Back in the early mid-1980s as unemployment started to plummet, after having spiked up to over 10%, critics of then-President Ronald Reagan’s economic policies said most of the new jobs created were at fast food joints like McDonalds. Indeed, given that some of his critics were leading figures in the media, the term McJobs quickly gained currency:
Since the 1980s, McJobs had become synonymous with low-paying jobs with no growth opportunities. Analysts felt that such jobs imparted a few skills to workers that would be more or less of no use to them in the future
Well, with unemployment still high today, the unemployment rate now one full point higher than the highest rate promised if the president’s “stimulus” plan passed (and at the highest rate forecast should that plan have been defeated in Congress), Jim Hoft reminds us that “McDonald’s created one quarter of the jobs last month.” For some reason, I don’t think the critics of Reagan’s plan (or their ideological heirs) will be offering the same criticisms of Obama’s plan.
Please note that I’ve circled the part on the chart (based on estimates from the president’s economic team) of the unemployment forecast in the absence of the plan. They said it would peak at 9%–which is the latest figure offered by the Labor Department.
To be sure, even as the unemployment rate has increased, private employers like McDonald’s did great hundreds of thousands of new jobs. Ed Morrissey helps us unpack this apparent ambiguity:
The rise in unemployment and in job creation could be good news, in that previously discouraged workers might be coming back to the work force. However, that doesn’t appear to be the case. The percentage of re-entrants among the unemployed actually held steady in for the past six months at 2.2%, and is actually lower than last April’s 2.4%. New entrants among the unemployed have held steady at 0.9%. The only real improvement in the profile has come from job losers and those completing temporary jobs, now 5.3% from last April’s 6.0% and January’s 5.6%. The number of people marginally attached to the workforce slightly rose from last year’s April figure by 34,000.
Marginally attached to the workforce?!? Hmmm. . . . Sounds a lot like a lot of people have what pundits once derided as “McJobs.”
Wonder if that meme will catch on as it did in the 1980s. Well, maybe not in the mainstream media.
FROM THE COMMENTS: ILoveCapitalism captures something I missed, “note also that the part you circled (peak unemployment) is IN 2010. A year ago.” So, Obama’s own economists said unemployment would have been lower today had we not implemented his plan!
Dan, note also that the part you circled (peak unemployment) is IN 2010. A year ago.
“Recovery plan”, indeed.
Big Government doesn’t work. But lefties (in media, politics, academia) love it and want it, so they tirelessly rewrite and revise economic theory and history to make it somehow sound like it does.
Good catch, ILC!!
Will Obama use “Recovery Summer” like they did last year? Obama is making things worse–not better. He’s not fooling anyone.
Hi Dan
“Marginally attached to the workforce?!? Hmmm. . . . Sounds a lot like a lot of people have what pundits once derided as “McJobs.””
FYI:
“What does “marginally attached” mean exactly?
A “marginally attached” worker is someone who:
-is currently not in the labor force
-wants full-time work
-has actively looked for a job sometime in the past 12 months
A “marginally attached” worker is not considered to be either employed or unemployed, so they are not included in the “official” unemployment number that is released by the US government every month.
Why? Because they have not actively looked for work in the past 4 weeks, so this disqualifies them from being considered as “unemployed”.
A “marginally attached” worker may be currently attending school in an effort to strengthen their resume. They may have stopped actively looking for work so that they can attend to some family issues.
As mentioned, a “marginally attached” worker is someone who wants a job, has looked for a job sometime in the past 12 months, but is currently not “actively” looking for work.
The “marginally attached” worker, as mentioned, is not included in the “official” unemployment rate that is released by the government every month. However, the “marginally attached” worker is included in the U-6 unemployment rate, which is considered to be a broader measure of labor under-utilization in the United States”
http://www.davemanuel.com/investor-dictionary/marginally-attached-worker/
Unemployment *may* finally come down over the next year as Obama-Bernanke further undermine the dollar, and thus our physical standard of living. In the Weimar hyperinflation, unemployment got down to 1% at one point (1922) as the real value of wages declined and people were threatened by hunger.
On the other hand, the Zimbabwe hyperinflation didn’t work out that way; unemployment reached 94% in 2009 as production and trade came to a standstill. So there are no hard rules about it. It’s hard to predict the details of how destroying country X’s currency will play out.
