A conservative blog recently looked at data from the Bureau of Labor Statistics on the “employment-population ratio” (EPR), which measures the percentage of America’s working age population that is actually employed – a good measure of the strength of the job creation and the economy. Looking at monthly data on this measure, the blogger reported that the 30 worst months for employment in the last 25 years have occurred under President Obama and, amazingly, all of these months occurred after the recent recession ended in June 2009.
Certainly, the employment-population ratio has decreased significantly in the past due to recessions, as the accompanying chart illustrates. After the dramatic inflation problems of the 1970s and recession in the early 1980s, in fact, the employment picture was even more dismal than it is today.
However, unlike today, the employment situation in the past improved rather significantly shortly after the end of a recession. Certainly, the EPR has never stagnated for almost three years in a row after the end of a recession. Why is this happening now?
One primary difference between today and past recessions is that, between 1980 and 2008, the federal government, under the leadership of Presidents Reagan, Bush, Clinton, and Bush II, generally pursued conservative economic policies of lower taxes and less government regulation of the economy (even President Clinton, a Democrat, declared that “the era of big government is over”). But beginning in 2009, President Obama embarked on a liberal vision to expand government regulation of the economy and increases taxes, especially on “the rich,” as he and other liberals define that plum source of tax revenue.
While he hasn’t had much success raising federal tax rates, President Obama has achieved many policy “victories” in expanding the size and scope of government economic regulation: Obamacare, Dodd-Frank financial regulations, and environmental regulations from the EPA are examples. The result has been a stagnant employment and economic situation, even while the economy should be driving significant job creation and economic growth due to the “economic recovery.”
Certainly, there is more to today’s economic and employment picture than federal regulation and tax policies. But if anyone wants to investigate and compare economic performance under both conservative and liberal approaches to the economy, the facts speak for themselves.