The Democrats and Republicans have spent much of the past two weeks debating economic strategies—and assigning blame for the current recession—at their respective conventions. In a new analysis, Andrew Wilkinson, Chief Economic Strategist at Miller Tabak & Co., looks at the recent track record for both parties by examining jobs data from George Bush’s presidency and the current Obama administration. And while much of the data is disheartening –as Wilkinson notes, “it remains difficult to tell who is worse at delivering jobs”—the report highlights recovery in several sectors.
Small businesses remain an important driver of job creation; according to the August ADP employment report, small businesses have total payrolls adding up to 49.9 million, more than either large- or medium-sized companies. “Small business is not called the economy’s engine of growth for nothing and the recovering economy has clearly provided fertile conditions to aid the employment recovery by this measure,” Wilkinson says.
In terms of individual employment sectors, education and health and professional and business services have grown significantly under the Obama administration (see table below). Retail hiring has also increased in the past months, although not nearly as dramatically. “The pattern of retail hiring seems to add little weight to the political argument that lower taxes might spur consumption and help create new businesses with the retail sector,” he says. “The Bush record on employment through both terms is poor with net job losses, while under Obama, even though the recovery is helping, there remains a net job loss in the sector.”
Manufacturing, which shed 4.5 million jobs under Bush’s presidency, and 1.045 million during Barack Obama’s first term, has also begun to turn around, gaining 532,000 since 2010 (see table below). Construction jobs, on the other hand, are rebounding more slowly.
Ironically, the government jobs sector saw the second-highest level of growth under President Bush, but has shed jobs under the Obama administration.
The political implications of the economic data are still unclear, according to Wilkinson. “The visual makes it very difficult to determine whether the economy is better off as it is or would see improved performance in the context of a regime change,” he notes. “In turn, that is not helped by the lack of clarity surrounding specific political proposals to help the micro-economy. Ahead of the August employment report, it remains a tougher call as to whether the still-difficult labor market is improving fast enough to help Obama move into a decisive lead in the opinion polls.”