Remember when Obama casually used the phrase ‘jobs saved or created’ to describe the impact the economic stimulus program would have on unemployment? We’ve always been uncomfortable with that flimsy phrase—after all, there is a big difference between saving a job at a government bureaucracy and, say, creating a new one at a private company. Today, The Heritage Foundation is out with some illuminating analysis about unemployment and economic recoveries work. It turns out that losing jobs isn’t what drives unemployment—it’s the absence of new jobs:
So why is our economy having such a tough time pulling out of recession? Here are the facts: the most recent data available show that the U.S. economy actually lost fewer jobs during this recession than were lost during the 2001 recession. Specifically, 50.8 million jobs were lost through the first six months of the ‘01 recession while 48.2 million jobs were lost through the first six months of this recession.
But if out economy is losing fewer jobs this time, then why is our unemployment rate so much higher under President Obama’s stewardship of the economy? The answer: job creation. Or actually the lack thereof. Back to the BLS data: through the first six quarters of the 2001 recession 47.6 million jobs were created, while only 40.3 million jobs have been created through the second quarter of 2009. That’s a 7.9 million jobs gap. The reason our unemployment rate is so much higher now is low job creation, not high job loss.
So this whole business of saving jobs is almost irrelevant to the unemployment situation. The key is job creation. So to deploy a phrase like ‘jobs saved or created’ is to conflate two distinct and very different economic realities. It’s really quite a masterpiece in political doublespeak.