Democrats Create More Jobs?

It is almost axiomatic among economists that the president can not really affect the short-term direction of the economy and that therefore the outcome of the presidential election will not significantly affect the rate of job growth.

The argument is essentially that the important policy tools that affect economic growth, monetary and fiscal policy, are in the hands of the Federal Reserve Board and the Congress respectively.  The former is intended to be relatively independent and the latter is often fully or partially in the control of the other party.

The problem with that (and a few other economic theories) is that itGÇÖs just not true.  There is almost a day-and-night contrast between the two parties.  Lots more jobs are created during the terms of Democratic presidents.
Look at the table.  It shows the rate of job creation for all presidential terms for which we have monthly data from inauguration January to the following inauguration January.  This is a total of 16 presidential terms going back to the start of FDRGÇÖs third term in 1941.  The rankings and job creation rates are calculated from data are taken from the U.S. Bureau of Labor Statistics website. Changes in total payroll employment are shown on the left, changes in private employment on the right.  Democrats are shown in italic and Republicans in bold and the presidential terms are ranked according to the increase in job creation during each four-year term.  The party split is half-and-half: eight Democratic terms and eight Republican terms.

Notice that almost all the Democrats are in the top half of the rankings.  Republicans are mostly at the bottom.  Only President ReaganGÇÖs second term is in the top half for private sector employment.  The current president is in last place.  In fact, Republicans occupy the last seven consecutive places.  On average, the chart shows that almost two and a half times as many jobs are created under Democratic administrations during this comparable 48-month period.  And what may be almost as surprising is that if we look only at private sector jobs the Democrats advantage is even larger.  So this disparity cannot be blamed on Democrats just loading up the public payrolls.

Did those last seven Republicans suffer from bad luck?  A bad draw?  Mathematically, that is extremely unlikely.  It would be the same as if we began with a deck of sixteen cards numbered 1 through 16, shuffled them honestly and dealt half each to a Republican and half to a Democrat.  What are the odds that the RepublicanGÇÖs eight cards include the seven highest numbered cards, 10 through 16?  ItGÇÖs a relatively simple problem in mathematical probability called GÇ£sampling without replacementGÇ¥.  The chances of that being a pure coincidence are seven in 10,000.

So how do we explain this?  That is certainly a challenge.  But the lack of an explanation doesnGÇÖt make it less true.  Gravity was a fact and things fell down long before Newton even attempted to explain gravity.  What may be even more inexplicable is why Democrats do not attempt to run on the PartyGÇÖs employment record.  GÇ£Democrats Create More JobsGÇ¥ does, after all, fit on a bumper sticker, no matter how complex the explanation.

Lowell Feld is Netroots Coordinator for the Jim Webb for US Senate Campaign.  The ideas expressed here belong to Lowell Feld alone, and do not represent those of Jim Webb, his advisors, staff, or supporters.

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