Stimulated Loss in Workforce

In February of 2009, the Democrat Congress and President Obama signed into law the $831 billion "Stimulus package" intended to revitalize the economy and put Americans back to work. (see HERE)

Supposedly, this was an attempt to keep Obama's promise that  "Jobs must be our number-one focus" (see HERE and HERE) and  "I will not be satisfied until everyone who wants a good job, are offered some security, has a good job." (ibid)

 Here is the seemingly good news first: while the unemployment rate skyrocketed to around 10% between 2009 and 2010, it has since slowly declined to 5.1% in 2015 (see HERE).

And, Obama has claimed to have created more than 10 million new jobs during his administration (see HERE)--which misleadingly ignores the 4.9 million job losses, making a net increase of 4.5 million jobs (see HERE), which is still seemingly impressive,,

Now, for the bad news: many of the new jobs created since 2009 were part time (See HERE and HERE and HERE), and the employment and job numbers don't account for the increasing number of people working multiple part-time jobs. (see HERE)

Also, an increase portion of the new jobs are lower wages. (see HERE and HERE and HERE and HERE)

Even worse, in spite of the improved employment and job numbers, there are approximately 5.6 million less eligible people working than when the president took office. There are currently 93.6 million people who are of age not in the labor force. (see HERE)

How is that possible, you ask? Well, the employment and job numbers don't factor in population growth, or more particularly the expanding population of the workforce--people aged 16 and older.

As John Lott explains: "Since the recovery started in July 2009, the working age population has grown by 213,000 people on average each month. Normally about 60 percent of the working age population is working. Thus, it would have been necessary to add about 128,000 jobs each month just to keep the share of the working age population employed from falling.  That means that a minimum of a little over 4.7 million jobs had to be created during the recovery just to keep us treading water. That growth wouldn't have done anything to make up for the huge job losses that we had suffered up to that point. In fact, only 2.7 million jobs have been added over that time period - 2 million jobs short of what we needed just to keep from falling further behind." (see HERE)

There are various other factors to explain the remaining 2.9 million eligible workers who aren't working, such as the increase number of people on disability (see HERE and HERE), long-term unemployment (HERE), retiring (see HERE and HERE), and simply giving up looking for work, etc..(See HERE and HERE)

The bottom line is, whatever spin people may wish to put on things, the near 1 Trillion dollar jobs creation bill ended up with 5.6 million less people working, and the lowest workforce participation rate in 38 years. (see HERE and  HERE and HERE and HERE), and even the lowest "Prime Age" (25 - 54)  participation rate since the 1980's (see HERE), This translate into about $150k per lost worker.

Money well spent?