Tag Archive for private sector jobs

Why Obama Is Always Talking About “Private Sector Jobs”

My latest video is from a talk I gave back in July at the RightOnline conference. I had 5 minutes to give a talk and I had something all planned out… until President Obama gave this speech in Cleveland. In this speech he stated:

Our businesses have gone back to basics and created over 4 million jobs in the last 27 months — (applause) — more private sector jobs than were created during the entire seven years before this crisis — in a little over two years

I decided to check him on his jobs claims and I summarized my findings in my talk, which I reproduced for this video.

I make 2 big points in this video:

  • Obama selectively chose specific dates to make his fairly weak jobs numbers look better
  • There is a more comprehensive jobs number (employment) that tells a very different story.

Deception Through Selection

And here is where I give a little more detail on what numbers I used. First a little background:

President Obama gave this speech on June 14, 2012, so at that time we were using the most recent BLS jobs report which had number up to May. Counting backward from there, that means Obama was counting from March 2010 to May 2012.

March 2010 – 106,914,000 private sector payrolls

May 2012 – 111,040,000 private sector payrolls (revised up 32,000 in later reports to 111,072,000)

Difference in Obama’s “27 month number” – 4.13 million private sector payrolls

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I was assuming that when Obama said “before the crisis” he meant before we started losing jobs. That would put the “7 year” number from February 2001 to February 2008.

February 2001 – 111,623,000 private sector payrolls

February 2008 – 115,511,000 private sector payrolls

Difference in 7 years – 3.88 million private sector payrolls

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As you can see, the Obama graph is a nice simply upward slope including only the part of his presidency where he gained jobs. In fact, he starts counting only after the jobs number completely bottomed out. If we look at the jobs record during his entire time in office, we get this chart

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Is there any thing wrong with not counting those initial job losses? I don’t think so. I think it is a perfectly reasonable thing to do to say “let’s look at the strength of the recovery alone” and use that metric to count. But it is incredibly disingenuous of the Obama team to completely discount job losses for themselves but then turn around and count them in the comparison data point.

In the video, I point out that using “6 years before the crisis” or “5 years before the crisis” result in vastly larger numbers (6.4 million and 7.1 million respectively), but what I’m really interested in here (and what I’d like to expand upon) is comparing private sector payroll growth that Obama is touting to the private sector payroll growth under Bush.

I looked at this a couple months ago and was a little shocked to see the following chart, but here it is. Starting at the low point of private sector jobs growth, if we chart what I will (for simplicity sake) call the Bush recovery (starting in July 2003) and the Obama recovery (starting in March 2009) using the latest data, we get:

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As you can see… the weird thing about this current recovery is how closely it is tracking to the previous recovery in terms of private payroll increases. For Obama to pretend he is substantially better than Bush on this metric is nothing short of fantasy.

The Larger Jobs Number (Employment)

Here is where things actually get really freaking weird. The Bureau of Labor Statistics (BLS) uses two numbers to count jobs. (See more about how the BLS counts jobs here)

The first one is the establishment data (B Tables) and this is a survey counts jobs by industry. Think of it as someone calling a bunch of businesses and asking “How many people do you have on payroll?” They directly sample over 100,000 businesses and it has a margin of error of about 100K jobs.

The second one is household data (A Tables) and this is a survey of households. Think of it as someone calling a bunch of people and asking “Do you have a job?” It samples about 60,000 households and has a much larger margin of error (400K jobs).

The establishment data is usually used for month-to-month job counts in part because it tends to be a much less volatile metric (household data can swing somewhat wildly). That’s why, when you hear about “X jobs gained last month”, they use the number from the establishment survey.

However, a weird thing happened in the 00’s with the household survey. If we take the private payrolls and compare them to what I’m going to call “private employment” (the A table employment number minus government jobs), we see a massive difference in the job count.

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That’s a 3 million job difference between private payrolls and private employment. This is way outside the margin of error. Something happened there, althoughI’m not sure what. Maybe self-employment increased, or people made ends meet w/ irregular non-payroll income or farm employment jumped. I honestly don’t know and anything I say here is pure speculation. But there it is, clear as day.

This is why Obama focuses so much on private payrolls as the metric he uses. Most fact-check organizations are not savvy enough to notice that there is this huge discrepancy in the jobs data from survey to survey. They only think to check Obama’s statements against the private payrolls data, not the overall employment.

In contrast compare the chart above to the private payrolls vs private employment change since Obama’s inauguration.

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As you can see, the change in both jobs numbers are nearly identical. If we add in government job losses, we actually get a negative number on employment change since his inauguration. This shows that something was happening in the last recovery that isn’t happening in this one.