Is Obama’s recovery better than the Reagan economy?
There is a reason that Democrats are focusing on just about any issue other than the economy. Despite promises that the unemployment rate would be 5.6% today with the passage of the 2009 stimulus bill, it’s actually at 8.3%. Many have pulled out of the labor market entirely and economic forecasts are constantly being revised downward.
With all of that, it’s odd that anyone from President Barack Obama’s campaign would claim that they’ve been good on jobs. It’s even more odd that Stephanie Cutter, a spokewoman for Obama’s campaign, would say that the current recovery is better than that of Ronald Reagan (emphasis mine):
Well, I think that worker probably has a good understanding of what’s happened over the past four years in terms of the president coming in and seeing 800,000 jobs lost on the day that the president was being sworn in, and seeing the president moving pretty quickly to stem the losses, to turn the economy around, and over the past, you know, 27 months we’ve created 4.5 million private sector jobs. That’s more jobs than in the Bush recovery, in the Reagan recovery, there’s obviously more we need to do, and as I said to Mika at the at beginning of the program, I think that unemployed worker probably sees one person in this race trying to move the country forward and that’s the president.
Just last week, Veronique de Rugy took a look at job creation dating back to 1945, finding that jobs numbers under Reagan totaled 16.1 million; only Bill Clinton has a better number. But Obama’s numbers are, well, terrible given that there is still a net job loss of 316,000. Political Math has also looked at this, finding slightly better numbers for Obama, seeing 100,000 jobs created (as of May 2012) during his presidency. Reagan’s numbers are also slightly better, at 16.7 million jobs created.
There are obviously some caveats. Cutter specifically mentioned “private sector jobs.” It’s true that the economy has created over four million jobs since February 2010, but we’re still below pre-recession levels. According to the Burean of Labor Statistics (BLS), average private sector employment in 2007, before the recession hit, was 115.6 milloon jobs. It was 111.8 million in 2008. In the first seven months of this year, private sector employment has averaged 110.9 million.
That’s not entirely on President Obama, who did indeed inherit deep economic troubles, but the net-job gains are tepid when compared to pre-recession levels. Perhaps that’s not fair, but Obama has served nearly a full term and the economic policies he has pushed have caused more headaches than jobs.
The other is that Reagan served eight years, where as Obama has been in office for just less than a full term. Putting aside Reagan’s numbers mentioned above, BLS data show that a net-gain of 5.2 million jobs were created during his first term.
The difference between Reagan and Obama is that Reagan wasn’t facing a jobs deficit when he came in office. However, Reagan also faced a recession during the first two years of his term, and private sector employment dropped from 74.7 million in February 1981 to as low as 72.7 million in December 1982.
It was during Reagan’s second term when private sector employment really took off — in total 14.6 million jobs were created during his eight years in office. Not many are going to look at the low point during his first term and argue that the economy under Reagan really created 7.2 million jobs from the aforementioned low-point in December 1982 to January 1985 and expect to be taken seriously.
James Pethokoukis has offered his own take on Cutter’s comments over at this blog, noting that the Reagan recovery — post-early 80’s recession — has been vastly better than Obama’s:
From the end of the recession in June 2009 through July 2012 — the first 37 months of the Obama recovery — the U.S. economy has generated 2.7 million net new jobs. From the jobs low point in February 2010, the U.S. economy has generated 4 million net new jobs.
From the end of the 1981-82 recession through the end of of 1985 — the first 37 months of the Reagan recovery — the U.S.created 9.8 million net new jobs. And if you adjust for the larger U.S. population today, the comparable figure is more than 12 million jobs.
Another of way of assessing the U.S. labor market is by looking at the employment-population ratio, a simple measure that looks how many Americans are working as a share of the population (or what the Labor Department calls the civilian, non-institutional population.)
During the Reagan Recovery, that ratio increased. During the Obama Recovery, that ratio has been dead in the water.
It’s hard to compare these two presidents because they both faced different challenges, but look at the claim on its base, it doesn’t add up. But we’re still operating at a net-loss in of private sector jobs, some 1.4 million. At the rate the economy is creating jobs — remembering also that 150,000 jobs are needed to keep up with new workers entering the labor each month, it’s going to take some time for the economy to catch back up.