Thursday, June 24, 2004

The Party Of Job Creation

In previous blogs, I've raised the issue of how robust economic growth is strongly associated with Democratic Party control of government, and outlined how a Democratic administration typically stimulates job growth in contrast to how Republicans have approached the issue. Well the proof is in the pudding as they say. If the Democrats are better at job creation, then we should see it in superior job growth through different administrations, business cycles and economic situations.

And see it we do. Since World War II, the Democrats have held the White House for 27 years and the Republicans for 31. According to Bureau of Labor Statistics data, during the Democrats' 27 years in power, over 59 million nonfarm jobs were created. During the Republican's 31 years, only 31.3 million jobs were created. You have to go back to 1950 to find any Democratic President presiding over an annual net job loss. By contrast, Republican administrations have presided over net annual job losses eleven times. On average, Democratic administrations oversaw a monthly gain of over 182,000 jobs, while the Republicans have averaged only 84,000 per month.

This of course has a profound effect on unemployment rates. Since World War II, again according the Bureau of Labor Statistics unemployment data, on average unemployment rates went down by 5% every year during Democratic administrations while unemployment rates rose a yearly average of 9% under Republicans.



This is not due to a single aberration. As this chart shows, the overall record of each Democratic administration is profoundly different than Republican performance.

As to why this is so, one could argue that Republicans being the party of the affluent and the major corporations are less interested in full employment than the Democrats since a high unemployment rate makes for a cheaper and more compliant labor force. You could also argue that the ideology of the Republican Party makes it impossible for them to embrace the kinds of Keynesian economic solutions that have been proven to work for a century or so. Regardless of the reasons for the difference in performance, no one can possibly doubt that there is a statistically significant difference in the parties' relative success in promoting job creation. An additional 28 million jobs created under Democrats is about as significant as it gets. If you want a full employment economy, you really have no choice this November.

Welcome to the Democratic Party.

4 comments:

MDDEM said...

I have been working on my thesis about the economy since Carter was in office and have found your numbers to be dead on. Why would anyone think that the Republicans have presided over growth when JOBS are the true reason for growth? As an example, your numbers showing jobs per month by party are so telling of what this argument is all about. The DEMS have an answer to growth and it is creating jobs. Republicans only think of themselves and cannot get past the greed factor and "me" economy of the 80's. Life goes on, and goes on better, under a DEM administration.

Richard said...

I hope you've been working on your thesis about the post-Carter economy, and NOT that you've been working on your thesis since Carter was in office. If the latter, I feel your pain ;>) .

Your questions go right to the heart of the matter. Going back through the 20th century, we find the Republicans are somewhat better at discouraging inflation and the Democrats are better at encouraging economic growth. This, in my opinion, is mathematical proof of the actual class warfare waged between the parties from the start. While I'm in danger of oversimplifying here, inflation is the enemy of the affluent class possessing deflating assets. Growth is the friend of all those still trying to gather the assets they need (IE most of us.) Given steady productivity rates, growth leads to inflation, so for much of the time, the Republicans have acted to dampen growth, not encourage it.

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Anonymous said...

the economic jobs data is similar to what i've found. take a look at the website www.truthfulpolitics.com. To be fair, there are some policies across both parties that could have a positive impact.