Labor Statistics and Jobs Effect Elections

by Jimmy on January 26, 2009 · 1 comment in Jobs

With much news recently about raising unemployment rates (California’s Unemployment Rate Hits Highest Point Since 1994, Microsoft announces first massive layoff in company history), I wondered if I could determine a relationship between employment rates and the outcome of presidential elections. As you will see below, the correlation turns out to be quite strong (data below comes from the US Bureau of Labor Statistics).


1980 Election
The incumbent party, the Democrats, lost to Republican Ronald Reagan. In the six months leading up to the election there was a net loss of half a million jobs, which did not bode well for Jimmy Carter.

1984 Election
The first two years of Reagan’s presidency was pretty rocky, but he finished strong with a net gain of 3.8 million jobs during his fourth year. This made him a pretty formidable opponent for Democrat Walter Mondale. The incumbent Republican party won in a land slide.

1988 Election
Reagan ended his presidency with a net increase during his two terms of almost 16 million jobs. The incumbent party, Republicans, and their nominee, George H. W. Bush, had little trouble beating the Democrats nominee, Michael Dukakis.

1992 Election
The six months leading up to the election saw a net gain of only 600,000 jobs, which was relatively weak growth. Combine that with a net loss of half a million jobs from 1990 to 1991, and it was enough for the incumbent Republican party to lose to Democrat Bill Clinton.

1996 Election
With stellar job growth only rivaled by Reagan’s second term, Bill Clinton’s first term saw 11 million new jobs produced and he had no trouble staying in power and defeating the Republican challenger, Bob Dole.

2000 Election
Though another 11 million new jobs were created during Clinton’s second term, the lackluster 456,000 new jobs in the six months prior to the election to not bode well for the incumbent party and Republican George W. Bush defeated Democrat Al Gore.

2004 Election
George W. Bush’s first term started out rough and got even worse after the terrorist attacks of September 11. Overall, his first term had flat job growth, but the six months prior to the election saw a healthy 1.1 million new jobs created. This was enough to keep the incumbent Republican party in power and defeat Democrat John Kerry.

2008 Election
With monthly job loss numbers that had not been seen since 1980 when Jimmy Carter was in the White House, things did not look good for the incumbent Republican party in 2008. And indeed, with a loss of 1.1 million jobs in the six months prior to the election, the Democrats and Barack Obama had no trouble defeating John McCain.

Conclusion
It’s pretty clear from the data that as jobs go, so goes the White House.

{ 1 comment… read it below or add one }

mjb January 26, 2009 at 3:45 pm

It’s also pretty well-known that almost all incumbent presidents take actions that affect the economy in the short-run to enable them (or their party) to do better in an election.

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