The Truth-O-Meter Says:
Moore

During the Reagan administration, "Millions of people were thrown out of work."

Michael Moore on Friday, October 2nd, 2009 in his movie "Capitalism: A Love Story"

Michael Moore claims in his movie, 'Capitalism,' that during the Reagan era, millions were thrown out of work

In his latest film, Capitalism: A Love Story , Michael Moore singled out the Ronald Reagan administration for the loss of millions of jobs.

During the Reagan administration, he said, American government was run more like a business. The fallout of Reagan's "trickle-down" economic policy, he said, is that major corporations laid off American workers at the same time they were raking in enormous profits.

And, he said, "Millions of people were thrown out of work."

In backup material for that claim on his Web site , Moore points to a line from a May 28, 1991, article in the Washington Post : "Since 1980, 2 million workers have been cut from the U.S. manufacturing payroll. Millions more have accepted — or been forced to accept — reductions in earnings."

A couple of things here.

First, this is a 1991 article, and Reagan served as president from January 1981 to January 1989. In other words, the time frame referenced in the article includes a year before Reagan was in office, and 2 1/2 years after he left. The added time on each end makes a big difference.

According to the Bureau of Labor Statistics, manufacturing jobs went from 19.3 million in January 1980 to 18.6 million in January 1981 (when Reagan took office), to 18.1 million January 1989 (when Reagan left office), and then down to 17.1 million by April 1991, the month before the Washington Post article was written. So the article is correct that 2 million workers were cut from the U.S. manufacturing payroll between 1980 and when the article was written in early 1991.

However, while manufacturing jobs saw a major decline during a severe recession early in the Reagan years (dipping to a low of 16.7 million in January 1983), manufacturing jobs rebounded significantly during Reagan's latter years. So yes, millions of manufacturing workers lost their jobs early in Reagan's tenure, but if you look at the statistics over the entire eight years of the Reagan administration, the number of manufacturing jobs decreased by just a half million.

One other point on manufacturing jobs: If you look at historical tables, the number of manufacturing jobs remained fairly stagnant from the late 1960s to the late 1970s, peaking in 1979 at 19.4 million jobs. Since that time, the number of manufacturing jobs has fairly steadily decreased — it was at 13.4 million jobs in 2008.

"We've seen declines in the share of the work force that is manufacturing for decades," said Heidi Shierholz of the Economic Policy Institute. "It wasn't just in the 1980s. That trend was going on before and since."

The other point of context needed here is that Moore never specified manufacturing jobs when he said millions of people were thrown out of work. When you consider all types of employment, the picture is less dour.

Again, jobs were lost during the recession early in Reagan's presidency, but overall the employed ranks grew from 100 million in January 1981 to 116.7 million in January 1989. And while the unemployment rate grew to more than 10 percent during the recession, the unemployment rate from the start of the Reagan era to the end was 7.5 percent to 5.4 percent.

Lou Cannon, who has written several books about Reagan, called Moore's claim "pure fantasy," belied by the aforementioned statistics.

"Reagan obviously, like Obama, came into office in the middle of a big recession," said Chris Edwards, director of tax policy studies at the Cato Institute. But by the late 1980s, "all the indicators were extremely positive."

Still, Edwards cautioned not to put too much stock in the political actions Reagan took as president on swinging various economic indicators.

"Presidents only have so much effect over the economy or business cycles," he said.

We should note that much of the slack in declining manufacturing jobs was more than picked up by a surge in service industry jobs, a trend that Moore highlights in the movie as well. Many would note that these service industry jobs generally pay lower than manufacturing jobs. Nonetheless, employment rates improved during the Reagan years. Factoring in for population growth, employment ratios grew by 2 percentage points over Reagan's eight years. And failing to note that while saying that millions of people were thrown out of work is misleading. We rate this claim Barely True.



Editor's note: This statement was rated Barely True when it was published. On July 27, 2011, we changed the name for the rating to Mostly False.
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About this statement:

Published: Thursday, October 8th, 2009 at 3:29 p.m.

Subjects: Economy

Sources:

Michael Moore Web site, "Facts in Mike's Films: Capitalism: A Love Story"

Washington Post, "U.S. Competitiveness Stages a Comeback - Manufacturing: Many industries have revived by increasing productivity, modernizing factories and slashing payrolls," by Evelyn Richards, May 28, 1991

Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey

Bureau of Labor Statistics, Labor Productivity and Costs

Bureau of Labor Statistics, Employees on nonfarm payrolls by major industry sector, 1959 to date

Bureau of Labor Statistics, National Compensation Survey

GPO Access, Economic Report of the President: 2009 Report Spreadsheet Tables

Center for Economic and Policy Research, "The Productivity to Paycheck Gap: What the Data Show," by Dean Baker, April 2007

National Review, The Real Reagan Record: "Upstarts and Downstarts," by Alan Reynolds, Aug. 31, 1992

Economic Policy Institute, National data from "The State of Working America 2008/2009"

"President Reagan: The Role of a Lifetime," by Lou Cannon

Interview with Kelly D. Barton, archivist at the Ronald Reagan Library, Oct. 6, 2009

Interview with Chris Edwards, director of tax policy studies at the Cato Institute, Oct. 6, 2009

Interview with Heidi Shierholz of the Economic Policy Institute, Oct. 6, 2009

Written by: Robert Farley
Researched by: Robert Farley
Edited by: Bill Adair

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