Leave it to liberals to trash jobs and working people. Saw a thing on CNBC, not long ago, on McDonald’s. If you work hard and apply yourself, you can move up, become a manager or owner and make some decent bread. But then limousine liberals always shat on the proletariat.
ILC, I wouldn’t so sure. How many tricks can Bernanke try? I mean, hasn’t he already sailed the QE1 and QE2. . . .
& with inflation creeping up. . . do they wanna risk sending prices soaring even more?
Don’t forget, McD’s also got a waiver from ObamaCare; without which they probably could not have hired so many people.
Meanwhile, Chile, with its privatized social security system and restrained Government spending, is booming at 15% annual growth. Suck it, Keynesians.
Dan: I was painting a worst-case picture, true. Nonetheless, U.S. deficits are structural and not easily solved. As soon as interest rates rise and/or the economy falters, the deficit will automatically get even bigger. Bernanke has acknowledged at times that the purpose of QE is to create inflation (keeping the Fed’s measured “core rate” up in the 2% area; which understates actual inflation for various reasons, but we can discuss that another time), and to boost the stock market (which Bernanke thinks will stimulate the economy by making people feel wealthier). Other, less-acknowledged purposes of QE include:
– preventing failed Treasury auctions, or to say it another way, lowering mid- to longer-term interest rates. The Fed is now by far the number-one buyer of Treasury debt.
– transferring purchasing power (from people’s savings) to the government
– lightening the real burden of debt, by making everyone flush with cash
– giving banks an easy way to make money and rebuild capital as they borrow short-term at 0% and lend longer-term at 3% or more
– and generally slowing the number of bank failures that would otherwise occur, to the point where the FDIC and other government agencies can handle them in an orderfly fashion.
All of that is the finances of a banana republic. And makes QE3, 4, etc., likely, in my book.
Right now, Bernanke is pretending that QE2 ends in June and he’ll stop there. I don’t think he can stop. I don’t think Obama will let him. The current ‘false economy’ based on over-spending of all kinds (including over-government-spending) will go into a recession and perhaps a replay of 2008, if Bernanke stops QE. If indeed the Fed is not already planning for QE3 and beyond, then I think a ‘crunch moment’ is coming in just a few months where they realize that they must keep applying new QE (i.e., keep inflating) just to preserve what tepid growth we do have. And Obama, viewing unemployment as the greater threat (and viewing cuts in government as the greatest threat of all, naturally) will pressure them to make that choice. Don’t view them as independent; Obama has now appointed a majority of Fed governors.
From such cauldrons, hyperinflations develop over a period of years. Weimar went through similar pressures around debt and deficit financing, and made similar choices. One day, relatively late in that game, the Germans woke up and all realized that their currency was, in effect, a big lie because their government *had to* continue printing giant scads of it. How far away are we from that moment? I’m there already.
This guy doesn’t get everything right, but it’s still a pretty good read: http://blogs.forbes.com/peterferrara/2011/05/05/reaganomics-vs-obamanomics-facts-and-figures/
Jay Cost says if we’re still in a Food Stamp Recovery by 2012, Obama is toast no matter what:
http://www.weeklystandard.com/blogs/morning-jay-economy-still-not-good-enough-reelect-obama_559238.html
Well, ILC, I was presuming that Bernanke would learn from his failures and not initiate a QE3.
But, then he might receive pressure from a Mr. Obama who, at least in matters economic, doesn’t seem to learn from experience.
That is Bernanke’s game plan, for now. But we’ll see. I predict a tumble (20% or so) which has already started in the stock market and in commodities on the approaching end of QE2… developing into a new “deflation” scare in the media, then great pressure on Bernanke for QE3.
(continued) Also, Bernanke denies that QE1 and 2 have caused the current inflation, both in the U.S. and abroad. He truly thinks that inflation is a transient spike, not caused by QE.
Bernanke & Geithner both need to be fired ASAP.
The same thing happened when the Bush43 tax cuts started to take effect. Many of the liberal pundits were screaming that after one year, Clinton could no longer be blamed. They went through another round of saying the recovery was nothing more than McJobs.
But Obama and his group are still blaming Bush for the bad economy and we’re in Obama’s third year! With unemployment at 19%, if these McJobs dropped the rate to 15%, you can bet Obama’s propaganda wing would be whooping it up over that 4%.