James Pethokoukis

Politics and policy from inside Washington

Obama vs. Perry on jobs

August 17, 2011

All kinds of numbers have been flying around comparing President Barack Obama’s jobs record vs. Gov. Rick Perry’s. The employment number most people know is the unemployment rate. The most recent state numbers, through June, put the Texas unemployment rate at 8.2 percent. The national unemployment rate that month was 9.2 percent, worse but not dramatically so.  But that is the U-3 rate, and it does not include discouraged workers. Here is how the Labor Department describes things:

Discouraged workers (U-4, U-5, and U-6 measures) are persons who are not in the labor force, want and are available for work, and had looked for a job sometime in the prior 12 months. They are not counted as unemployed because they had not searched for work in the prior 4 weeks, for the specific reason that they believed no jobs were available for them.

Because those sorts of folks are excluding from the U-3 measure, the labor force participation rate has been falling as has the official size of the U.S. labor force.  The rate was 63.9 percent in July and 64.1 percent in June, down from 65.7 percent in January of 2009. The Texas labor force participation rate was 65.6 percent in June, higher than the national average. That means there were more folks active seeking work, a reflection of the more positive job environment.

Bottom line: So let’s do an apples-apples comparison. What if the national labor force participation rate was as high as that in Texas? Well, the national U-3 unemployment rate would have been 11.3 percent in June, sharply higher than the 8.2 percent rate in Texas. And what if the Texas labor force participation rate had been as low as the national rate? Under that scenario, the Texas unemployment rate would have been 6.1 percent, also dramatically better. So either way you cut, the unemployment rate is much better in Texas than the national average. Score one for Rick Perry.

For a more wide-ranging analysis, please check out this post at Political Math.

 

Comments

Great read. Unfortunately, you have a media seeking Obama’s re-election — this information won’t reach much further than Reuters.

Posted by gowejifw | Report as abusive
 

First–31 of 50 states are out-performing the national average in terms of job growth. It just so happens, Perry governs one of them. It would appear his isn’t actually in the ‘elite’ company his claims suggest.

Second, building off that–you can’t argue a governor is responsible for the financial well-being of states that do well relative to the nation, but that the President is responsible for the ones that don’t. If Obama is responsible for California, he’s responsible for Texas. And if there is a direct correlation between a state’s unemployment and the governor, then Rick Perry is only the 25th best governor in the country. Does that really make him Presidential material?

Last, causality is still an important issue. You could argue that Texas has better employment than the rest of the US, and the Political Math link may make an argument against certain causal arguments, but to argue Obama vs. Perry would seem like a jump. It seems like the best indicator of a state getting through the recession may be it’s commodity-related industry: http://online.wsj.com/article/SB10001424 052748704034804576025411275078954.html.

Could that explain a lot of Texas’ “success”? Very possibly. Looking at other commodity-rich/reliant states unemployment levels: KS 6.6%, ND 3.2%, NE 4.1%, IA 6.0%, OK 5.3%, PA 7.6%, SD 4.6%, AL 7.5%. It doesn’t seem Texas is all that special a case to me…

Posted by crazyksn | Report as abusive
 

The U.S. Communist party endorsed Obama in 2008 and they endorse him for 2012.

Posted by HillarysHusband | Report as abusive
 

The U.S. Communist party endorsed Obama in 2008 and they endorse him for 2012.

Posted by HillarysHusband | Report as abusive
 

Guess what, Teabaggers. Between 2007 and 2010, Texas created 47% of all government jobs in America. This is due to the fact that Perry used the stimulus package to fill his budget gap, and it led to surges in hiring for education and health care. There were 125,000 net gains in public sector employment over that time, with 178,000 net LOSSES in the private sector. Whoops!

So if you break this down, the kind of policies Rick Perry would then bring from Texas to the US are more generous immigration policies that allow more immigrants into the country, stronger mortgage regulation and consumer protection, and more government jobs.

Like Alaska, Texas is a socialist paradise. The “Texas Miracle” is taxpayer financed one. Perry made the right call using taxpayer money to save jobs, just as the “disastrous” Obama administration intended. Score one for Obama. Maybe James Pethokoukis can explain how this all dovetails with Perry’s economic philosophy and campaign rhetoric.

Posted by GetpIaning | Report as abusive
 

RE Getplaning:

You remarks are baseless.
see http://www.politicalmathblog.com/?p=1590

Posted by cnbEllisCounty | Report as abusive
 

cnbEllisCounty, I’m glad you posted that link, because it confirms everything in my “baseless” post. Makes me wonder if you actually read it. We all know the private sector basically has put a freeze on hiring, due to all this “uncertainty.” As conservatives like to point out, only the government is hiring. And between 2007 and 2010, Texas created 47% of all government jobs in America. This is confirmed in Shapiro’s chart showing Texas with a wide lead over other states in job creation over that period.

“Texas median hourly wage is $15.14… almost exactly in the middle of the pack (28th out of 51 regions). Given that they’ve seen exceptional job growth (and these other states have not) this does not seem exceptionally low. Since the recession started hourly wages in Texas have increased at a 6th fastest pace in the nation.” That’s because government jobs like teaching and healthcare services actually pay pretty well, unlike lower wage jobs currently available in the homebuilding sector and the booming private prison industry.

Posted by GetpIaning | Report as abusive
 

This is just a consequenc­e of Texas having a younger population than the rest of the country. If you look at the data you will find that Texas has a LOWER labor force participat­ion rate than the rest of the United States for EVERY age group.

The data for 2008 is at http://agi­ngandwork.­bc.edu/doc­umen ts/sta­tes/Texas.­pdf

If you believe that holding labor force participation rates constant is an “apples-to-apples’ comparison then try doing that separately by age groups. You will find that Texas unemployment rates are mediocre at best.

Posted by dennisP | Report as abusive
 

Getplaning, you seem to have forgotten this.

“But, just in case you’re really worried about it, you can lay your fears to rest because in the last year the Texas public sector has shrunk by 26,000 jobs. In the last 12 months, Texas lost 31,300 federal employees, trimmed 3,800 state jobs, and increased local government jobs by 8,400 jobs”

Pointing out one and ignoring the other because it does not support the point you are trying to make is dishonest.

Posted by JimboC | Report as abusive
 

Kind of like what Pethokoukis does on a daily basis. Which time frame gives the most accurate picture? “In the last year”, or “between 2007 and 2010?”

Governor Perry has floated the idea of Texas leaving the Union. Given that 47% of all government jobs created in the US between 2007 and 2010 were in Texas, and paid for with federal money, where would Texas’ unemployment rate be if Texas actually did seceed?

Posted by GetpIaning | Report as abusive
 

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