Summary: Which Presidents Are Better For Jobs? The Answer Depends on Race and Ethnicity

Johannes Moenius Analysis, Employment, Income & Wealth, Reports 2 Comments

A Summary of: Which Presidents Are Best for Jobs? A Brief Analysis by Race

It has become a sport among economic commentators to gauge presidential performance by the number of jobs each has created. This is questionable on several grounds, the most important one being that presidents may or may not have that much influence on the job market at all. The general economic situation at the start of a term, the Federal Reserve, Congress, world markets – and more – influence jobs and may have a larger effect on the “job market performance” of a president than the president itself. These factors make it difficult to compare job market outcomes under each president.

Nonetheless, it is worthwhile to compare job market outcomes by racial and ethnic groups under each president. Does employment within each group keep pace with overall employment growth? If a rising tide lifts all boats, does it lift all boats equally?

We find small differences in overall job creation between Republican and Democratic presidents. However, there are notable differences in job creation for whites versus non-whites: while job market outcomes for whites have been almost indistinguishable under Republican and Democratic presidencies, non-whites have experienced more favorable job market outcomes under Democratic presidents.

Employment data by race (Asians, Blacks, and Whites) and by ethnic group (Hispanics) are available from the Bureau of Labor Statistics from 1972 onward (we henceforth refer to all groups as racial groups.) Since then, we find that overall job growth has been slightly higher under Democratic presidents than under Republican presidents. Additionally, we find that all racial groups saw higher job growth under Democratic presidents, on average. The difference is especially large for Asians and Hispanics.

We also examine the long-term performance of presidents to study persistence of policies and purported trickle down effects. We compare growth rates during years 5-8 of two-term presidents. Overall employment growth is about the same under Democratic and Republican presidents, it is slightly higher for Whites under Republican presidents, but it is higher under Democratic presidents than under Republican presidents.The observed differences in growth rates across racial groups and presidential terms are substantial. On average, during their second term Democratic presidents created one more job than Republican presidents per 1000 employed. They created eight fewer jobs for White workers per 1000 White employees, but 14 additional jobs for Black workers per 1000 Black employees, 63 additional jobs per 1000 Hispanic employees, and 82 more jobs per 1000 Asian employees than their Republican counterparts.

In summary, comparing the ability of presidents to create jobs is a questionable endeavor. Too many factors outside of presidential policies influence job creation. Our goal here is more modest – to simply provide facts for discussion. These facts present themselves as follows: Democratic and Republican presidents have on average about an equally good record in creating jobs, with a slight advantage for Democratic presidents. Whether this can be attributed to presidential policies is questionable.[i] However, there are marked, yet to be explained, differences in job growth across racial groups: employment statistics reveal that Blacks, Hispanics, and especially Asians have more favorable job market outcomes under Democratic presidents. This effect is especially pronounced when comparing two-term presidencies. Presidential policies may take time to come to fruition, so comparing second terms may be especially instructive.

In upcoming reports, we investigate these stylized facts in more depth. Our next post explores the geographic distribution of job growth within the U.S. We will shed some light on the extent to which national differences in racial employment are observed on the local level.

[i] E.g. Blinder and Watson (2014) find no effect of fiscal or monetary policies that can explain these differences, Campbell (2011) points towards the importance of economic conditions inherited from predecessors in explaining those differences.

Authors: Johannes Moenius, Ph.D. and Jess Chen, Ph.D.
Institute for Spatial Economic Analysis,
University of Redlands, School of Business

Contact: Johannes Moenius, Ph.D., isea@redlands.edu, 909-557-8161
Director, Institute for Spatial Economic Analysis,
University of Redlands, School of Business

Comments 2

  1. A helpful insight would be to separate private sector vs governmental organization job growth. A classic Democratic maneuver is to grow government jobs (with their set asides, protected groups and racial quotas) to ” stimulate the economy” and regulate private businesses. Would be interesting

    1. Post
      Author

      Great point, we will actually look at the sectoral data in a post soon. I will make sure the government sector will be covered in there. Thanks!

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