U.S. President Barack Obama has been praised for his stimulus plans and the positive effects it will have on unemployment. However, is it true that President Obama created 9.3 million jobs so far during his presidential term? Many liberals cite that Obama had “created” that amount of jobs, but in this article, I will dispel the myth on why this magical 9.3 million number is incorrect. It simply does not make sense according to any determination. Realistically it would take a miracle to “create” 9.3 million jobs, especially with the economic climate that we face today.
First, let us look at how many people are part of the labor market. We will look at it from a year to year basis, i.e. we start at 1st of January and end the year at 31st of December:
We can already establish that the labor force of the US has increased. This gives a good indication that jobs were “created” (as we are told by the left); however, what about the unemployment rate? Over here is unemployment rates during the Obama administration:
Unemployment also fell while Obama was President, however, even if we look at the numbers themselves between 2009 to the current report as of July 2016, we can see with the season adjusted figures, Obama apparently added 9.5 million jobs!
From this point onward, liberals tend to say job well done!, however, there’s more than just comparing two timelines in order to truly understand how many jobs Obama added. First, let’s look at a more important fact, the labor non-participation rate. This statistic gives an insight into how many people are no longer looking for jobs or “participating” in the job market:
From what we can observe, the labor force hasn’t been participating since Obama took office, or even with the stimulus package itself. However, we can’t say for definite that the stimulus package is the reason for such drops in the participation rates. This article just dispels the economic myth of 9.3 million jobs.
But one would object to the growth of “65 and older” people which could distort the non-participation rate as the labor force participation rate takes into account everyone who is 16 and older. While in theory this is true; this isn’t what actually happened over a historic recorded period. Below is how many people who are 65 and older which are participating in the labor market:
As we can see here, the over 65 participation rate has grown by 2.442 million. This already indicates that people over 65 are participating within the labor force, and thus this dispels the theory currently that an aging population is the reason for an increase of the non-participation rate. From this, when we use the method of just looking at two different time periods, how many jobs did President Obama really ‘create’ with his stimulus plan?
With the extremely inaccurate presentation of how many jobs were “created” by President Obama and his administration, the numbers are not as impressive at all, as in reality, only 3.1 million jobs had been added. However, this is not the most inaccurate way of presenting how many jobs were “created”.
If we just take the averages of every year for each category, this is how many jobs were net “created” under the Obama administration:
Even with 5.5 million jobs, that’s still not the 9.3 million figure that’s being cited all the time. Both the 3.1 million and 5.5 million figures are extremely inaccurate at portraying the real amount of jobs “created” under the administration.
If we look at the year by year (start at 1st of January and end at 31st of December for each year) we will see how many jobs were actually “created” every year under the Obama administration and thus we can tally the net amount to truly see the real job creation number:
Effectively, President Obama has only “created” around 1.7 million jobs as of July with the latest reports. It’s evident that all together, despite the fact that I do not have the knowledge as of now to comment whether the stimulus plan had directly affected employment, I could say for sure that with the knowledge I have on the stimulus plan, it definitely did not work in many different areas of the economy.
From this, only with a statistical base on looking at the numbers, we can clearly see that Obama, at most, “created” 5.5 million jobs, but realistically he’s only made a mere 1.7 million jobs. That’s 81.72% less than the current amount being passed around.
In another article, we will look at how many jobs did each president “created” and rank, of course, to the order of jobs “created”.
Why do I continue to quote “create/created” in this article? One essential question, which should be asked, is whether the President really makes jobs? Presidents in reality may influence the labor market in order to “create” jobs, however at most, presidents and their cabinets do not have the ability to influence the labor market in a positive way. Usually with centralization/planning in economies, negative effects are felt throughout the economy. Another issue that arises from the word “create/created” is that in an economy, we don’t merely “create” jobs; we allocate resources (i.e. human resources in this case) in order to work with what the market needs. Essentially, jobs are not created or made, but they are allocated and transformed just like any other resource that an economy requires.
Bureau of Labor Statistics with various statistics.
* Baland Rabayah is a student of praxeology and contributor at the Being Libertarian Facebook page.