“The private sector is doing just fine.”

With the words “The private sector is doing just fine.” Obama was pounced upon by the Republicans as not being in touch with the economy. What seems to have been left out of the discussion in the ensuing discussion was the full context of Obama’s remarks. For the record he said:

The private sector is doing fine. Where we’re seeing weaknesses in our economy have to do with state and local government. Oftentimes cuts initiated by, you know, Governors or mayors who are not getting the kind of help that they have in the past from the federal government and who don’t have the same kind of flexibility as the federal government in dealing with fewer revenues coming in.

So what is the story as told by the data? Reviewing the employment numbers from the Bureau of Labor Statistics a number of points are clear. When Obama took office private sector employment was at 113.8 million while last month BLS put the number at 111.4 million. So Obama is wrong the private sector is not doing just fine. Look deeper. At the depth of the recession when private sector employment reached it lowest point in December of 2009 employment at 105.6 million workers. In the last 18 months employment in the private sector has grown by 5.8 million. That is a respectable number but it has not been enough to bring the economy out of trouble. Unemployment remains unacceptable high at an official number of 12.7 million.

Let’s look at the government side of the equation. When Obama took office there were 21.0 million government workers. Employment in that sector bottomed out in April of this year with the loss of 1.1 million workers for a low of 19.9 million workers. May saw the numbers recover to 20.1 million. In this regard government sector employment from Obama’s perspective has been a real problem. The Republicans on the other hand are likely rejoicing in those numbers as they think that government is too large.

While Obama must understand is that neither sector, private or government are doing “fine,” the Republicans need to realize that there are two sectors to the economy and when the government sector loses a million workers they are a million people who are without an income, these are a million people that the Republicans must realize that in their paradigm the private sector much create jobs for in the mist of an already difficult time. This is a case where it seems that both sides are out of touch with reality.

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