Beware Of Labor ‘Facts’ During Election Season

Michael Bitzer

After hearing President’s Obama’s recent “The private sector is doing fine. Where we’re seeing weaknesses in our economy have to do with state and local government” statement, and the resulting uproar over it, I thought it might be interesting to take a comparative look at whether the facts and figures on employment match the observations and outrages.

I collected the data from FRED, or Federal Reserve Economic Data, at the St. Louis Federal Reserve Bank. It’s a great feature and folks can use hundreds of different types of data to look at a myriad of economic information.

First, I pulled the numbers on total employment in two key areas that caused the uproar: total employment within all private industries (a.k.a., the private sector) and within all government (public sector).

The private sector employment (blue line, in thousands of persons) is scaled on the left of this graph, with the public sector employment (red line, in thousands of persons) scaled on the right.  The period of the most recent recession — starting in December 2007 and ending in June 2009 — is the grey box.

The blue line shows the massive hit that the private sector took in the recession, going from a high of 115.6 million people in January 2008 to a low of 106.7 million in February 2010.

Since that low point, the total private sector employment has gone back up to a little over 111 million in May 2012.

Compare that to the public sector employment numbers.  Typically, governments, in terms of funding and employment numbers, lag the private sector when it goes into recession, and this recent economic downturn was no different. 

The high point (excluding the spike for Census hiring in May 2010) for public sector employment was April 2009 at 22.6 million. But since then, public sector employment has dropped, dipping to 21.9 million in recent months.

Of course, the total public sector employment includes the three levels of government: federal, state, and local. And of the three, state and local governments suffered a significant drop in employment than the federal government. 



Two other sets of comparison might be helpful to analyze the data as well, this time using presidential administrations to look at both the trends of public and private sector employment.

For private sector employment, I went back to the first month of each administration (January) and tracked each president since Reagan.
In comparing presidents and the private sector’s employment in their terms, both Reagan and Clinton had distinctive lines trending up. This indicates increased numbers of jobs during their administrations.

For the two Bush administrations, Bush 41 (with only one term in office) saw a basic flatline of employment in the private sector, while Bush 43 saw slow decline, followed by an increase, then — by the end of his second term — the significant drop of the recent recession.

For Obama, the trend line declines in the first part of his administration (an expected occurrence since the recession officially ended five months into his administration) but then begins to turn positive in the later part of the line.

For public sector employment, all four previous presidents saw growth in government jobs (at the federal, state, and local levels). But for the Obama administration, with again the exception of the Census hiring in May 2010, the trend line of government jobs bucks the previous four presidencies, with most employment losses coming in state and local governments.

While both the Romney and Obama camps will adapt facts to their campaign strategy and spin, it is important to see things in a complete and comparative analysis going into this fall’s campaign. But I’m afraid that in the war of campaign rhetoric and spin, the only casualty may be the facts.

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