The "We've Created Millions of Jobs" Myth

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Mises:

The "We've Created Millions of Jobs" Myth

MARCH 15, 2016 Ryan McMaken

In an interview on Bloomberg TV Monday, David Stockman explained the Trump phenomenon as a "repudiation" of the failed economic policy that presently dominates Washington.

 

In the course of the interview, however, one of the Bloomberg commentators returned to well-worn bullet points and claimed "we've created, like, millions of jobs" since the last recession.

 

Stockman's response was "no we haven't" and he went on to note that "if we look at real jobs, at full time jobs, there are no more today than in December [2007]." Stockman also pointed out that many of those jobs were simply replacing what was lost during the recession. Naturally, Stockman realizes that if you're going to measure progress in job growth, you have to measure from the peak of the previous business cycle, and not from the bottom of the most recent trough.

 

The larger problem, Stockman notes, stems from a complete lack of context when using the "millions of jobs" claim, since job gains in recent years, when compared to past economic cycles, are anemic at best. They also ignore the role of part-time jobs and discouraged workers.

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Demagoguery vs. Data on Employment in America

 

MARCH 15, 2016 Tyler A. Watts

 

Demagogue politicians love to play on popular fears that low-wage foreigners are “stealing” good paying American jobs by way of outsourcing and globalization. The claim is made by protectionists of all political stripes, whether leftists complaining of a “rigged economy” or rightists speaking of other countries “beating us” economically.

 

A sound economic analysis of the claim about job losses due to international trade should address two questions: First, is it true that the US has lost jobs due to trade (or other factors)?

 

Second, is this phenomenon good or bad overall for the US and world economies?

 

On the first point, it can appear as though the US has lost jobs. For example, as Figure 1 shows, manufacturing employment in the US has declined by about 2 million from pre-Great Recession levels, and is down by over 7 million, or 37 percent, from the all-time high reached in 1979.

Figure 1: Total Manufacturing Employment, 1940–2016

https://mises.org/library/demagoguery-vs-data-employment-america