On the economy, critics of President Joe Biden contend he has a substance problem. The White House and its allies claim that Biden has a messaging problem. Both are true.
Last Friday, the government published jobs data for May. The left-leaning media touted the report as good news, showing that the economy added 270,000 jobs. In fact, the data was terrible for ordinary Americans. It shows that fewer Americans were working in May than in April, and that those who were employed needed to work more jobs to make ends meet. These are substantive economic problems for Biden.
The celebratory reaction of the White House and the pro-Biden media illustrates the disconnect between the pundits, bureaucrats, and academics on the one hand, and working Americans on the other. Americans don’t particularly like when their leaders celebrate the economic misfortunes of Americans. That is Biden’s messaging problem.
Number of Jobs vs. Number of People Working
There are two different ways to view employment data. The first is to examine how many jobs people are working. The second is to look at how many people have jobs.
Take, for example, an economy that has three people and three jobs. Such an economy could have three people each with one job and no unemployed. Alternatively, such an economy could have one person working three jobs and two people unemployed. The May jobs report shows a trend moving toward the latter scenario instead of the former.
The government tracks and publishes both sets of job data — that’s how we know the May jobs data was really bad. From the pro-Biden media, you hear only about the first set of data, which shows the increase in “all employees” of about 270,000 from April to May.
The problem is, that figure double-counts (or triple- or quadruple-counts) people who have to work more than one job to make ends meet. This is because a single person counts as a different “employee” for each separate employer. In other words, the data set that the White House and left-leaning media point to tells us little about how many Americans are actually working.
That information is contained in a separate report, called “Employment Level,” which is largely ignored by pro-Biden media. As this report explains, “[e]ach employed person is counted only once, even if he or she holds more than one job.” This data set tells us how many Americans actually have jobs at a given point in time. From April to May, this number decreased by more than 400,000 people. In other words, in May 2024, 400,000 fewer Americans had jobs than in April 2024.
This also means that the so-called net jobs “added” by Biden in May are just other Americans having to work extra jobs. The May data thus show an increase (from April) of 15,000 people working at least two jobs. Indeed, since this time last year, 629,000 more Americans have had to take on at least a second job.
Even these numbers don’t fully add up. To completely reconcile Biden’s so-called May job “gains” with the even larger decrease in the number of Americans actually employed during the exact same period, one must conclude that many people are taking on three or more jobs to make ends meet.
The government does not report that number separately (that is, the government doesn’t distinguish between “multiple job holders” who work two jobs versus those who work three or more). Therefore, a person who held two jobs in April, but three jobs in May, is recorded merely as a “multiple job holder” in both months.
Nevertheless, collectively, the data suggest many people are taking on three or more jobs. There were 400,000 fewer people working in May. Yet, there were 270,000 more jobs being worked. People moving from one job to two in May based on the government numbers account for only part (about 15,000) of this difference.
All of the government’s figures are subject to sampling error, making it impossible to determine the precise number of people working more than two jobs. But the data trends nonetheless strongly suggest that a large number of Americans are being forced to work three or more jobs.
In short, Biden and his media allies are celebrating that fewer Americans are working, and that those who are working have to work even harder. This is where the disconnect between Biden and ordinary Americans becomes apparent. Americans do not agree that fewer Americans working, and Americans having to work harder to survive, are reasons to celebrate.
Other Terrible News in the May Data
There is plenty of other bad news throughout the May employment data. While overall employment decreased by 400,000 Americans in May, full-time employment performed substantially worse.
From April to May, the number of Americans with full-time jobs decreased by 625,000. Over the last 11 months, the number of Americans with full-time jobs has dropped by more than 1.5 million. Effectively, the economy has been replacing full-time jobs with part-time ones. These are truly awful things for Biden and his allies to celebrate.
Job openings in the United States dropped by about 290,000 in the most recent monthly reporting cycle. Thus, the 270,000 jobs “gained” in May do not appear to be new jobs that were “created.” Rather, the May increase in payroll numbers seems to indicate that people are merely taking already-existing job postings (again, most likely as an extra job).
The unemployment rate also ratcheted upward in May to 4.0 percent, marking an increase of .5 percent in just the last 10 months. That’s a bad sign. But it’s a terrible sign when you consider that the labor force participation rate dropped at the same time.
Typically, the unemployment rate and labor force participation rate have a qualitative inverse relationship. When the labor force participation rate gets worse, the unemployment rate should tend to improve, all other things being equal. That’s because it’s easier for an economy to supply sufficient jobs to keep the unemployment rate low when fewer people are looking for jobs.
May experienced the worst possible combination of these circumstances. The labor force participation rate got worse, but the unemployment rate also got worse. This combination signals recession (as does the recent downward revision of already low first-quarter GDP).
Even in isolation, the May drop in labor force participation is highly alarming. Poor labor participation has been a hallmark of Bidenomics, along with high inflation, high interest rates, decreased real income, depleted personal saving, and increased consumer debt. Despite three-plus years of Biden’s so-called “recovery,” the United States has not come close to returning to its pre-pandemic level of labor participation.
Moreover, the Trump administration accomplished most of the recovery, adding 1.4 percent back to labor participation in just six months following the Covid pandemic low. Biden has added only 1.0 percent back to labor participation in 41 months. In fact, it’s this low labor participation rate throughout Biden’s term that has kept the unemployment rate artificially low.
Sustained poor labor participation is a ticking economic time bomb. Labor participation establishes the tax base from which federal and state governments secure their operating funds. Labor participation defines the base from which payroll taxes — which support the soon-to-be-insolvent Social Security and Medicare programs — are drawn. Those programs need an ever-increasing working population to survive.
Bad economic news is bad. Celebrating bad economic news is worse. If Biden does not correct both of these problems soon — a seemingly impossible task at this point — voters in November will solve the problems for him.
