Job Creation Stats Under Republicans and Democrats

Former President Clinton mentioned last night in his speech that there had been 42 million jobs created in the last 24 years with Democratic presidents, compared to only 24 million jobs created in the last 28 years with Republican presidents.

That kind of statistic can be misleading in lots of ways; the two most obvious are that he’d cherry picked a time period or that a few very good or very bad years would sway the results.

So I took a look at the BLS data on nonfarm employees. They’re a little different from the numbers Clinton cited, so I imagine he’s using a slightly different definition of jobs. Nevertheless, the trends are the same, so I’m comfortable using the numbers for a comparison.

I looked, year by year, at the net change in jobs, for every year since 1953 (Eisenhower’s first year in office). This was defined as January 31 to January 31, to best coincide with the presidential term. Overall, nearly 48 million jobs were created under 23 years of Democratic presidents (over 2 million per year; I excluded 2012) and nearly 35 million under 36 years of Republican presidents (just under 1 million per year).

I sorted the years by the net percentage change in jobs, to look at whether good and bad years are more likely under presidents of one party.

The twenty best years of the last 59 were:

1955 (Eisenhower, R)
1978 (Carter, D)
1965 (Johnson, D)
1977 (Carter, D)
1966 (Johnson, D)
1972 (Nixon, R)
1983 (Reagan, R)
1984 (Reagan, R)
1968 (Johnson, D)
1964 (Johnson, D)
1994 (Clinton, D)
1959 (Eisenhower, R)
1973 (Nixon, R)
1988 (Reagan, R)
1987 (Reagan, R)
1997 (Clinton, D)
1976 (Ford, R)
1999 (Clinton, D)
1996 (Clinton, D)
1993 (Clinton, D)

1955 had the best jobs numbers with a 5% growth rate; 1993 saw a 2.5% growth rate.

In eleven of those twenty, the president was a Democrat. The years are relatively evenly spread across decades other than the 2000s: two in the 1950s (out of seven years), four in the 1960s, four in the 1970s, four in the 1980s, and five in the 1990s.

If we take out the first year after a party change in the White House, we remove two years that cast Democrats in a favorable light (1993 and 1977) and none that cast Republicans in a favorable light. That means nine out of eighteen “good” years had each party in office.

The worst twenty years tell a different story:

2008 (GW Bush, R)
2009 (Obama, D)
1982 (Reagan, R)
1957 (Eisenhower, R)
2001 (Bush, R)
1953 (Eisenhower, R)
1960 (Eisenhower, R)
1974 (Nixon/Ford, R)
1991 (GHW Bush, R)
1981 (Reagan, R)
1970 (Nixon, R)
2002 (GW Bush, R)
1990 (GHW Bush, R)
1954 (Eisenhower, R)
2003 (GW Bush, R)
1980 (Carter, D)
2007 (GW Bush, R)
1958 (Eisenhower, R)
2010 (Obama, D)
2000 (Clinton, D)

The worst year for job growth was 2008, with a net loss of 3.2%; 2000 saw a slight gain of 1.2%.

You’ll notice that on this list, we see a lot of R’s: fourteen of the fifteen worst years, and sixteen of the twenty worst years were when a Republican was in office. Taking out the transition years of 2009, 2001, 1953, and 1981, we still see the same trend: the eleven worst years, and thirteen of the worst sixteen happened during a Republican presidency.

The middle tier of nineteen years of roughly average job growth shows a Democrat-Republican split in between those of good and bad: eight years with Democrats in office and eleven years with Republicans in office. Excluding transition years, the numbers are seven and ten.

Clearly, these results indicate stronger jobs numbers under Democratic presidents. That begs the question of whether the trend is just random variation, or something that’s statistically meaningful.

So I ran some statistical tests: what’s the likelihood that — in a completely random world — of the top twenty years, at least eleven would be under a Democrat, versus four or fewer of twenty bad years under a Democrat? About 2.5% of the time. What if you only looked at comparable numbers for non-transition years? It’s higher: around 6%. What if you defined good and bad as only the top fifteen? 4% and 1.7% for all and non-transition years, respectively. All of these are one-sided tests, meaning they answer the question “what is the likelihood of Democrats doing as well or better than ___ by chance?”

Statistical significance is often at the 5% (95%) threshold, meaning that an event in the middle 95% of a probability distribution is judged not different, while an event outside that threshold is significant. That means a significant event should fall at or under 2.5%.

The numbers above suggest borderline statistical significance: with some parameters, the differences between Republicans and Democrats look significant; by tweaking them slightly, they appear insignificant.

Based on all that, it’s certainly plausible that there’s a real difference between job creation under Democratic presidents and Republican presidents. After this fairly cursory analysis, I wouldn’t feel comfortable defending such a relationship, but the claim is closer to reality than much of what was stated at the recent conventions.

However, comparing Obama and Romney — who seemingly both fit within the historical mainstream of their parties on economic policy — it’s a different story. If my goal was strictly to generate more job growth, there’s no question that I’d pick Obama. While the trend is borderline from a scientific perspective, it’s strong enough to use as a significant weighting in a real world gut-based decision.

Mike Greenfield founded Bonafide, Circle of Moms, and Team Rankings, led LinkedIn's analytics team, and built much of PayPal's early fraud detection technology. Ping him at [first_name] at mikegreenfield.com.