Workforce Participation is key to a vital economy. There was a meme on the Internet that showed how the workforce participation rate tanked under President Bush. That was before the participation rate went on a multi-year slide for President Obama. The Good news is that President Obama's participation rate, non-seasonally adjusted, has been improving. The Problem is that his participation rate is nowhere near what the other three Presidents had during their 93rd month in office.

President Reagan's Participation rate was never below 63%. It came close during January of 1982. The thing to notice is that President Reagan's participation rate surged while his unemployment rate dropped. His peak unemployment rate was over 11% during January of 1983. His unemployment rate dropped to just over 5% by month 93. This is a benchmark number because for years 5% unemployment was considered to be "full-employment."

If 5% unemployment is "Full Employment" is 3.61% Fuller-Employment?" President Clinton came into office because the economy was faltering under President George HW Bush's Presidency. The phrase "It's the Economy, Stupid" was coined during his re-election bid. President Clinton was able to see his participation rate rise and his unemployment rate fall, similar to President Reagan.

President Bush had a Higher Participation Rate his Final October than President Obama has right now.  President Bush's participation rate was 66.07% compared to President Clinton's 66.86% and President Reagan's 66.58% His unemployment rate fluctuated as did his participation rate. Where Presidents Reagan and Clinton saw participation increase and unemployment decrease during their 93rd month, President Bush saw both his participation rate and his unemployment rate surge a little during month 93. President Bush saw an unemployment rate range pretty much between 4% and 6% during his Presidency, until the IKE spike caused by Hurricane Ike and the collapse of the housing market

President Obama has the Lowest Participation rate of the Four President - and it is better than last year. The participation rate started coming into play in the business news during the 2012 election. There was not much explanation given. High participation good. Low participation  bad. That was about it. If the unemployment rate falls and participation improves, as happened with Presidents Reagan and Clinton, this is a good thing. If the unemployment rate falls in tandem with the participation rate this is not good because people are falling off the unemployment rolls without joining the employment rolls. President Obama's Participation rate is  62.89% and is lower than President Reagan's lowest value.

We are Missing Millions of Participants. If you just took the number of jobs created and the number of unemployed workers and added them together the number of participants have increased by a paltry 6 million workers. President Bush added nearly 12 million participants, President Clinton added 15 million and President Reagan added 15.4 million participants.

This is the best case scenario. When we factor in the participation rate to the unemployment number it gets worse.

We have seen an increase in the number of Part-time Jobs, Full-time Jobs, and Workforce Population. What is also apparent is that the workforce participation rate at 93 months is significantly different from the other three Presidents. We have a record level of full-time jobs. We have a record level of part-time jobs. We have a record workforce population. The participation rate is a record on the low side while the others are on the high side.

The Effective Unemployment Rate is over 9%. There is a unemployment value called "U-6" that is supposed to include workers who are discourage, unemployed, or working part-time jobs for economic reasons. This is different from the U-3 unemployment number which measures those out or work who are looking for work on a regular basis. If we look at the job creation numbers in a vacuum, or if we look at the unemployment numbers in a vacuum, the data is empty and meaningless, literally and figuratively.

How many Participants are Missing? If we assume the same level of population and use the participation rates of the other three Presidents then we see that we should have 8.2 million, 8.4 million,or 10.3 million more workers - employed or unemployed - in this current economy. If those people are not working then they are, for all intents and purposes, unemployed. They are not "retired." This column has detailed many times that people are working longer. If those non-participants are counted as unemployed and added to the official unemployment number we have 15.7 million to 17.7 million unemployed workers. If that is true then we have an effective unemployment rate of 9.74% to 12.01%, not 4.80%. We are not at full employment

It's the Economy.

A Failure to Participate

If you compare the current President with Job Creation now with prior Presidents at the end of their terms you are missing the January drop in employment of their final term. You need to compare Presidencies at the same point in time.  This article series was started when an Internet meme said that President Obama had created more jobs than any President Other than President Clinton. They carefully ignored President Reagan. This column examines the failure to participate and the effective unemployment rate when workforce participation is factored into the unemployment rate. President Obama has added fewer participants than Reagan, Clinton, or Bush. Yes Bush.

There are many ways to examine the data. This column is looking at the number of full-time jobs and part-time jobs created by each President, the changes in the unemployment number, as well as the changes in the unemployment rates and participation rates.It wraps up with a comparison of unemployment as a function of the participation rate and calculates the effective unemployment rate.

President Reagan created more jobs than workers. President Reagan had created 18.111 million jobs for 16.01 million workers. He experienced a jobs recession early in his tenure and experienced two recessions within four years. He still added over 18 million jobs.

President Clinton also added more jobs than workers. President Clinton added 20 million jobs for 19.4 million workers. This is a sizable feat. The population curve was radically revised upward during his time in office. We were adding workers and jobs simultaneously. He added almost as many full-time jobs as President Reagan added jobs.

President Bush had added over 9 million jobs through October of his eight year. We saw peak employment during July of 2007. The number of jobs created during the Summer of 2008 were almost as many as during the Summer of 2007.The gap between population and jobs grew under President Bush. It took three years to recover all of the full-time jobs that he lost during his part of the recession that he inherited from President Clinton - The DotCom Crash. President Bush was seeing the impacts of the beginning of the Great Recession as his Presidency was waning.

President Obama had to lose 5 million jobs to gain 17 million jobs - netting a gain of 12 million jobs. It is amazing that it took until the Summer of 2012 to add full-time jobs. There were part-time jobs created as full-time jobs were being shed. We have been seeing non-seasonally adjusted full-time job losses the past few months. President Obama has a similar population and job gap to President Bush. They have both added roughly the same number of workers to the economy. The job creation is what is suffering.

The Number of Unemployed workers fell during October for Presidents Reagan, Clinton, and Obama during month 93. The number of unemployed is tougher to stomach as the participation rate continues to be weaker under President Obama than Presidents Reagan, Clinton or Bush. The combination of the number of employed workers and unemployed workers is considered to be the number of people who are participating in the economy. The next section will deal with Participation, participation rates, unemployment rates, and the effective unemployment level and effective unemployment rate.