A year ago Republicans were complaining that President Barack Obama’s economic recovery was a big disappointment, his stimulus program a giant failure, and their mantra then as it is now is “where are the jobs?”
All the while ignoring, however, economic analysis that shows that but for the incredible shrinking public sector that imploded following eight years of George W. Bush’s presidency, which took the nation from a robust budget surplus to a demanding deficit, the private sector has rebounded quite nicely and is by some accounts back to pre-recession levels.
Forever in denial that President Obama stepped into the Oval Office just as the worst economic recession since the Great Depression of the 1930s had debilitated a nation to a deeper and greater degree than any recession before it, Republicans, it seems, are in denial of two other facts: Government does create jobs, and when government loses jobs, as it mostly has at the state and local levels, the drag from shrinking public payrolls acts like a sea anchor, it slows forward progress.
In a report titled Comparing the Recovery to the Recession by Major Industry Sector and published by Economic Modeling Strategies Inc. [EMSI], data derived from web-based labor market data and analyzed to look at jobs by major sector or detailed industry, big recovery winners are leisure and hospitality jobs, while declines in state government jobs continue.
Over the last four years, ever since the U.S. officially moved into recovery mode in 2009, the big picture, according to EMSI, is that the nation now has slightly more than 140 million jobs [not including self-employed workers], which is up 4 percent from 2010, when the total was 134.5 million, but down 1 percent since 141.8 million in 2007.
As Joshua Wright of EMSI points out, “The glaring exception is government, which has dropped over 504,000 jobs from 2010-2013 while the private sector has been ramping up.” Wright notes that the only government industry that’s grown substantially over the same time period has been state colleges and universities.
For hard hit states, especially those in the Midwest, manufacturing and construction fell from 2008-2009 and have a steep climb to recover to pre-recession levels. No sector dropped more jobs than manufacturing (1.57 million, a 12% decline), but construction had a bigger percentage fall (16%, a total of nearly 1.2 million jobs) and it has only grown 4% since 2010, Wright writes.
The largest and strongest-performing sectors in the recovery have been health care and social services. EMSI notes that health care has added more than 1.1. million jobs since the onset of the recession and more than 800,000 since 2010. The other two double-gainers are educational services (private) and utilities, which hasn’t shed workers but has only added a minuscule 4,600 jobs during the two periods.
The biggest gainer in net new jobs since 2010-2013, EMSI observes, is accommodation and food services, a low paying sector (average earnings per job: $20,580) that only reinforces the realization that the recovery has been fueled by low-wage job growth — in service industries and elsewhere — more than middle- or upper-tier jobs.
Jobs have also surged in temporary help services, which Wright says “is part of the long-winded administrative and support and waste management and remediation services sector that has added the third-most jobs since 2010 behind accommodation and health care.”
Over at Calculated Risk, a well-respected site for economic and financial analysis, comparing changes in public and private sector payrolls took a stroll down memory lane to see which of the last five presidents—Reagan, W.H Bush, Clinton, G.W. Bush and Obama—were the best job creators.
Republicans today as they have for the past 30 years talk of the miracle of lowering taxes to create jobs, but analysis of these five presidencies shows some of the worst job records came during the years the GOP occupied the White House.
President Obama won the Herculean prize in 2008 of digging the nation out of a recession that was roaring full steam when George W. Bush left office. After eight years [two terms] in the White House, President Bush’s presidency saw private sector employment dive to 946,000 jobs lost at the end of his first term. Four years later, private sector employment was collapsing, and there were net 665,000 private sector jobs lost during Mr. Bush’s two terms.
By comparison, during the one term of his father, President G.H.W. Bush, private sector employment increased slightly, with 1,490,000 private sector jobs added.
The big winner, though, was President Clinton, whose first budget that saw not one Republican vote for it because it raised job-killing taxes, created a whopping 20,864,000 private sector jobs. Even the vaunted presidency of Ronald Reagan, with its tax cuts and tax hikes over two terms, only 14,688,000 private sector jobs.
As for President Obama, who now has a track record of 40 straight months of positive job creation, at the end of his first term last year, the nation was up 1,933,000 more private sector jobs. Six months into the new year and his second term, President Obama can point to 3,003,000 more private sector jobs than when he initially took office.
The big difference between President Obama’s time in office and that of previous presidents is that the public sector shrank and continues to shrink. The public sector grew during President Reagan’s terms (up 1,414,000), during Mr. G.H.W. Bush’s term (up 1,127,000), during Mr. Clinton’s terms (up 1,934,000), and during Mr. G.W. Bush’s terms (up 1,748,000 jobs).
Bill McBride at CR shows how much the public sector has declined since President Obama took office—down 732,000 jobs. These job losses have mostly been at the state and local level, he says, but more recently at the Federal level $85 billion in sequestration cuts worm their way into the nation’s consciousness.
“This has been a significant drag on overall employment,” McBride says.
While McBride appears confident that the economy will continue to expand for the next few years, without sharp declines in employment as happened at the end of President Bush’s 2nd term in 2005 and 2006, his real concern is when public sector layoffs will end. He thinks the cutbacks are mostly over at the state and local levels, but cautions that cutbacks at the Federal level are still on-going.
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