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President Joe Biden has claimed repeatedly that he has led a great economic recovery as president. The White House claimed that the President’s economic plan has driven unemployment down to 4.2% three years earlier than the experts predicted. The President has also said that when he was sworn in, unemployment was at 14%. Biden’s chief of staff noted that more people are vaccinated today than a year ago and that this government has created a record amount of jobs for a first-year president.
However, there are a few issues with the economic “success” story the President is selling to the American people. Let’s begin with what the president got right: yes, the unemployment rate decreased to 4.2% in November 2021, and yes the American economy has created a significant number of jobs in 2021 as the economy recovers from the COVID halt of 2020.
Biden’s claims on the unemployment rate lack some context
The claims by the Biden administration that the unemployment rate has decreased three years faster than experts claim is not entirely accurate. The Congressional Budget Office (CBO) did forecast that unemployment would fall to 4.6% in 2023, but the Federal Reserve prognosticated that number would be reached in 2022, and Goldman Sachs forecasted that unemployment would go down to 4.1% at the end of the year. Hence, the claim that Biden has crushed unemployment three years earlier than forecasted is only true in one model, what is true, is that the unemployment rate is lower than the expectations of the Federal Reserve or the CBO.
However, there is a key factor that the President is not mentioning when giving his assessment of how well the economy is working: the labor force participation rate. Although this sounds like a very obscure economic term, it is a vital indicator to understand the state of the national economy. The labor force is the number of people who are actively looking for a job, when the unemployment rate is calculated. It is done based on the labor force, meaning that it does not count people who have decided not to look for a job.
This is where the labor force participation rate enters into the game, as it measures the people who are discounted in the unemployment rate. Here is where the panorama for the Biden administration gets murky, before the pandemic the participation rate was 63.3%, today is 61.8%, which is one of the lowest in the 21st century, meaning that there are a significant number of Americans who are neither working but are not counted towards the unemployment rate
Biden did not create the most jobs in the COVID-19 era
The president also said that the unemployment rate was at 14% when “we started this job”, however, this could only be true if he was referring to the beginning of the pandemic, which occurred while Trump was president. If Biden was talking about his presidency, then this would be a wildly inaccurate statement. If he was talking about the pandemic, then it would be very strange for the president to claim credit over the recovery, as the unemployment rate was already at 6.7%, meaning that the majority of the jobs recovered occurred while Trump was President.
This leads us to another claim that has been propagated by the White House, which is that the Democratic administration has overseen a record number of jobs created, especially for a new president. However, this claim lacks an incredible amount of context, while it is true that Biden has created more jobs than many other presidents, it is also true that neither of his predecessors assumed office when the country was already recovering from a historic pandemic-caused recession.
Additionally, if Biden is going to take credit for getting Americans back to work after COVID, then his efforts would have to be compared with those of the last ten months of the Trump presidency. According to BLS data, Biden has overseen the creation of approximately 5.8 million jobs, in comparison, the economy recovered 12.8 million jobs after the initial economic hit of the pandemic. Biden has indeed presided over a post-pandemic economic recovery, but that economy had already been recovering ground after the initial COVID shock.
Finally, White House Chief of Staff Ronald Klain pointed out that one of the successes of the Biden White House is that more people are fully vaccinated today in comparison to last year. That is completely true, but is missing a small key detail: the vaccines did not even exist for most of 2020 and the FDA only approved the COVID jabs in early December 2020. In fact, the vaccines, which have proven pivotal in the fight against the virus, were developed after the successful rollout of Operation Warp Speed by the previous administration.
Daniel is a Political Science and Economics student from the University of South Florida. He worked as a congressional intern to Rep. Gus Bilirakis (FL-12) from January to May 2020. He also is the head of international analysis at Politiks // Daniel es un estudiante de Cs Políticas y Economía en la Universidad del Sur de la Florida. Trabajo como pasante legislativo para el Representate Gus Bilirakis (FL-12) desde enero hasta mayo del 2020. Daniel también es el jefe de análisis internacional de Politiks.