Economy

Obamacare Isn't the Democrats' Biggest Problem. Slow Job Growth Is


For a month since Republican David Jolly won a special election in Florida for the U.S. House of Representatives by running hard against Obamacare, Democrats have worried that the health-care law will prove to be their undoing in November’s mid-term elections. The fear is that Jolly provided a simple road map for Republicans to pick up seats in the House—and maybe even win back the Senate. Run against the Affordable Care Act and victory is yours.

Obamacare may very well hurt Democrats in the fall, but it may not be the worst of their problems. As my colleague Joshua Green points out, lots of people complain about the law to pollsters, yet choose to sign up. A bigger worry is that a year into President Obama’s second term and almost five years after the official end of the last recession, job growth is still slow. The March jobs report, out today, was solid: the U.S. added 192,000 jobs. But it didn’t need to be solid; it needed to be awesome.

March was supposed to be when employers would make up for all the hiring they didn’t do over the past few months when much of the country was buried in snow. While the winter doldrums no longer look quite as bleak as they did—with both January and February’s totals upwardly revised—the uptick isn’t enough to signal a big change, or to allow the president and fellow Democrats to claim they’ve finally got a handle on the economy.

A quarter of the way through 2014, job growth lags the pace of the last two years. During all of 2013, the economy added an average of 194,000 jobs a month; in 2012, it averaged 186,000 new jobs a month. So far this year, the average is 178,000.

And despite adding more than 2 million positions over the past 12 months, 30 percent of Americans think we’re still in recession. Only 16 percent view the economy as growing,  though it has been expanding for nearly five years. Democrats can blame Republican intransigence all they want, but this far into a Democratic presidency, that’s not much of a campaign slogan. Like it or not, this is Obama’s economy.

Short of throwing trillions of dollars of fiscal stimulus into the economy, there’s probably not a lot the president could have done to stimulate significantly more job growth. The U.S. no longer enjoys the built-in advantages that helped drive the economy in the 1980s. Over the past 30 years, the U.S. has gone from having its youngest workforce on record, with an average age of 35, to having its oldest, with an average age of 42. Today, more people are leaving the labor force than entering it. Consumer demand remains soft compared to that of the past 15 years, and technological advancements make it easier to invest in equipment than hire people. If Republicans decide to make the midterm elections all about Obamacare, Democrats should count themselves lucky.

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Philips is an associate editor for Bloomberg Businessweek in Washington. Follow him on Twitter @matthewaphilips.

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