 15 percent unemployment." (video here)
Nancy should have left the numbers to somebody who actually understands them, because a little analysis of the real tragic situation in the workforce reveals that the total number of unemployed in America is much closer to 15 percent than the former Speaker apparently realizes, and there is plenty more bad news, too.
It is true that according to the Labor Department's October 2011 report, 13.9 million Americans are unemployed by definition. However, that definition and calculation does not include the 6.57 million who have given up even trying to find a job, and are not considered as part of the total labor force. When both groups are included, a more accurate unemployment rate of about 13 percent results.
As the following chart demonstrates, the size of the working age population has increased almost 6.5 million since Obama took office. However, the total labor force has remained essentially unchanged.
In addition, for all the talk of jobs saved-or-created by Obama and the Democrats, the numbers tell a different story; nearly 2 million fewer people even have a job than when the President took office, and again, the available workforce is larger by 6.5 million.
A critical ratio in the above numbers is what the Labor Department calls the Participation Rate; the number of people employed or looking for work out of the total age-eligible population. Throughout the last decade, the Labor Department's statistics indicate that ratio held near or above 66%. The Participation Rate was 65.8% when Obama took office with the effects of the recession already being felt. The stark reality of this ratio means that about 4 million Americans who would normally be bringing home a pay check and adding to the total productivity of the nation are on the sidelines.
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A decline during a recession is expected, but the real fault with Obama and the Democrats lies in the inability to restore economic confidence such that jobs are once again available and Americans re-enter the work force. Not since the recession of the early 1980s when America was recovering from the Carter Administration's inept policies has the Participation Rate been so low.
Perhaps the most ignored statistical tragedy of Obama's failed economic policies is found in the Labor Department's tracking of people working "part time for economic reasons." Included in this category are people who want full-time jobs, but either have been cut back on hours or can't find full-time employment. These are the millions of Americans bringing home a piece of a paycheck instead of all that they'd like to provide for their family.
Again, it is totally normal that this number would increase at the start of a recession. However, as the following BLS chart shows, during the last decade slightly more than 4 million Americans were typically in this part-time employed category. That number more than doubled as the recession hit in 2008, but it has remained stuck at around 9 million for three years with recent months actually indicating an increasing trend yet again.
Number part time employed for economic reasons
Obama and Pelosi were the ones who promised upon passage of their ill-conceived $800 billion economic Stimulus in January 2009 that unemployment would stay below 8 percent. However, the unemployment rate blew past that self-imposed threshold the very next month and has never been close to that level since. Now, we are told to forget those earlier promises and projections and find satisfaction in their claim that if not for them, it might have been even worse.
Clearly, the economic policies that Barack Obama and Nancy Pelosi promised would pull America out of recession haven't worked, and all they have to offer is more government, more spending, and an insulting salvo that "it could have been worse" if not for them.
We're reminded of 1980 when another Democrat administration proved completely inept in dealing with a struggling economy and had lost all credibility with the voters. The Republican candidate for President explained that, "A recession is when your neighbor loses his job. A depression is when you lose yours. And, a recovery is when Jimmy Carter loses his." Ronald Reagan won that election and put in place policies that led to three decades of tremendous job creation and economic growth. Most importantly Reagan sparked a renewed sense of optimism and confidence in American Exceptionalism. The best cure for our struggling economy is not more-of-the-same from Obama; it is Election Day 2012.
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