On the economy, President Joe Biden’s critics say he has a substance problem. The White House and its allies say Biden has a messaging problem. Both are true.
Last Friday, the government released employment data for May. Left-wing media presented the report as good news, showing that the economy created 270,000 jobs. In fact, the data was terrible for ordinary Americans. This shows that less Americans were working in May than in April, and those who were employed had to work more jobs to make ends meet. These are important economic issues for Biden.
The enthusiastic response from the White House and pro-Biden media illustrates the disconnect between experts, bureaucrats and academics, on the one hand, and American workers, on the other. Americans don’t particularly like it when their leaders celebrate their economic woes. This is Biden’s messaging problem.
Number of jobs compared to the number of people working
There are two different ways to view employment data. The first is to examine how many jobs people have. The second is to look how many people have a job.
Consider, for example, an economy with three people and three jobs. Such an economy could have three people each with a job and no unemployed. Alternatively, such an economy could have one person working three jobs and two people unemployed. The May jobs report shows a trend toward the latter scenario rather than the former.
The government tracks and publishes both sets of employment data – that’s how we know the May employment data was really bad. The pro-Biden media is only hearing about the first round of data, which shows an increase in “all employees” of about 270,000 between April and May.
The problem is that this number counts double (or triple or quadruple) the people who have to work more than one job to make ends meet. This is because only one person counts as a different “employee” for each separate employer. In other words, the data set touted by the White House and left-wing media tells us little about how many Americans are actually working.
This information is contained in a separate report, titled “Employment Levels,” which is largely ignored by the pro-Biden media. As this report explains, “(each) employee is only counted once, even if they hold more than one job”. This data set tells us how many Americans are actually employed at any given time. From April to May, this issue decreases by more than 400,000 people. In other words, in May 2024, 400,000 fewer Americans were employed than in April 2024.
This also means that the so-called net jobs “added” by Biden in May are just more Americans forced to work. additional jobs. Data for May thus show an increase (compared to April) of 15,000 people holding at least two jobs. Indeed, since the same time last year, 629,000 more Americans have had to take at least a second job.
Even these numbers don’t entirely add up. To fully reconcile Biden’s so-called May job “gains” with the even greater decline in the number of Americans actually employed over the same period, one must conclude that many people are taking jobs. three or more jobs make ends meet.
The government does not report this figure separately (i.e. it does not distinguish between “multi-job workers” who hold two jobs and those who hold three or more jobs). Therefore, a person who had two jobs in April, but three jobs in May, is simply recorded as “working multiple jobs” in both months.
Nonetheless, collectively, the data suggests that many people work three or more jobs. There were 400,000 fewer people working in May. However, 270,000 additional jobs were created. People who moved from one job to two in May, according to government figures, make up only part (around 15,000) of that difference.
All government figures are subject to sampling error, making it impossible to determine the precise number of people working more than two jobs. But data trends nevertheless strongly suggest that large numbers of Americans are forced to work three or more jobs.
In short, Biden and his media allies are celebrate that fewer Americans are working and those who are working have to work even harder. This is where the disconnect between Biden and ordinary Americans becomes evident. Americans disagree that fewer Americans working, and Americans having to work harder to survive, are reasons to celebrate.
More terrible news in May data
There’s plenty of other bad news in the May jobs data. While overall employment declined by 400,000 Americans in May, full-time employment fared much worse.
From April to May, the number of Americans in full-time employment decreased by 625,000. Over the past 11 months, the number of Americans in full-time employment decreased by more than 1.5 million . In effect, the economy has replaced full-time jobs with part-time jobs. These are truly horrible things for Biden and his allies to celebrate.
U.S. job openings fell by about 290,000 during the last monthly reporting cycle. Thus, the 270,000 jobs “gained” in May do not appear to be new jobs “created”. If anything, the increase in May’s employment numbers seems to indicate that people are simply accepting already existing job offers (again, most likely as additional employment).
The unemployment rate also increased in May to 4.0 percent, an increase of 0.5 percent over the last ten months alone. It’s a bad sign. But it’s a terrible sign considering that the labor force participation rate has fallen at the same time.
Generally, the unemployment rate and the participation rate have an inverse qualitative relationship. When the activity rate decreases, the unemployment rate should tend to improve, all other things being equal. This is because it is easier for an economy to provide enough jobs to keep the unemployment rate low when fewer people are looking for work.
May experienced the worst possible combination of these circumstances. The labor force participation rate has gotten worse, but the unemployment rate has also gotten worse. This combination signals a recession (as does the recent downward revision of already weak first-quarter GDP).
Even in isolation, the decline in the activity rate in May is very alarming. Low labor force participation is a hallmark of Bidenomics, along with high inflation, high interest rates, declining real incomes, depleted personal savings, and increasing consumer debt. Despite more than three years of Biden’s so-called “recovery,” the United States is far from returning to its pre-pandemic level of labor force participation.
Additionally, the Trump administration delivered most of the recovery, adding 1.4% to the labor force participation rate in just six months following the low point of the Covid pandemic. Biden has added just 1.0 percent to labor force participation in 41 months. In fact, it was this low labor force participation rate throughout Biden’s term that kept the unemployment rate artificially low.
Sustained low labor market participation is an economic time bomb. Labor participation establishes the tax base from which federal and state governments obtain their operating funds. Work participation defines the basis from which payroll taxes – which support soon-to-be insolvent Social Security and Medicare programs – are drawn. These programs need an ever-increasing workforce to survive.
Bad economic news is bad. Celebrating bad economic news is worse. If Biden doesn’t quickly fix both of these problems — a seemingly impossible task at this point — November voters will fix the problems for him.
Joseph LoBue is a retired naval officer and attorney.