A few minutes ago the Labor Department released another disappointing jobs report. The economy added only 80,000 jobs in June. This is the third month in a row that the economy has added fewer than 100,000 jobs. Indeed, the latest figures show that the economy added 68,000 jobs in April and 77,000 jobs in May, for a total of 225,000 in the entire second quarter of 2012. By contrast, in July, 1984, during the Reagan recovery, the economy added 379,000 jobs after adding 308,000 in May, 1984 and 363,000 in April, 1984, for a total of 1,050,000 in the second quater of that year. (Go to this website and insert the appropriate month and year to locate this data).
Moreover, as previously explained on this blog, the gap between the 1984 numbers and the 2012 numbers actually understates the difference between the Reagan Recovery and the Obama Recovery when it comes to job creation. After all, in 1984, the American workforce was significantly smaller than it is now. In particular, the civilian workforce in June, 1984 was 113,817,000, while the June, 2012 figure is 155,163,000. Thus, even if the economy had added 379,000 jobs in June, 2012 as it did in June 1984, such an increase would reflect a significantly smaller rate of employment growth than the June 1984 increase. A true "apples to apples" comparison of the 2012 and 1984 figures therefore requires one to adjust the 1984 figures upward, to determine how many jobs the economy would have to add today to achieve the same rate of job growth achieved during the Reagan recovery. We can obtain the relevant conversion factor by dividing the June, 2012 labor force by the June, 1984 labor force; the result is 1.3623.
If we apply this conversion factor to the June, 1984 employment increase, we obtain 516,312. Thus, the true jobs gap between the Reagan and Obama recoveries for June, 1984 is 436,312. Moreover, applying the same methodology reveals that the jobs gap between the second quarter of 2012 and the second quarter of 1984 is 1,205,415 jobs for these quarters alone, a stunning gap that is just one example of the underperformance of the Obama recovery.
If we apply this conversion factor to the June, 1984 employment increase, we obtain 516,312. Thus, the true jobs gap between the Reagan and Obama recoveries for June, 1984 is 436,312. Moreover, applying the same methodology reveals that the jobs gap between the second quarter of 2012 and the second quarter of 1984 is 1,205,415 jobs for these quarters alone, a stunning gap that is just one example of the underperformance of the Obama recovery.
