Obama-Nelson economic record: Job creation ... at slowest post-recession rate since Great Depression.
As U.S. Senate candidates in Florida gear up their 2012 campaigns, job creation is a hot topic. Republican and former state legislator Adam Hasner criticizes the Democratic incumbent -- Sen. Bill Nelson -- and President Barack Obama for sluggish job creation. "Obama-Nelson economic record. Job creation ... at slowest post-recession rate since Great Depression," Hasner tweeted on May 23, 2011. Many politicians and experts have talked about the "jobless recovery" -- when the economy rebounds but with lackluster job creation. But we wanted to check whether job creation after the most recent recession has lagged behind job creation after every other recession since the Great Depression? On May 26, Hasner adviser Rick Wilson e-mailed us a May 20 USA Today article linked to in the tweet, which stated "Nearly two years after the economic recovery officially began, job creation continues to stagger at the slowest post-recession rate since the Great Depression. The nation has 5% fewer jobs today — a loss of 7 million — than it did when the recession began in December 2007. That is by far the worst performance of job generation following any of the dozen recessions since the 1930s. In the past, the economy recovered lost jobs 13 months on average after a recession. If this were a typical recovery, nearly 10 million more people would be working today than when the recession officially ended in June 2009." We wanted to do our own checking on job recovery. First, we obtained the dates of recessions back to the Great Depression from the National Bureau of Economic Research, a nonpartisan research organization based in Cambridge, Mass. NBER's website has a chart listing the dates of the recessions (written as "peak and trough"). The "contraction" line is the length of each recession. According to NBER, there have been 13 recessions since the one that started August 1929 and lasted for 43 months, and the U.S. Bureau of Labor Statistics has month-by-month jobs data for 12 of them. The most recent recession was from December 2007 to June 2009, or 18 months. It's worth noting that although voters may judge Obama on job creation, that recession was well under way before he was elected president in November 2008. We contacted economic experts to ask them about Hasner's claim. Heidi Shierholz, an economist at the Economic Policy Institute, a liberal, labor-backed think tank in Washington, D.C., disagreed with Hasner's claim about job growth: "It’s not as fast as it could be, but he’s wrong, job growth after the early-2000s recession was slower, the slowest on record," she wrote in an e-mail. Shierholz sent us a chart she created based on data from the U.S. Bureau of Labor Statistics, which on the left side shows percentage job growth over 22 months (because we are now 22 months from the end of the 2007 recession) following a recession for the last four recessions: 1981, 1990, 2001 and 2007. The chart shows the most sluggish job creation was following the 2001 recession, when the number of employees on non-farm payroll dropped by 976,000. Economists referred to the period as a "job-loss recovery," she said. "You are not going to find anything that is slower than early 2000 recession," Shierholz said in an interview. But in the 22 months following the 2007 recession, the number of employees increased by 535,000. And Shierholz sent more in an e-mail: "The sluggish jobs recoveries following the last three recessions were due (to) slow output growth caused in large part by the fact that they were, to varying degrees, balance sheet recessions. (Balance sheet recessions are caused by real estate or financial asset bubbles bursting –- meaning that people and/or firms have assets that are worth less than their liabilities, so they will opt to pay down their debts rather than invest and consume, which slows growth.)" We asked Shierholz about the claim in the USA Today article on which Hasner based his tweet. The USA Today article cited job losses since the start of the recession -- that's not the same as the "post-recession rate" that Hasner referred to, after the recession was over. It's simply two different ways to look at job losses or growth. "The recovery has not been the slowest," Shierholz said of the most recent recession. But she agreed that "starting from the beginning of the recession, we are down more jobs ... than any other recession since the Great Depression; that is true." We sent Shierholz's chart to James Sherk of the conservative Heritage Foundation. He suggested measuring from the start of the recession rather than the end otherwise "you ignore the severity of a recession." He created his own chart starting from the beginning of the recession, which shows that the job picture is worse for the most recent recession than the previous three. We e-mailed Nelson spokesman Dan McLaughlin to ask for a response. He didn't address the accuracy of Hasner's claim comparing job creation after recessions, but argued that Nelson has tried to create jobs by, for example, advocating for high-speed rail in Florida. We sent Shierholz's chart to Wilson and he responded by e-mail: "I'm not going to cherry pick obscure economic data: we quoted a sourced USA Today piece for the matter at hand." Hasner said that job creation has been at the slowest post-recession rate since the Great Depression. Words matter to us, and we think most readers understand "post-recession" to mean after the recession is over. When counting after the recession, the 2001 recession had a slower job recovery. And Hasner isn't providing a complete picture when he labels this the "Obama-Nelson economic record" -- the recession started before Obama was elected president and an individual senator can't be blamed for sluggish job recovery any more than Hasner, a former state legislator, can be blamed for unemployment in Florida. Still, Hasner's off by only one recession out of 12. We rate this claim Mostly True.
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