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In the Fifth Year of the “Obama Recovery,” Another Discouraging Labor Day for American Workers

August 30, 2013

Economists say the 2007-09 recession officially ended in June 2009.  Yet, as the fifth year of the “Obama Recovery” begins, American workers are facing another discouraging Labor Day.  Let’s take a look at some of the hallmarks of the “Obama Recovery”:  

  1. Worst jobs recovery ever; 
  2. Rising part-time employment;
  3. Declining wages; 
  4. Growing workforce dropouts; and,
  5. Rapid rise in adult children living with their parents. 

These data show an economy still struggling to get back on its feet, despite the President’s jobs road show, trillion-dollar stimulus plan, and continued promises that Obamacare and related policies will finally yield government-led prosperity.  Given these continued disappointments now into the fifth year of the “Obama Recovery,” it is time for real solutions to stoke the engine of the U.S. economy, such as comprehensive tax reform which will strengthen our economy, create jobs, and increase wages. 

1. Worst Jobs Recovery Ever

The Obama Administration promised in 2009 that their trillion-dollar stimulus plan would create 3.5 million jobs and reduce unemployment to 5 percent by now.  Then in 2010, then-Speaker Nancy Pelosi promised that Obamacare would create another 4 million jobs, declaring it “a jobs bill.”  Unfortunately for the American people, none of that has actually happened.  Instead, the U.S. economy continues to experience the worst jobs recovery ever – and the only one in which all the jobs lost during the recession had not been restored by this point in the recovery.

Source: Calculated Risk Blog, Percent Job Losses During Recessions.


2. Rising Part-Time Employment 

Although the Obama Administration promised their stimulus and related policies would create millions of good-paying, full-time jobs, the vast majority of employment growth during the Obama Administration has been in part-time positions.

   January 2009  July 2013  Change
Part-Time Employment   26.351 million  28.233 million  +1,882,000 (+7.14%)
Full-Time Employment  115.820 million  116.090 million     +270,000 (+0.23%)

Source: Department of Labor, Bureau of Labor Statistics

For a sense of scale, part-time employment growth during the Obama Administration most closely resembles the total population of Philadelphia (at 1.5 million the nation’s 5th most populous city), while full-time employment growth compares with the population of Henderson, NV (at 266,000 the nation’s 71st most populous city).  In short, we have added a Philadelphia of part-time employees, compared with a Henderson, NV of full-time employees, during the Obama years. 

If anything, this phenomenon has accelerated rapidly as Obamacare implementation has progressed, with the share of new employment in part-time positions surging in 2013 compared to prior years:

Source: Forbes

3. Declining Wages

With the recent surge in part-time employment, many have expressed concerns about Obamacare cutting employees’ hours and wages.  Despite White House denials, evidence supporting this trend continues to mount.  For example, real average weekly earnings fell 0.5 percent in July 2013, and have now fallen for three straight months and seven of the last 12 months.

But part-time employees are not the only ones losing out on wages.  Median earnings among full-time workers have been declining as well since President Obama took office: 

Median Usual Weekly Earnings, Wage and Salary Workers, Employed Full Time*

Source: U.S. Department of Labor, Bureau of Labor Statistics.

*Constant (1982-84) dollars, Not Seasonally Adjusted, All Industries, All Occupations, Both Sexes, All Races, 16 years and over

4. Growing Workforce Dropouts

As record long-term unemployment became the norm during the “Obama Recovery,” record numbers of individuals also have given up hope of finding a job, stopped looking for work, and dropped out of the workforce altogether.  Throughout the Obama Administration, the number of adults not in the labor force has grown by almost 9.5 million while total employment has grown by only 2.1 million. As a result, there have been almost 5 new workforce dropouts for every new employee, a dismal record – especially this deep in the “Obama Recovery.” 

Almost 5 Adults Have Left the Workforce for Every New Employee during the Obama Administration

Source: U.S. Department of Labor, Bureau of Labor Statistics.

5. Rapid Rise in Adult Children Living with Their Parents

Certain groups have suffered more from the “Obama Recovery” than others, starting with younger workers.  An MIT study found that the median household income for those between ages 25 and 34 dropped a staggering 8.9 percent between June 2009 and June 2012 – that is, during the first three full years of the “Obama Recovery.” A Harvard study notes that of those under age 30, just 62 percent are currently working, and of those “half are toiling at part-time jobs.”  And as displayed below, a rapidly rising share of young adults between ages 18 and 34 (including nearly 1 in 7 of those ages 25-34) have had to move back into – or never left – their parents’ home as the “Obama Recovery” has ground on.