The economic downturn hit the nation’s job market with full force just as Barack Obama took office in January 2009, prompting the new president to mount an extraordinary response.
Obama worked with Congress to pour more than $1.1 trillion into shoring up the banking sector, rescuing Chrysler and General Motors and financing a massive stimulus bill.
The aggressive series of actions helped construct a floor under the most severe economic collapse since the Great Depression, many economists agree. Yet, the president’s policies have failed to ignite anything close to the robust jobs growth needed to overcome the horrific losses caused by the downturn.
Since the economy emerged from the deep recession in June 2009, employers have added an average of 87,000 jobs a month, according to the latest government figures. That is not quite enough to keep pace with the normal growth in the labor force, let alone significantly lower the unemployment rate.
Overall, the economy has just over a million more jobs than it did in February 2009, Obama’s first full month in office, according to the Bureau of Labor Statistics.
The tepid pace of job creation looms as perhaps the president’s biggest political vulnerability as his re- election campaign enters its final weeks. The unemployment rate had been stuck above 8 percent for 43 consecutive months before falling to 7.8 percent in September. Still, nearly 5 million Americans have been out of work for six months or more.
With the economy struggling through one of the weakest recoveries on record and employers adding jobs at a slower rate than a year ago, projections are that the country’s jobless rate will not return to normal levels for years to come.
Analysts call continuing high levels of joblessness a prime factor in the income and wealth declines that have continued for most Americans even after the recession ended. Obama, who came into office promising to bolster the middle class and reduce inequality, has presided over a turbulent economy that so far has done neither.
“This was not a normal recession. It was a credit crisis that left many people deep in debt, and the economy was dropping like a rock when the president took office,” said Steven Kyle, a Cornell University economics professor. “His policies have addressed the dropping-like-a rock part. But the recovery has been much slower than anyone would like. It has been as feeble as the most feeble recoveries we have seen.”
On the stump, the president acknowledges that the job market is far from strong. But he also notes that his early policies helped repair an economy that shed 818,000 jobs in the month he took office.
Obama also has pursued policies aimed at making structural changes aimed at helping working people, such as health-care reform and increases in federal student aid, his aides said. They also point out that Obama has fostered growth in manufacturing work for the first time since the late 1990s.
Still, the slow pace of job creation has prompted criticism from across the political spectrum. Many liberals are among those who say that even at $787 billion the original stimulus was too small. Also, they say, its avoidance of direct government job creation and its heavy reliance on tax breaks — for first-time homebuyers, small businesses, college students and 95 percent of wage earners — blunted its impact.
“The initial stimulus deserves very high marks, but it could have been more effective with fewer tax cuts,” said Larry Mishel, president of the Economic Policy Institute, a liberal-leaning research organization. “In some ways, it has to do with Obama’s political tactic of incorporating things he thinks the opposition wants thinking they would say yes. But, as we saw, they didn’t.”
Conservatives and their Republican allies, meanwhile, argue that the economy’s problem is not a lack of stimulus. Instead, they blame the sluggish economy on what they call Obama’s embrace of an activist government that rings up too much debt and puts too many constraints on private businesses.
The GOP built a solid wall of opposition to the original stimulus bill, which squeezed through Congress with zero Republican votes in the House and just three GOP votes in the Senate. Since House Republicans won control of the House in 2010, they have blocked most of Obama’s other job-creation plans.
They also have pushed back hard against Obama’s vision for a deficit-reduction deal.
By the time Obama proposed his $447 billion American Jobs Act last year, it was widely agreed that it had virtually no chance to be enacted. “At that point, the politics were such that nothing was moveable,” Mishel said.
The measure includes incentives for small businesses to hire new workers, $50 billion for roads, bridges and mass transit, $25 billion to upgrade schools and billions more to support state and local government jobs. Independent analysts have said the proposal would create hundreds of thousands of jobs.