by Richard Manning
The White House Facebook page crowed, “3,000,000 jobs created since President Biden took office” in response to the Labor Department’s Employment Situation report on July 2. But do they deserve any credit for these job gains?
The answer is no.
Three million jobs in the past five months is an impressive number, but it is in line with the average number of jobs recovered going back to July 2020 when Republican governors began reopening their states. As the chart above shows, the economic shutdown began in March of 2020 with the major crash registered in April with about 22.1 million jobs lost from just two months before.
As a reminder, Americans for Limited Government was among the first urging the Trump White House to push hard for the re-opening in March and April sending more than a hundred videos from small businesses on the verge of bankruptcy to economic decision makers in the White House and providing comments from key small business leaders about the disastrous impacts of the shutdowns. It was the courageous decisions by the Trump White House and states led by Republican governors which minimized damage.
As the economy re-opened a little bit at a time, the number of jobs restored jumped by almost 10 million in the months of May through July, and continued an average growth of 525,000 a month from August through the January 2021 report. Since Biden took office the average job gain per month has been just over 600,000 – once again – a good number on the surface.
But here is the ugly truth – the six largest states by population with Democrat governors which voted for Biden made up 31 percent of the nation’s population, but had 39.4 percent of the job recovery from February through May (state data for June is not out yet.)
Conversely, the six largest states by population with Republican governors which voted for Trump made up 25 percent of the nation’s population, but had 14.8 percent of the job recovery.
What’s more, the top six Democrat states had an average drop in their unemployment rate of .75 percent while the top six GOP states had an average drop in their unemployment rate of .15%.
The good news for GOP states, with the exception of Ohio, which were relatively open compared to their Democrat peers, is that each of their unemployment rates were significantly below the national average both in January and May of 2021. Conversely, the Democrat run states suffered from the worse jobs recovery on the whole.
This all proves that President Biden’s claim to have “created” 3 million jobs is specious. The facts show those jobs were disproportionately recovered in states which engaged in draconian shutdowns. These shutdowns were driven by politics and not science, and it would be stunning if they were not recovering jobs at a rapid pace now that it was politically advantageous to have economic growth.
Biden had little to nothing to do with the jobs growth which was artificially stunted due to political considerations in states like California, New York, and Illinois. With Democrat states still, on average, significantly less recovered than Republican states (of few of which have lower unemployment rates today than before the pandemic), one can expect continued job gains amongst these laggards based upon positive effects of their fully reopening.
The question will be what happens when they narrow the gap further as their job recovery cycle matures. That will be when we find out if Biden’s policies are net job creators or are a negative to the economy. And I don’t think anyone in the Biden administration would take the bet that they will best Trump’s record 3.5 percent unemployment rate at any time during his four years in office.
So, as they self-congratulate remember, they, like the President himself, have no idea how they got to where they are and no plan to unleash the private sector economy to sustain the natural job recovery which they have lucked into.
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Richard Manning is President of Americans for Limited Government.