The recent news headlines celebrated the Dow Jones Industrial Average closing at a record high following a positive jobs report, leading many to view the economic indicators through an optimistic lens. However, this perspective often overlooks significant historical context and the complexities of current market dynamics. Incumbent presidents, including Joe Biden, have historically taken credit for job creation during their tenures, and many in the public have come to accept this narrative without scrutinizing the underlying data. For Vice President Kamala Harris, the favorable job figures potentially enhance her political prospects as they are seen as indicative of successful economic policies under the current administration.
Critically, one must consider recent adjustments in job figures. Just two months prior, the Bureau of Labor Statistics (BLS) revised downward the job numbers for April 2023 to March 2024 by over 800,000 positions, a significant correction amounting to roughly a 27% reduction. The nature of job creation in recent years, particularly since the onset of the COVID-19 pandemic, also warrants a closer examination. The billions of jobs reported as “created” should largely be viewed as a recovery from the unprecedented loss of approximately 22 million jobs during the early months of the pandemic in 2020. The ensuing months of job reports, which indicated millions of jobs being added, were essentially reflective of individuals returning to work after being compelled to remain at home during government-imposed lockdowns.
The narrative surrounding job recovery shifted notably upon Biden taking office, as the media increasingly interpreted job growth positively, framing it as evidence of effective economic policies under “Bidenomics.” However, it is essential to recognize that it took until September 2022 for the economy to recover the lost jobs fully—a time span where net job creation was essentially stagnant for 31 months. This lack of job growth coincided with the arrival of millions of undocumented individuals, which compounded the stresses on the labor market and further obscured the reality of the economic situation.
To gain a clearer understanding of the true job market situation, one must also account for the opportunity costs associated with the lockdowns. The average job creation rate from 2016 to 2019 was around 184,000 jobs per month. Had the pre-pandemic economic momentum continued, an estimated additional 5.7 million jobs could have been created during those 31 months of net zero job growth. After accounting for the downward revision and net job creation since March 2020, the economy has only generated approximately 4.8 million jobs over four and a half years, averaging a mere 94,000 jobs per month. These numbers starkly contrast with the pre-pandemic trends, painting a troubling picture of an economy that is far from robust.
The limited job recovery further contributes to the growing disillusionment among the public regarding the effectiveness of the current administration’s economic policies. Despite reports of job growth, many individuals do not perceive a corresponding increase in economic wellbeing—a sentiment reinforced by the reality that the economy has not fully rebounded from the adverse impacts of the COVID-19 lockdowns. Additionally, if we were to extrapolate from historical job creation rates, the economy could have potentially achieved a net gain of 9.7 million jobs, illustrating a stark divergence of nearly 5 million lost opportunities attributed to government interventions during the pandemic.
In evaluating the long-term effects of the economic disruptions instigated by COVID-19 lockdowns, one may argue that the losses incurred will have compounded repercussions stretching far into the future. Historians often overlook these critical considerations, typically framing historical narratives in a manner that highlights success stories, such as the New Deal, while disregarding the adverse consequences of such policies. The economic legacy of the 2020s may similarly mischaracterize the impact of pandemic-related decisions, with those responsible painted as saviors rather than as architects of significant economic distress. Without a deeper public understanding of the unseen costs associated with these policies, persistent misconceptions are likely to prevail, leaving the true state of the economy obscured for years to come.