This is the third and final article in a series of three that examine the relative economic performance of Republican and Democratic administrations since the end of the Second Industrial Age. If you haven’t already done so, read the first and second articles, which compare federal debt and stock-market performance since the proximate end of the Second Industrial Age. Spoiler alert: the underdog Democrats defeated the overdog Republicans in both instances, and neither outcome was a close call.
In this piece, we attempt to determine which party has been the better “job creator” over the last four decades. As in the last two comparisons, there are a number of metrics that can be used to measure relative job creation, but the simplest, most widely understood, and least obscured by a growing economy is the unemployment rate.
The incoming and outgoing unemployment rates by administration were as follows:
President Party In Office Incoming Rate Exit Rate Change
Carter Dem. 1977-1981 8.5% 8.0% -0.5%
Reagan Rep. 1981-1989 8.0% 5.6% -2.4%
Bush I Rep. 1989-1993 5.6% 7.8% +2.2%
Clinton Dem. 1993-2001 7.8% 4.1% +2.9%
Bush II Rep. 2001-2009 4.1% 8.6% +4.5%
Obama Dem. 2009-2017 8.6% 4.9% -3.7%
On average, the unemployment rate increased from 5.9% to 7.3% during the last three Republican administrations. On average, the unemployment rate decreased from 8.3% to 5.7% during the last three Democratic administrations.
Another way to gauge the difference: the unemployment rate increased by an average of 24% during the average Republican administration; it decreased by an average of 32% during the average Democratic administration.
That’s a difference of tens of millions of jobs over the last forty years.
Full disclosure: From February 2017 to February 2018, US unemployment decreased from 4.9% to 4.4%. The trend line suggests, however, that the unemployment rate will be materially higher by February of 2021, or maybe The Donald is channeling Ronald Reagan. We’ll know in a few more years.
(1) The unemployment data are from Bureau of Labor Statistics.
(2) The comparison assumes that each incoming president was responsible for the economy from the first February after his inauguration until the first February after his successor’s inauguration, which is why incoming and exit figures are identical.