Trump doubts government reports of low unemployment
The monthly employment report from the Department of Labor, set to be released Friday, is likely to provide political fodder for the Republican and Democratic presidential candidates as the November election approaches. Job growth soared by 287,000 in June, and the labor market is expected to have returned to the longer-term trend of moderate growth in July. The consensus among economists is for 185,000 new jobs added with the unemployment rate falling 0.1 percent to 4.8 percent.
The unemployment rate has fallen during President Barack Obama’s tenure from a high of 10 percent in October 2009, to 4.9 percent in June 2016. That would seem to provide a relatively strong economic record for Democratic candidate Hillary Clinton to run on, yet Republican rival Donald Trump and his surrogates have consistently cast doubt on the low, and steadily declining, unemployment rate reported by the Bureau of Labor Statistics.
Trump and his son, Donald Trump Jr. have repeatedly charged in speeches and interviews that government unemployment statistics are politically manipulated to make the Obama administration look better. They claim that the actual jobless rate is much higher — by a factor of five or more.
For instance, Donald Trump, speaking after he won the New Hampshire primary in February, said: “When people look and look and look, and then they give up looking for a job, they’re taken off the rolls, so the number isn’t reflective. I’ve seen numbers of 24 percent, I actually saw a number of 42 percent unemployment—42 percent. And it could be.”
Donald Trump Jr., in an interview with Jake Tapper on CNN’s Sunday show “State of the Union” on July 24, said: “These are numbers that are massaged, to make the existing economy look good, to make this administration look good, when in fact, it’s a total disaster.”
We could not find a prominent economist — liberal or conservative — to give any credence to the charge of political manipulation of the BLS employment statistics, a charge that has surfaced in previous elections going back to the Eisenhower Administration.
Douglas Holtz-Eakin served as a senior economist during both Bush administrations and now directs the American Action Forum. “The notion that somehow they are gamed politically is nonsense,” said Holtz-Eakin of the jobs data. “If political superiors were to attempt to force the BLS to come up with the quote ‘right answer,’ lower the unemployment rate, the career staff would be calling you and leaking this to every whistleblowing outfit under the sun. There’s no way an administration could ever get away with doing that.”
The claim that unemployment is actually higher than the government reports is a bit more complicated.
Marketplace and most other business media focus primarily on the base rate of unemployment — the U-3 rate, which was at 4.9 percent in June. It counts as “unemployed” anyone who tells BLS survey takers that they have looked for work in the past four weeks and not found a job.
By the broadest government measure, the U-6 rate, unemployment is at 9.6 percent as of June 2016. That rate includes people who are discouraged and marginally attached to the labor force, and haven’t looked for a job recently but have looked at some point in the past year. It also includes those working part-time for economic reasons (that is, they want full-time work but can’t find any).
An even higher unemployment rate could theoretically be calculated based on BLS statistics by including adults — the category is defined as age 16 or older — who have dropped out of the labor force entirely because they don’t want or need to work, or are disabled, retired, attending school, or caring for children or elders.
But experts said using these government statistics, it is still impossible to arrive at an unemployment rate as high as 24 to 42 percent, as Donald Trump has suggested the “real” unemployment rate might be.
However, economists are in agreement that many Americans have the impression that the economy and job market are in fact significantly worse than government statistics indicate.
“The unemployment rate has improved dramatically in recent years,” said Harvard economist Lawrence Katz. “Yet many people seem to feel like the economy is not performing as well as it can.”
Katz attributes that heightened sense of economic insecurity and malaise among American workers to the weak recovery, and to long-term structural changes in the job market. In particular, Katz cites very weak wage growth since the recession ended, rising income inequality, as well as continued elevated levels of underemployment (people wanting full-time work but only able to find part-time work) and long-term unemployment.
Allegations that the Department of Labor’s employment data are politically manipulated, meanwhile, have a long history, going back more than 50 years.
Liberals charged in 1960 that the Eisenhower administration withheld a poor October employment report to help the Republican nominee, Richard Nixon, in the presidential race against Democrat John F. Kennedy. In 1971, according to White House tapes, Republican president Richard Nixon ordered a senior administration official to identify and purge Jewish staff members (or those suspected of being Jewish) at the Bureau of Labor Statistics; Nixon apparently thought they had a leftist bias and were skewing labor market data to hurt his administration.
And in October 2012, Jack Welch, the former CEO of General Electric, alleged in a tweet that the Obama Administration had influenced the September BLS jobs report to deliver a steep decline in the unemployment rate, which had dropped below 8 percent, to benefit Obama and hurt Republican candidate Mitt Romney in the upcoming 2012 election.
Welch’s tweet read: “Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers.” No evidence was found to back up the allegation.
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