Introduction

During Barack Obama's presidency, the narrative centered around the creation of millions of jobs. However, many critics argue that these figures do not tell the whole story. This article seeks to delve into the intricacies of job creation during both the Obama and Trump administrations, with a particular focus on the fluctuating labor force participation rate.

Job Creation During the Obama Administration

Proponents often cite the millions of jobs created during Obama's tenure. However, a closer look reveals that many of these jobs were in industries like fast food (McDonald's and Burger King) that traditionally require minimum wage workers. In contrast, President Trump emphasized saving jobs in industries that pay significantly higher wages, typically in the range of over $80,000 annually. This highlights the disparity in job quality during the two presidencies.

Methodological Considerations in Job Counting

One of the key issues with comparing job creation figures is the methodology used. Both administrations count actual jobs created, rather than comparing against a benchmark of how many jobs should exist. Additionally, the base year for comparison is crucial. Obama's job count starts from 129.7 million jobs at the low point of employment, whereas Trump's count begins from the 134 million figure when Obama took office. By November 2016, the actual number of employed individuals reached around 145 million. These differences in starting points significantly alter the narrative.

The Decline in Labor Force Participation Rate

Another critical factor is the labor force participation rate, which measures the percentage of the working-age population that is either employed or actively seeking employment. This rate has seen a decline over the years, leading some to question how job creation has been achieved with a smaller percentage of the population working. Various factors contribute to this decline, including population growth, entry of new workers (like millennials), and older workers delaying retirement.

Forces Behind Labor Force Growth and Decline

The labor force is continually growing through the addition of young workers, recent graduates, and older workers who are opting to stay in the workforce longer. The millennials, who are the largest living generation, are increasingly entering the job market. Meanwhile, baby boomers, while reaching retirement age, are extending their working years.

Manipulation of Labor Force Data

There are also questions about whether the labor force data has been manipulated to lower the unemployment rate. Historically, the labor force has grown on average by 1.5% per year. Yet in 2009 and 2010, the labor force experienced its first decreases since the 1950s. This deviation from the norm suggests that the data may have been adjusted to show more favorable unemployment statistics.

Conclusion

Ultimately, while job creation has occurred, the growth in the labor force has not kept pace with expectations. With population growth, the influx of young workers, and the continued presence of older workers in the workforce, the labor force participation rate has declined. This has driven the unemployment rate higher, to levels that might suggest a need for 5 to 10 million more jobs to be created. Understanding these dynamics is crucial for policymakers, economists, and the general public to gain a more nuanced view of job creation and economic performance.