04.12.2012 0

The real employment situation

NRD Editor’s Note: This post was originally published at TheHill.com.

By Rick Manning — Mark Twain famously misquoted British Prime Minister Benjamin Disraeli as saying, “There are three kinds of lies: lies, damned lies and statistics.”

The reported unemployment numbers prove the validity of the quote, even as the source is in dispute.

According to the U.S. Department of Labor’s Bureau of Labor Statistics, in March, there were 31,000 fewer people employed than in February, yet the politically useful unemployment rate went down to 8.2 percent: a decline that is sure to be played up in campaign commercials as evidence that the Obama economy is recovering.

Unfortunately, a review of the data behind the unemployment numbers reveals an entirely different story.

In spite of the overall non-institutionalized work-eligible civilian population increasing by 7.9 million since Obama became president, 150,000 fewer Americans have jobs today than in January 2009.

That’s right, the number of those eligible to participate in the workforce jumped by almost 8 million, yet fewer people have jobs today than the day Obama took office. I would not expect to see that statistic in his reelection campaign ads.

Most significantly, the percentage of people who are eligible to work who participate in the workforce has dropped by 1.9 percent.

To put this in perspective, if the labor participation rate had remained the same during Obama’s tenure in office as it was in January 2009, there would be 4.7 million more people counted in the workforce.

If these 4.7 million people had not dropped out of the workforce in the past three years, the unemployment rate reported by the Labor Department would be 10.8 percent. Somehow, I don’t think that the Obama campaign would be too excited by this number.

Among the many oddities in the March jobs report, one other one sticks out, as it directly contradicts the rosy weekly Labor Department reports on unemployment insurance claims declining.

The Labor Department’s monthly unemployment report, however, shows that the number of people who have been unemployed for five weeks or less actually jumped significantly in March.

This gets even worse for Obama’s contention that the jobs situation is improving, as the number of newly unemployed is 135,000 people higher than in March 2011. In fairness, the number of longer-term unemployed has gone down, but an increasing number of people newly unemployed (largely due to layoffs) is hardly a sign of an economy on a job-growth upswing. In fact, it may signal a slowing of hiring going into what is normally a boom hiring period for an economy in recovery.

No one wants the economy to continue in a long stall; that is disastrous for our nation. But it is important to differentiate between what has been a chorus of media cheerleaders (who were noticeably absent in 2007-08) extolling the “recovery” versus the reality of what the unemployment report actually reveals.

Ultimately, the political question is, will voters be fooled by happy talk about a top-line unemployment statistic that has ceased to reflect the nation’s employment reality, or will they reject it much as they have rejected the reported low inflation rate that gets contradicted every time they go to the gas station or grocery store?

Obama’s reelection might depend upon the answer to this question.

Rick Manning is the communications director of Americans for Limited Government and the former public affairs chief of staff at the Labor Department.

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