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A Project of The Annenberg Public Policy Center

Perry Misleads on Jobs

Texas Gov. Rick Perry used grossly misleading statistics to criticize the unemployment picture under President Obama. Perry said there are “90 million people that are out of work” and “more women out of the workforce now than at any time in our history.” The 90-million figure includes teenagers, retired seniors and only 6 million people who want a job. The women’s labor force participation rate is more than one-and-half times what it was in 1948 — not surprisingly.

Those weren’t the only claims about employment that Perry made in a May 4 interview on NBC’s “Meet the Press.” He also boasted of 95 percent of Texas workers earning above the minimum wage. The state has improved in this regard. In 2010, it was tied for first with Mississippi for the percentage of hourly workers earning at or below the minimum wage. In 2013, Texas had moved down to fifth among the states.

90 Million ‘Out of Work’?

Perry told “Meet the Press” host David Gregory: “I’m really worried about those 90 million people that are out of work.” That would mean Perry is worried about retirees not working, as well as high-school students. In fact, only 6 million of that figure are people who “want a job,” according to the Bureau of Labor Statistics.

The most recent numbers from BLS show there were 92.6 million Americans age 16 and over who were “not in the labor force.” (That’s the “not seasonally adjusted” number for April 2014.) The “labor force” includes all of the employed and unemployed, as defined by BLS. To be officially “unemployed,” a person without a job must have made some effort to find employment in the four weeks before the BLS survey is taken. That means those who are counted as “not in the labor force” aren’t working and haven’t looked for work in the past month.

The vast majority don’t want a job, and for good reason. For instance, the 92.6 million figure includes 36 million Americans of retirement age — 65 and older — 17 million of whom were 75 and older. It also includes 11 million teenagers — age 16 to 19 — many of whom aren’t looking for jobs. It includes 6.8 million 20- to 24-year-olds, some of whom are in college. Those not in the labor force would also include millions of stay-at-home parents, early retirees and anyone else who didn’t need or want to work.

BLS’ breakdown of those not in the labor force shows that only 6.6 percent of them — or 6 million people — want a job. They are about evenly divided among those who haven’t looked for employment in the past year, and those who have searched for work in the past year but not in the past four weeks. The rest of those not in the labor force — more than 86 million people — are in a category BLS calls “do not want a job now.”

Meanwhile, the unemployed — those who are actively searching for work — numbered 9.8 million in April. An additional 7.5 million were working part-time for economic reasons, and 2.2 million were “marginally attached” to the labor force. Those “marginally attached” are not in the labor force because they haven’t searched for a job in the past four weeks, but they had looked for work at some point in the past year. Among those 2.2 million were 783,000 discouraged workers, those who stopped looking for work because they think there’s nothing available, and 1.4 million who stopped looking for work because of family responsibilities, deciding to attend school, poor health or other reasons. That’s all according to the latest BLS jobs report, which uses seasonally adjusted numbers.

There are several categories in the BLS report for Americans who are unemployed (9.8 million), underemployed (7.5 million) and those not in the labor force who want a job but aren’t actively looking (6 million). That all adds up to 23.3 million, a far cry from 90 million.

Another gauge of Americans’ employment would be the employment-population ratio, which is the percentage of the total population, 16 and older, that is employed. That figure was 58.9 percent in April, down from 60.6 percent when Obama took office in January 2009. In fact, the employment-population ratio has been below 60 percent for most of Obama’s presidency, and previously, it hadn’t dipped below that mark since July 1985.

The civilian labor force participation rate — the percentage of the civilian population working or looking for work — is also down under the Obama presidency. It was 65.7 percent in January 2009 and 62.8 percent in April this year. But both of these measurements have been on downward trajectories since peaking in early 2000. Beyond the economy, there is some impact from the aging of the population. Those 65 and older made up 12.4 percent of the U.S. population in 2000, and 13 percent in 2010. That’s expected to jump to 16.1 percent by 2020, according to Census data.

