President Donald Trump has been in the Oval Office for two years now, and is presiding over a roaring labor market – something his detractors thought would never happen. Much to the chagrin of his adversaries, the U.S. economy’s accomplishments were on display during the recent Vaudeville showcase in Washington, otherwise known as the State of the Union address. The Democrats sat on their hands when some statistics were uttered – five million new jobs, record-low black and Hispanic unemployment, and rising wages. So, it would only be appropriate to take a second glance at his predecessor’s jobs situation, a tale of disappointment and disaster for The Chosen One.
…94% of these jobs were part-time, contract, gig, or temporary.
A Part-Time Jobs Nation
When former President Barack Obama completed his eight-year reign, Harvard’s Lawrence Katz and Princeton’s Alan Krueger published a study that examined the labor market during this time. Obama likes to cite that 11 million new jobs were created in his tenure, but the research found a compelling revelation: These were not permanent, full-time positions.
According to the study, 94% of these jobs were part-time, contract, gig, or temporary. Traditional full-time employment – Monday to Friday and 9 a.m. to 5 p.m. – gradually disappeared for every demographic.
Overall, there were one million fewer workers employed full-time than prior to the financial crisis.
That wasn’t the only report to highlight the putrid labor situation for the American people. Here are a few other statistics to show the Obama economy was not as good as he liked to pretend:
- 50% of people working part-time did so involuntarily.
- The U.S. had the lowest job growth rate in 35 years (as of 2016).
- The number of full-time breadwinner jobs were 1.7 million below the level in December 2007.
- Real median household income dipped 2.3%.
- The Labor Force Participation Rate fell to a 40-year low of 62.8%.
Because of this, the U.S. was given the distinction of a Part-Time Jobs Nation. But Americans would have been lucky if they found part-time employment from 2009 to 2017, since temporary, freelance, and independent “gigs” surged in the marketplace. The U.S. should have been rebranded the 1099 Economy.
The primary culprit for the spike in part-time employment? The Affordable Care Act (ACA), otherwise colloquially known as Obamacare.
Under the legislation, businesses (with 50 or more employees) were mandated to provide health insurance to workers when they clock in 30 or more hours per week. The result? Businesses either slashed the number of hours an employee worked, or they reduced the size of their workforce. Over the years, we saw a barrage of articles reporting businesses cutting hours, payrolls, and benefits because of Obamacare.
If you did have the opportunity of gaining full-time employment, the health care mandate penalized you. According to a 2016 Mercatus Center study, Obamacare slapped a $3,000 penalty on large businesses that hired full-time employees but did not provide health insurance:
“The United States’ working population will face three major employment disincentives resulting from the very benefits the Affordable Care Act (ACA) provides: (1) an explicit tax on full-time work, (2) an implicit tax on full-time work for those who are ineligible for the ACA’s health insurance subsidies, and (3) an implicit tax that links the amount of available subsidies to workers’ incomes.
The ACA’s employment taxes create strong incentives to work less. The health subsidies’ structure will put millions in a position in which working part-time (29 hours or fewer, as defined by the ACA) will yield more disposable income than working their normal full-time schedule. Due to this penalty’s unfavorable tax treatment, it is effectively a $3,000 employment tax and can be expected to reduce full-time employment.”
Obamacare was bad news for everyone.
Tallying the Numbers
It is also worth pointing out how employment statistics are formulated.
Since the administration of President Lyndon Baines Johnson, the federal government can change unemployment data by either adding or deleting certain equations, workers, and numbers to mirror their policies and offer the country false data. As an example, according to the Bureau of Labor Statistics (BLS), there are three groups of people not considered in the final jobs report:
- A person who has stopped looking for work for more than a year.
- Individuals who are employed part-time but are still looking for full-time work.
- Americans who give up looking for work altogether.
Ultimately, if you calculate jobs the way the federal government did during the Great Depression, then the unemployment rate throughout Obama’s time would have been a lot higher. Trump warned back in 2012 about the government monkeying the numbers:
“I don’t believe the numbers and neither do any of the other people that have intelligence. Because that number came out of nowhere. I think that they did a lot of monkey business. I’m telling you, in a month and a half from now, they will do a readjustment like has been happening for the last year and a half.”
Obama vs. Trump
Technically, the U.S. economy expanded under Obama’s watch, though the recovery was one of the worst on record. Obama became the first president in history to never experience a single year of 3% GDP growth, despite U.S. real GDP increases averaging 3.79% between 1790 and 2000. The former president poked fun at then-Candidate Trump about his “magic wand” to create jobs. It turns out that Trump didn’t need a magic wand or even the Federal Reserve’s accommodative monetary policy to achieve growth, just pro-business policies that sent a much-needed jolt into the marketplace.