Greg Mankiw on the Employment-Population Ratio
I see that his blog Mankiw shows a chart of the employment population ratio to make a comment about the “so called recovery”.
But he selected the start date of the chart so that you could not see that during the eight years of the Bush administration the employment-population fell from 63.0 to 60.3, a 2.7 drop.
Since Obama took office the employment-population fell from 60.3 to 58.6, a 1.7 drop.
The ratio has done poorly under both administrations, but people who live in glass houses should be careful about throwing rocks.
If you measure from the end of the recession you get similar results.
nice catch…
i had seen mankiw’s post, & i had posted EMRATiO myself from 2000 to show the entire magnitude of the fall, but it never dawned on me that mankiw was gaming it that way…
rjs:
Small point, you need to use either before the recession (2001) or after the recession. Between the start and the end was abnormal growth in employment.
run, i was just shooting for peak to trough: http://research.stlouisfed.org/fred2/graph/?id=EMRATIO
That is exactly what the last chart does– it is from the end of the recession.
Mankiw’s graph shows a greater drop under Bush than ’01-’08 would. How is that gaming the numbers? He has stated repeatedly that Presidents have very limited control over the economy, so it’s tough to assume that he is bashing Obama for the economy. If one wanted to show that employment is far from rebounding to its pre-recession levels, then his graph is well drawn. Given that that was almost certainly his intention, this post seems a bit misguided.
To be clear, I’m not saying that his post wasnt motivated by politics. But there is a difference between blaming Obama for a bad economy (something neither his graph nor his title does) and making the case that claims of “recovery” are overblown, which his graph does quite accurately.
hey dan, fully agree with the last para. of your last comment.
otherwise most of the ‘recovery’ rhetoric seems to have derived from the January employment report [+275,000] – which is really not outstanding.
Those numbers are wrong in two respects: (1) they are simply wrong based on when the respective Presidents “took office”; in January 2001, the E/P rate was 64.4, and in January 2009 it was 60.6; that’s a loss of 3.8 percentage points, not 2.7, with the continuing loss under Obama at 2.1 percentage points; (2) it’s really ridiculous to assign responsibilty for a trend that started under a previous President until at least the end of the second quarter of the inaugural year; the drop from July 2001 until July 2009 was from 63.7 to 59.3, or 4.4 points under Bush (representing 10 to 11 million jobs lost) compared to 0.8 points since under Obama; (3) of course, that employment deflation was a powerful trend, and it’s also probably ridiculous to think a new President could get policies working to reverse it even by the start of the third quarter of his first year; since November 2001, Bush presided over the start and momentum-gathering period until November 2009 of a drop from 62.9 to 58.2, a drop of 4.7 percentage points for which Bush was responsible, compared to a gain under Obama — not satisfactory for sure, but not nearly as bad ads under Bush, of 0.3 points.
One would expect someone given a platform like Mankiw has been given at least to (1) get his easily-accessible numbers straight, and (2) consider something other than the day someone took office, the most simplistic possible selection presumably picked for no other reason than to make a political point — and an invalid one at that — as a more appropriate period.
Who has recently claimed we are in anything other than a very slow recovery? Seems to me the administration’s claims, even acknowldging they have been attempting, as any administration would, to put the best possible gloss on it, have been pretty accurate. The fact is, the jobs bleeding that began in April 2007 (21 months before Obama even took office) and only ended in December 2009 (correction to my other comment that said November) was truly awful, and at least that bleeding has been stopped.
You have to be careful with employment/population ratio. Demographics have a big effect. the leading wave of the post-war baby boom is now turning 65. There will be a big exodus from the work force over the next decade that will depress emp/pop.
Most of us plan on living for a while, too.
Cheers!
JzB
and normally this would be expected to drive up wages. if the black death is any guide.
[jazz: don’t know if you went back and looked at the comments to your post on slavery. i picked out about five comments that gave the impression i said you gave, which you said you didn’t. no bigee, but a person ought to be aware of how he is being read.]
Urban:
I guess I would ask why you believe Pres. Bush is the cause of all of this?
Jazz:
You can retire at 66 with your 200.5k? I intend to work until I am 70. Who has the money to retire unless you have a defined penion?
Mankiw is unbelievable. That they let him teach at Harvard is a tragedy.
RN
don’t suppose that Harvard is the home of “veritas.” when i started out it was the home of BF Skinner.
and considering that Romney graduated from there, and most (?) of the President’s advisors, I think you might begin to suspect that they have another agenda.
run
once you realize that money is not the most important thing in life, you’d be surprised at how early you can retire.
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