This article was authored by Andy Puzder for FoxNews.com on February 9, 2023
61% of Americans rate the economy as 'bad' in a recent poll
In his State of the Union address, President Biden made every effort to take credit for what he claimed is an economy improving at an historic pace. Americans disagree.
According to a recent ABC poll, "40% [of Americans] say they are worse off financially than they were two years ago – the most negative response to that question in nearly 40 years." According to a recent CBS News/YouGov poll, 61% of Americans rate the economy as "bad." So where is the disconnect?
A big part of the problem is Biden’s attempt to spin the inevitable jobs market recovery that followed the end of the pandemic. Seriously, you didn’t need a degree in economics to know that once the pandemic’s economic shutdown ended, people would eventually return to work no matter who was in office.
Nonetheless, Biden wants to credit his economic policies. If anything, actually, Biden’s work-discouraging policies – such as massive welfare benefits that made staying home unemployed more profitable than going to work – have delayed and hobbled that recovery.
So, let’s look at a few of Biden’s job creation claims.
We have created "12 million new jobs – more jobs created in two years than any president has created in four years."
To believe this claim you also have to believe that people returning to work is the same as creating jobs. But even assuming that were true, President Trump created more jobs in 9 months than Biden has in 24. In February 2020, the US economy boasted 152 million jobs (then a record high). States then shut down their economies and by April that number dropped by 22 million jobs to 130 million. Under Trump, over the next nine months, 13 million people returned to work and the number of jobs stood at 143 million when Biden took office in January 2021.
As Biden claims, over the next 24 months the economy added a total of 12 million jobs. The total number is now 155 million (just 3 million more than the pre-pandemic total).
So, since the number of jobs hit rock bottom in April 2020, the economy added back 13 million jobs under President Trump and 12 million under President Biden for a total of 25 million jobs. Of that total, 22 million – or 88% – were people returning to work and 3 million – or 12% – were "new" jobs.
But people returning to work really isn’t the same as the economy creating new jobs. Let’s say you work at a company that employs 1,000 people and it shuts down for a week due to a flu outbreak. When the employees return to work is that really the same as creating 1,000 new jobs? Obviously not.
Similarly, sitting in the White House at a time when people are returning to their jobs following pandemic induced economic shutdowns is not the same as creating new jobs. You would assume White House economists know that – and they do.
So, in context, the economy adding a total of 3 million new jobs over 24 months under Biden isn’t even particularly impressive – let alone record setting.
The "unemployment rate is at 3.4%, a 50-year low. Near record – near record unemployment. "
Reality – if people are not looking for work the unemployment rate will be very low. Again, seems obvious. So, a key determinate of the unemployment rate is the labor participation rate – that is, the number of people either working or looking for work. If people aren’t looking for work, the labor department does not consider them unemployed – which obviously lowers the unemployment rate.
So, why is the unemployment rate currently at a 50-year low? Well, it’s because people are staying out of the labor force – they aren’t even looking for work – in larger numbers than was the case pre-pandemic. That spells all kinds of danger for our economic outlook.
Were the labor participation rate today (62.4%) the same as it was when the pandemic began (63.3%), the unemployment rate would be 4.9%, which isn’t bad but also isn’t a 50-year low or even the pre-pandemic rate in February 2020 of 3.5%.
Just to give you an idea about how important this is, if labor participation in February 2020 were what it is today, the unemployment rate under Trump would have been 2% heading into the pandemic – and that would have been an all-time historic low.
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