A Correct Analysis of Jobs Created

President Obama is the greatest job creating president of all time.

That’s the meme that’s pushed by his supporters. Full disclosure: I’m not one of them. But the reason I’m not one of them is because of data, not politics.

The number being pushed around varies, but “jobs created” is meaningless when used to compare different years and different presidents, because the economy is so much bigger today than it was even a decade ago.

This is intuitive, if you think about it. If there are a thousand jobs in an economy and you create a hundred, that’s a 10% increase. If there are ten thousand jobs in an economy, and you create a hundred, that’s a 1% increase. This is just solid math, not politics.

So, with that in mind, let’s draw some charts, starting with the misleading one:

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US Unemployment Rate, 1980–2015 (Source: Bureau of Labor Statistics)

Obama’s performance on unemployment rate improvement is in RED above; the vertical black line is his inauguration, while the horizontal black line is the average unemployment rate over the period (6.42%). The performance since 2009 on this metric is impressive.

However, let’s look at the raw numbers of job creation:

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Job creation/losses, 1980–2015 (Source: Bureau of Labor Statistics)

When you look at the raw job growth figures, you can clearly see the four recent periods of recession when jobs were lost, as well as the four periods when jobs were gained. The performance of the current administration is in red (it would be completely unfair to Obama to hold him accountable for the 2009 losses — — the economy is a huge ship that requires time to turn around).

That said, the 2010 to date period is strongly positive, but not outstandingly so. It’s clear to the eye that the Reagan and Clinton job expansions were stronger.

Now, what happens when we look at this graph PER CAPITA? In other words, when we adjust for the growing population of the US? After all, adding a million jobs to a 100 million person economy is a lot more impressive (and important!) than adding a million jobs to a 300 million person economy.

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Job Growth/Loss per capita, 1980–2015

Unsurprisingly, the graphs are similar, but the per capita adjustment make it more clear: the job growth under the current administration is nothing special.

On job growth, Obama, among the last five presidential terms, is third-best.

Written by

Data Driven Econophile. Muslim, USA born. Been “woke” 2x: 1st, when I realized the world isn’t fair; 2nd, when I realized the “woke” people are full of shit.

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