BLS projections through 2022, in fact, show the labor force participation rate will continue to decline because the movement of baby boomers into older age groups “will exert heavy pressure on the overall participation rate.” In a December 2013 report, BLS said: “Of note is the fact that the drop in the labor force participation rate was just 0.6 percentage point during the 2007–2009 economic downturn whereas, between 2009 and 2012, since the end of the recession, the rate declined by another 1.7 percentage points. A major factor responsible for this downward pressure on the overall labor force participation rate is the aging of the baby-boom generation.”

As we noted in our latest “Obama’s Numbers” article, another factor is an increase in disabled workers getting Social Security disability benefits.

Working Women

Perry also painted a bleak, and inaccurate, picture for working women, saying “the idea that there are more women out of the workforce now than at any time in our history, that’s just not right.” It’s not right. The governor’s press office pointed us to figures showing the women’s labor force participation rate was at its lowest level since 1988.

The labor force participation rate for women, ages 16 and above, was 56.9 percent in April 2014. It was lower than that in October 2013 at 56.8 — the lowest rate since October 1988. Of course, these are all much higher numbers than we see if we go back to “any time in our history,” as Perry said.

BLS numbers go back to January 1948, when women’s labor force participation rate was 32 percent. And it would have been lower in 1890, when a RAND Corp. report estimates that 17.3 percent of working-age women — back then, it was age 10 and older — were in the labor force. The times certainly have changed.

And like the overall labor force participation rate, the rate for women peaked in early 2000 (at 60.3 percent) and has been declining since. Part of the reason, again, is the aging of the population. BLS expects the decline to continue.

BLS, December 2013: Over the 2002–2012 decade, the participation rate of women dropped by 1.9 percentage points, to 57.7 percent in 2012. The women’s participation rate is expected to continue to decline by 1.7 percentage points and drop to 56.0 percent in 2022.

In terms of unemployment, women have a lower rate (6.1 percent) as of April than men (6.4 percent). But the unemployment rate for men has fallen more dramatically under Obama: Women’s unemployment rate was 7 percent when Obama took office in January 2009, and the rate for men was 8.6 percent.

Texans and the Minimum Wage

When asked whether the politics on the minimum wage were shifting for the Republican Party, Perry responded: “Well, we focus on the maximum wage rather than the minimum wage. Ninety-five percent of all the jobs that were created in my home state were above the minimum wage.”

Lucy Nashed, Perry’s press secretary, told us the governor meant to say, as he has in the past, that “95 percent of all the wages in Texas are above minimum wage.” So, it’s not a figure on new jobs created.

BLS only gives information on the number and percentage of hourly workers paid at or below the minimum wage. But Nashed says the governor’s figure is calculated by using BLS’ figures and the total Texan workforce.

In 2013, 6.4 percent (or 400,000) of hourly workers in Texas earned at or below the minimum wage, BLS said. Nashed says the total employment for Texas, including hourly and salaried workers, was nearly 11.2 million. Assuming anyone earning a salary is paid above the minimum wage, that would mean 3.6 percent of all Texan workers earned at or below the minimum wage and 96.4 percent earned above it.

Is this significant? The nation as a whole has a lower rate of minimum wage workers than Texas. If we use the same calculation as Nashed — with 136.4 million workers in the country — we get 2.4 percent of all workers earning at or below the minimum wage and 97.6 percent earning above it.

But Texas has shown some improvement in recent years. In 2010, 9.5 percent of workers paid hourly rates earned at or below minimum wage in the state. That was the highest percentage in the nation, tied with Mississippi. In 2013, Texas’ percentage of hourly workers making at or below minimum had dropped to 6.4 percent. That’s good for fifth place. Tennessee is now first with 7.4 percent. And Idaho, Arkansas and Alabama also have higher percentages of hourly workers earning at or below the minimum than Texas.

— Lori Robertson