President Obama is taking credit for the unemployment rate in the United States being 5%. And just last week it was announced that jobless claims reached their lowest level since 1973. According to President Obama: “The United States of America right now has the strongest, most durable economy in the world.” But there are two significant problems President Obama wishes to ignore.
1) He fails to mention that many of the news jobs created offer workers the minimum wage. Most lack benefits. Some are just temporary jobs. According to the US Bureau of Labor, all of these workers are considered “employed” and thus, they fuel a false narrative that Americans are doing better because unemployment is dropping.
Remember, an individual is counted as employed if they did any work at all in the survey reference week as paid employees, worked in their own business, profession or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family.
2) The amount of people who have fallen out of the workforce is staggering. These are people who no longer search for work, and they no longer collect unemployment. According to the Bureau of Labor Statistics, there were 81,410,000 families in the United States in 2015. Of those, there were 16,060,000 families in which no member was employed. This represents 1 in 5 families, or 19.7 percent of the total.
Since 2008, the labor participation rate has fallen from a high of 67.3% in 2000 to 62.6% today. That 62.2% represents a 38-year low. In some states, more than 4 out of 10 unemployed workers are still considered long-term unemployed. And during his time in offer, 98% of the wage growth has gone to the top 1%.
Bottom line is President Obama is selling a false narrative for not other reason than to protect his legacy.