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The Truth About September 1983, The Month Ronald Reagan Supposedly Created 1.1 Million Jobs

Have you heard the one about how the Reagan economy produced over one million jobs in one month (September 1983)?

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The story goes something like this, chronologically, as best I can ascertain:

David Winston (September 2011): Extra credit for Mr. Winston for driving the lie home with a reference to the inception of record keeping in 1939: “At this same moment in 1983, Ronald Reagan’s policies were about to create 1.1 million jobs in the month of September alone, the biggest one-month job gain since the Bureau of Labor Statistics officially began keeping track back in February 1939.”

Ronald Reagan
Former President Ronald Reagan campaigning in 1979. AP

Around that same time – and no doubt leading to the Wall St. Journal editorial (immediately below) – both Stephen Moore and Newt Gingrich, among others, were making the rounds on television flogging the bogus number.  I’ll note that one video clip (January 14, 2012) shows Erin Burnett – much to her credit – challenging Gingrich on the number and forcing him to backpedal.

The Wall St. Journal (October 2011): “As it happens, the biggest one-month jobs gain in American history was at exactly this juncture of the Reagan Presidency, after another deep recession. In September 1983, coming out of the 1981-82 downturn, American employers added 1.1 million workers to their payrolls, the acceleration point for a seven-year expansion that created some 17 million new jobs.” Extra credit here to Jim Hoft – the Gateway Pundit – who wasted no time in piggybacking on the Journal’s editorial.

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Senator Rob Portman (June 2012): “But the 1980s recession was followed by five consecutive quarters of strong economic growth rates of between 7 percent and 9 percent. The economy gained more than 1.1 million net jobs in a single month.” I’m inclined to give extra credit to a member of Congress for spreading this lie.

Peter Ferrara (August 2012): “Moreover, in just one month during the Reagan economic recovery boom, September, 1983, the economy created 1.1 million new jobs.  That’s a real recovery.” Extra credit to Mr. Ferrara for spreading this canard (or having it picked up) at multiple outlets.

Monica Crowley (June 2013, start at 00:50): While pissing on the May 2013 jobs number and claiming that a decent recovery would typically see “300, 500 thousand jobs a month,” Ms. Crowley follows that up by saying [1:15] that “we had one month in the Reagan recovery [with] 1.1 million new jobs created.”

John Nolte (August 2013): Double extra credit to Mr. Nolte for the following reasons: He had the lie right there in the headline (Reagan Created More Jobs In A Single Month Than Obama Has All Year), and followed it up with this gem in the body: “In one month, September of 1983, the Reagan Recovery created 1,114 MILLION jobs. This was no fluke, either.” In fact, as we’ll soon see, it was the very definition of a fluke.

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James Pethokoukis (October 2013): “No September jobs report today, but oh to have been covering the economy when the September 1983 jobs report came out. Back then, the BLS reported net new payrolls of 1,114,000. That’s right, over a million net new jobs in just one month. The Reagan Recovery was on.” Mr. Pethokoukis, for whom I have some respect since he recently seems to have come to his senses, did subsequently append a note indicating that the headline number was not quite right, but then went on to ruin that correction by referring to jobs on a “2013 equivalent basis.”

Donald Lambro (December 2014): “In September, 1983, the Reagan economy produced a spectacular 1.3 million jobs in that month alone and was growing at a stunning 4.5 percent (and between 7 and 8.5 percent in succeeding months), growth rates Obama can only dream about.”

So, exactly what happened during that period in 1983? Well, the story is actually remarkably simple, and no reputable journalist would be caught dead espousing nonsense like that which appears above.

The story begins and ends with a strike of communications workers, as detailed by the NY Times, August 7, 1983:

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The strike, when it happened, was of course picked up by the Bureau of Labor Statistics, which had this to say in its September 1983 release, one month before St. Ronnie’s miracle month:

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If that’s a bit fuzzy or unreadable, here’s a clear reproduction, with relevant portion highlighted:

The number of employees on nonagricultural payrolls fell by 410,000 in August to 89.8 million, seasonally adjusted. However, the establishment survey data were significantly affected by a nationwide strike of some 700,000 communications workers. […] After allowing for the strike-caused reduction in payroll jobs, there was an increase of about 300,000 over the month and 1.8 million since last December.

The strike ended. The workers went back to their jobs, and the following month BLS reported:

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Here’s a reproduction of the relevant portion of that release, again with highlights for the benefit of the aforementioned hacks:

Nonagricultural payroll employment rose by 735,000 in September to 90.5 million, seasonally adjusted. About 675,000 of this increase, however, represented the return of employees to payrolls following settlement of strikes, chiefly that of communications workers.

So, sadly for the Reagan zealots, President Reagan, his economy, his tax cuts, his supply-side economics, etc., etc., never produced one million jobs in one month, or anything close to it. It was a simple matter of striking communications workers dinging the payroll numbers one month and, upon their return, goosing them the next. Nothing more, nothing less. Could not be more straightforward.

It’s hard to rank the various deceitful claims against one another. In days gone by, the Journal would never have resorted to such blatantly fact-free editorializing, but that was before they lost their way. That a sitting Senator would disseminate such nonsense is kind of breathtaking. But I’m inclined to give the prize to John Nolte for his assertion that “this was no fluke, either.” It was, John, as previously noted, the precise definition of a fluke.

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Here’s hoping (likely in vain) that the myth of the Reagan miracle (tax cuts!) creating one million jobs in one month can be once and for all put to bed. Unlikely, I know, but I can hope.

Read the original article on The Big Picture. Copyright 2015.
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