John Kerry didn’t make it through the third paragraph of his formal announcement speech before stumbling over a key fact about the U.S. economy. In his Sept. 2 speech in South Carolina, Kerry claimed the U.S. is suffering “the greatest job loss since the Great Depression.” That’s wrong.
Comparing the current job slump to the Great Depression is ludicrous. In the 1929-1933 economic disaster an estimated one in four American worker were idle. There’s been nothing remotely like it since. In the Bush slump unemployment peaked at 6.4% before it started to decline due to strong economic growth. The unemployment rate has been higher than that in seven of the nine previous slumps going back to 1950. The worst unemployment since the Great Depression actually was in Ronald Reagan’s first term, when it peaked at 10.8% in November and December of 1982.
Kerry based his claim on raw numbers of jobs lost, but he still got it wrong. The standard measure of payroll jobs — what the Bureau of Labor Statistics calls “total nonfarm employment” — declined by just over 2.7 million between its peak in February 2001 and August 2003, when it hit bottom. That’s fewer jobs lost than in the much more severe Reagan downturn, when more than 2.8 million jobs were lost.
Furthermore, Kerry’s distortion is even worse when population growth is taken into account.Measured as a percentage of peak employment, Bush’s job loss was just over 2% of all jobs, compared to more than 3% in the Reagan downturn.
Analysts at the labor-funded Economic Policy Institute state that this was “the worst hiring slump since the Great Depression,” but they were careful – as Kerry and many other Democrats are not – to make clear that they were speaking only of private sector jobs, not total jobs. But the EPI statement is itself misleading, ignoring the fact that government hiring grew even while private-sector businesses shed jobs. As a result, looking only at private jobs makes the job picture look more bleak than it really is. It is true that nearly 3.3 million private sector jobs disappeared between the peak of employment in February 2001 and the depth of the job slump in August, 2003. And that is the highest number of private-sector jobs lost during any slump since 1939 when records first were kept. But that ‘record’ is due mainly to population growth, not to the severity of this downturn.
Furthermore, many of the government jobs that EPI’s analysis ignores are better than the private sector jobs that disappeared. For proof of this, look no further than the 50,000 federal airport security screeners who now work for the Transportation Safety Administration, replacing low-wage contract employees.
John Kerry, “Kerry Announcement Speech,” Patriot’s Point SC 2 Sept. 2003.