The federal Bureau of Labor Statistics announced Friday that the unemployment rate remained unchanged at a seven-year low of 5.3 percent in July — down dramatically from October 2009, when joblessness resulting from the Great Recession peaked at 10 percent.
Yet strikingly enough, it is against the backdrop of a seemingly low unemployment rate that an economic populist like Sen. Bernie Sanders of Vermont has managed to gain a following by decrying the United States as a nation of haves and have-nots.
“This is a rigged economy and, brothers and sisters, together we are going to change that,” Sanders told a crowd of more than 10,000 people during a stop in Madison, Wisconsin last month after announcing his candidacy for president.
For generations, politicians in both parties have viewed the unemployment rate as a kind of crystal ball during election season – worried for their reelection bids when joblessness is high and more confident when it is not. But as the sudden rise of Bernie Sanders shows, the unemployment rate may not be the best predictor of the electorate’s mood.
This is not to say that there are no correlations to be made between joblessness and election results. In 2011, for example, an analysis by The New York Times noted that no president since Franklin Delano Roosevelt had won a second term when the unemployment rate on Election Day was above 7.2 percent.
But that streak ended — the following year, when President Obama won a second term in office despite the fact that unemployment was well above the threshold that the Times identified: 7.8 percent going into election. Of course, with presidential elections only coming every four years, any analysis is based on a very small sample size and very complicated data.
The truth is that while unemployment is an undeniably important factor in the outcome of elections, it cannot be considered in isolation – apart from other factors.
Some of these factors, like wage stagnation, are tangible but often obscured by the headline-grabbing joblessness rate. Indeed, the economic populists of today – whether it’s Mr. Sanders or Senator Elizabeth Warren of Massachusetts — are looking past the much-touted joblessness rate to make their case to Americans.
Other factors are far less tangible but no less powerful, like the spirit a president engenders with the nation in good or bad times.
Consider that Ronald Reagan won reelection in November 1984, when the unemployment rate was relatively high at 7.7 percent. Mr. Reagan prevailed for a number of reasons, chief among them his ability to connect with Americans and inspire hope after the national malaise of the Carter years. Mr. Reagan was also no doubt helped by the fact that the unemployment rate was dropping that year from a high of 8.0 percent in January, allowing him to credibly argue that the economy was improving under his stewardship.
There were other elections where attitudes appeared to defy the economic realities of the day. In 2000, for example, Al Gore, who was Bill Clinton’s vice president at the time, lost to George W. Bush, then the governor of Texas, even though Mr. Gore could credibly claim that the Clinton-Gore era led to a period of prosperity that continued right through Election Day in 2000 when unemployment was at a remarkably low 3.9 percent. In the end, many pundits attributed the outcome of that election to the fatigue Americans began to feel over the scandals that had marred the Clinton presidency.
Like Reagan in 1984, Mr. Obama appeared to benefit in 2012 from his argument that he had inherited an ailing economy, a case that voters seemed to accept.
More than that, the unemployment rate under Mr. Obama had dropped in 2012 from a high of 8.3 percent in January, enabling him to point to some improvements. The point is that 7.7 percent unemployment rate in November 2012 might have been perceived differently if the year had begun with an unemployment rate of, say, 6 percent.
Today, Mr. Sanders, a self-described socialist from Vermont who has emerged as an unlikely primary rival to Hillary Clinton, is successfully shaping the economic debate in a way that peers behind the joblessness rate to identify deeper factors that he says ail the country.
In a recent speech in Maine, Mr. Sanders took aim at the “real unemployment” rate that stands at 10.5 percent. This rate includes those who have given up looking for work and those who are working only part time because they cannot find full-time employment.
“Once a month the government publishes a set of figures, and the last figures they published said that official unemployment was 5.4 percent,” he said. “But there is another set of government statistics.”
In framing the debate over the economy this way, Mr. Sanders was also tapping into what experts and even average Americans say is an abiding sense throughout the country that the economic horizons are narrowing for all but a wealthy few.
Indeed, recent labor reports have had bad news buried beneath the headline of the seven-year low in the unemployment rate. The percentage of Americans working or looking for work has fallen to a 38-year low. Wages are flat. And previously reported job gains were revised downwards.
Mr. Sanders is unlikely to win the Democratic nomination. Political observers believe Clinton will continue cruising to a win in the primary. But the economic angst he is tapping into – despite the rosy unemployment rate – is likely to help shape the terms of the debate on the campaign trail.
Interestingly, many Republicans echo Mr. Sanders’ sentiments on the state of the economy. Following the release of the jobs report today, the Republican National Committee issued a statement pointing to the low labor force participation and noting that Clinton would continue the flawed economic leadership of the Obama Administration.
And so, in a sense, no presidential candidate has more at stake in the nation’s economic standing than Hillary Rodham Clinton, the presumptive Democratic nominee who, fairly or not, will be tied to the policies and legacy of Barack Obama.