Edward J. O'Boyle

One year ago, Joe Biden was inaugurated as the 46th President of the United States. His advocates, ever since, have been latching on to whatever evidence they can claim as proof that his first year has been a success.

His critics have been clinging to whatever evidence they can claim to prove that his first year has been a failure. This is not labor market analysis. This is the manipulation of labor market data for political advantage.

A review of developments in the labor market over the past 12 months may help to set the record straight. In the following we use data from December 2020 as our baseline.

Both camps turn to the monthly jobs report prepared by the Bureau of Labor Statistics to support their claims. Biden’s advocates in the media point to the 3.9 percent jobless rate in December 2021, along with the 6.1 million increase in the number of persons employed over the last 12 months, to support their claim that he has been a success.

His political and media critics call attention to the millions of job openings that employers are unable to fill, plus stubborn labor force participation rate hovering around 61 percent, to confirm that inflated unemployment benefits have created a labor shortage as proof that Biden has been a failure. Who are we to believe?

The answer is both and neither one. The reason is simple and transparent enough. Both sides cherry-pick the data to make their case. Neither one is being entirely truthful.  Both are using the data for political ends: to prevail in Congress and to win in the November election.

This practice goes as far back to Bill Clinton’s first term in office, nearly 30 years ago, when his Labor Secretary Robert Reich took control of the release of the monthly jobs report away from the Commissioner of Bureau of Labor Statistics to spin the monthly data in the president’s favor.

This is what many politicians do.  Reinforced by their friends in the media, they make their party’s candidate as attractive as possible and the other party’s candidate as ugly as they possibly can.

The truth is that the labor market numbers are good, but not good enough.  The situation is similar to a veteran baseball player whose lifetime batting average is .327 but is in a serious slump which has lowered his current average to .269.  Baseball writers think that he will snap out of this slump but are not entirely certain.  Is he past his prime? His fans are hopeful. The boo birds say trade him now while he still has value.

The labor market took a terrible hit with the shutdown of the economy in the spring of 2020. The jobs reports indicate that it has made a very substantial improvement. For example, the number of persons unemployed for 15 weeks or more has dropped by 2.7 million over the last 12 months, but last month 2.8 million still remain among the long-term unemployed.  While the jobless rate among Black or African American workers has fallen over the past year by roughly the same amount as whites (2.94 percentage points compared to 2.82 percentage points), the December 2021 unemployment rates are much higher for black or African Americans (7.1 percent) than for whites (3.2 percent).

Over the last year, the labor force participation rate —number of persons employed + unemployed as a percent of the population — increased from 61.5 percent to 61.9 percent. At the same time, the employment ratio — number of employed as a percent of the population — showed even more substantial improvement (57.4 to 59.5 percent). Men and women alike participated in the improvement in both metrics. 

There was hardly any net change in the number of persons classified as labor force nonparticipants between last November and December. However, this negligible change was the result of an estimated 6.4 million persons who (re-)entered the labor force in the last month and another 6.3 million who left the labor force at the same time. These dynamics have been a re-occurring phenomenon for many years.

In addition, the labor market has changed radically over the very long term. In 1948, 84 percent of men were employed; today that number has fallen to 65 percent. At the same time, the percent of women employed has risen from 32 to 54 percent.  Since 1950, the median age of the U.S. population has climbed from 30 to 38. Today’s labor pool is older, with a growing number of women but a declining number of men. These changes in the demographic composition of the labor force have to be kept in mind when citing current labor force participation rates.

Work is a vital link to economic well-being. For example, in 2020 when the pandemic induced economic collapse was most devastating, only 1.6 percent of all persons 18 to 64 years of age who worked year-round, full time were classified as poor. In sharp contrast, 11.3 percent of those who worked less than year-round full time, and 28.8 percent of those who did not work at all during the year were counted among the nation’s poor population.  Year-round, full-time work has mattered for many years.  

Furthermore, marital status matters as well. Median income in 2020 for households headed by a married couple was $101,517. For families headed by a single female, no spouse present, it was $49,214. Educational attainment matters too. For households headed by a high school dropout,  median income was $29,547.

The 2021 labor market has made important strides in the direction of full recovery. We will know more in September when the Census Bureau releases additional data for 2021 on income, poverty, and work experience, just in time for the November mid-term elections. Given the political fortunes at stake, be prepared for politicians and their friends in the media to spin the findings to their partisan advantage.

Edward J. O’Boyle is a Senior Research Associate with Mayo Research Institute. He has offices in West Monroe, Lake Charles and New Orleans. He can be reached at 381-4002 or edoboyle737@gmail.com.

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