2016 STATE OF THE OBAMA ECONOMY
The state of the nation’s economy is weak. Under President Barack Obama, American families are worse off than they were before he took office.
Millions of hardworking taxpayers find themselves locked out of the American Dream, with their wages either flat or falling, even as the prices of many necessities steadily rise. The labor force is shrinking, and the government stimulus which President Obama claimed would lift the economy to prosperity has instead sunk the nation into a chasm of exploding federal debt.
FAMILY INCOME IS DOWN
When jobs began coming back during the “recovery” in the Obama Economy, they were concentrated in lower-paying sectors, like retail, trade, and administration.
High-paying jobs are now being replaced by lower-paying jobs, which has caused the income of many families to fall.
Inflation-adjusted median family income has fallen from $62,296 in December of 2007 to $59,802 as of August 2015, or by $2,494. That is a 4.0 percent decline in nearly seven years. Since January of 2009, this indicator has fallen by $2,203, or by 3.6 percent. Median family incomes after inflation adjustment are no higher than they were in June of 2005.
SOURCE: Data from estimates prepared by the National Association of Realtors and provided to the Budget Committee by Haver Analytics and United States Conference of Mayors, “U.S. Metro Economies: Income and Wage Gaps Across the US” (August, 2014): pp. 1–2. This report was prepared for the Conference of Mayors by IHS Global Insight.
PART TIME WORK SQUEEZES FAMILIES
The most striking feature of the Obama Economy is the persistently high level of part-time work.
Workers are being forced into jobs with inferior wages and benefits because of a combination of regulations and taxes, including the president health care law, that has slowed the recovery and made it harder for businesses to maintain full-time workers.
Part-time work has still not declined almost eight years later, and it took until August of 2015 for full-time work to recover to its pre-recession peak.
SOURCE: Data for full-time and part-time employment are BLS series, respectively, LNS12500000 and LNS 12600000, http://www.bls.gov/web/eci/ecconstnaics.pdf.
TOTAL JOB GROWTH BARELY ABOVE 2009
The Obama Economy led to the slowest jobs recovery since World War II.
The total number of jobs in the 1981 recession, which lasted 16 months, had fully recovered by the 27th month, or by October of 1983. By contrast, total jobs did not reach the pre-recession level until April of 2014, a full 75 months following the recession’s onset.
During a period of almost 7 years during which the U.S. population age 16 years and above grew by 15,653,000, not one net job was created.
SOURCE: The unemployment rate peaked at 10.8 percent in December of 1982 and inflation at 11 percent (annual rate) in September of 1981. The 2007 recession’s unemployment rate reached 10 percent in October of 2009 and inflation never exceeded 5.6 percent. The durations of each recession were similar (16 months in 1981 vs. 18 months in 2007). Data from the Minneapolis Federal Reserve Bank, “The Recession and Recovery in Perspective,” available at http://bit.ly/1kD1cSw, the Bureau of Labor Statistics and Haver Analytics.
REGULATIONS REMAIN AT HISTORIC HIGHS
America’s growing regulatory burden appears to slow economic growth by diverting an increasing amount of entrepreneurial time and investment capital away from producing goods and services and toward complying with regulations.
While economists may disagree on the specific ways regulations affect the pace of economic activity, there is widespread agreement that the rapidly growing body of regulation bears down on the growth rate of the overall economy.
SOURCE: Senate Budget Committee computations using data from the Commerce Department’s Bureau of Economic Analysis, Mercatus Center’s Reg Data 2.1, and data on regulation related outlays from the Regulatory Studies Center at George Washington University.
HIGHEST LEVEL OF LONG-TERM UNEMPLOYED WORKERS IN 10 YEARS
The social and economic costs from remaining unemployed for long periods are enormous. In the Obama Economy, skills degrade, and the long-term unemployed frequently find themselves with a long-term dependency on public assistance programs.
The Congressional Budget Office noted in its January 2014 Budget and Economic Outlook that the significant personal cost of long-term unemployment (lost skills and hours of work) will be a drag on the economy for at least the next decade.
An important way to understand the costs of the slow economic recovery is to see how little improvement there has been to the population in proportion to long-term unemployed workers. (The Labor Department counts as long-term unemployed anyone who is in the labor force and has been continuously out of work for 27 or more weeks.)
As of September of 2015, over one-quarter (26.6 percent) of all unemployed workers (2,104,000) fell into this category. When President Obama took office in January of 2009, less than one-fourth (22.9 percent) of all unemployed workers were long-term unemployed.
SOURCE: Data from the Bureau of Labor Statistics, Employment Situation Report, Table A-12.
