Q&A of the Day – Bidenomics: Has the US Really Recovered Jobs Lost During the Pandemic?
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Today’s Entry: Biden talks about all of the jobs added since he became pres. Obviously its mostly just jobs recovered from lock down states that coincided with the start of his time in office. Based on polling it sounds like most people get it. What I’d like to know is if we’re at record employment yet. Are the jobs that are being added still just a recovery of what was lost during the lockdowns or are there really more jobs and more people working? Thanks!
Bottom Line: To your point, last week on Labor Day President Biden said this at a speech in Philadelphia: It wasn't that long ago that 20 million people were out of work, but you didn't give up. You wouldn't know from all the negative news you hear (but this is) one of the greatest job creation periods in American history. Bidenomics is a blue collar blueprint for America. My plan for the country is to make the economy work for people like you, because when it works for people like you, it works for everybody. It's working. It’s nice sounding material for a speech on Labor Day but your instincts on this one, to ask about where employment in the country really stands from a macroeconomic perspective, is far more on point than the president’s comments about job creation.
I’ve often said you can lie to people about policy and those who’re inclined to believe you will, but you can’t lie to people about what is or isn’t in their wallet because they know. Aspects of economics, like evaluating the Labor Force Participation Rate and its relationship to employment levels in February of 2020, prior to the impacts of the pandemic and where we are today, can be complicated. The way economic policy impacts people day to day isn’t. People know if they’re better or worse off over time. The fact of the matter is that the average American is far worse off economically today than the day that Joe Biden became president. That’s due primarily to inflation, but also because in answer to your question, we haven’t come close to recovering the jobs lost during pandemic lock downs and that’s also exacerbated at this point due to population growth over the past three years as well. First, on the inflation.
President Biden’s net inflation rate is 18% through the first two and a half years of his presidency. Meaning you must spend $1.18 to buy today what a dollar bought on January 20th of 2021. That would mean the average American who is working would need to be making 18% more than they were the day he took office just to have broken even in his economy. The average hourly wage on the day Joe Biden took office was $29.96. The average wage most recently is $33.82. That’s an increase of just 12.8%. That means the average American who was working the day Biden took office and who has remained employed the entire time, is 5.2% worse off economically in the era of Bidenomics. And obviously the toll is worse for those who haven’t retained employment throughout that whole period. Speaking of which...here’s the breakout on the job's situation.
The Labor Force Participation Rate was 63.3% in February of 2020, just prior to the impact of pandemic era lockdowns. The rate today stands at 62.8%. Every percentage point in labor participation equals 2.637 million people. That means, adjusted for population growth, that there are 1.32 million fewer people employed today than there were prior to the pandemic in Trump’s economy. So no, the US economy still hasn’t come close to recovering the lost jobs. This is the one-two punch that Americans feel which is why Biden’s effort to push the alleged effectiveness of Bidenomics continues to fall flat.
You referenced polling suggesting that the wool wasn’t effectively being pulled over people’s eyes and you’re right. Currently, on managing inflation, President Biden’s average approval rating is only 33%. On the economy overall, it’s only 38%. Those are devastatingly low economic numbers for an incumbent president. By way of comparison, President Trump’s economic approval rating was 63% in February of 2020. So yeah, American’s know what’s up economically. Because again, they know what is or isn’t in their wallet. And they know that Bidenomics not only isn’t working, but that it’s been hurting them right along.