- The Washington Times - Thursday, March 20, 2008

ANALYSIS/OPINION:

In the State of the Union address in January and at the Economic Club of New York last week, President Bush boasted about “52 consecutive months of job growth, which is a record.” White House Council of Economic Advisers Chairman Edward Lazear cited the streak when he held a news conference earlier this month after the Labor Department reported that nonfarm payrolls fell for the second month in a row in February. Wisconsin Rep. Paul Ryan, the ranking Republican on the budget committee, seems to mention the streak often. The streak, by the way, ended in January.

Throughout the 52-month streak, it turns out that 8.3 million jobs were created. Even this “record” pales compared to the 13.7 million jobs that were created during an earlier 52-month period (February 1996 through May 2000), which was interrupted by a single month when employment declined. Total employment increased by 6.4 percent during the record-setting streak and by 11.6 percent during the other 52-month period.

The White House also emphasizes the current unemployment rate of 4.8 percent. This low rate, however, is largely due to the fact that the labor-force participation rate (the percentage of the noninstitutional population 16 years and older that is either employed or actively looking for work) has declined from 67.2 percent when Mr. Bush entered office to 65.9 percent in February. If last month’s labor-force participation rate had been 67.2 percent, then the unemployment rate would have been 6.7 percent, not 4.8 percent. Instead of classifying 7.4 million would-be workers as unemployed in February, the Labor Department would have reported an unemployment level of 10.5 million. Moreover, if a recession did begin in January or February, as many economists believe, it will have started when 18 percent of the reported unemployed had already been out of work 27 weeks or longer. When the two most recent recessions began in July 1990 and March 2001, the percentages of unemployed workers who had been out of work more than half a year were 9.8 percent and 11.1 percent, respectively.

Both the president and Mr. Lazear also recently stated that wages were increasing. In fact, when adjusted for inflation, the seasonally adjusted average hourly wage for production and nonsupervisory workers (80 percent of the private workforce) was not only lower in February 2008 compared with February 2007. Last month’s inflation-adjusted hourly wage was also lower than it was in August 2003, the month before the record-setting 52-month streak began.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide