Ad says workforce smaller under Barack Obama than any time since Jimmy Carter

The American Future Fund, a group that advocates "conservative and free-market" principles, has released an advertisement that -- like other ads and Web videos in this election cycle -- seeks to compare President Barack Obama to his one-term Democratic predecessor, Jimmy Carter.

"Remember where we were four years ago: 11 million people out of work, a $10 trillion debt," the narrator says in the ad, which was released Oct. 1. "But four years later, 13 million people out of work, $16 trillion debt, and now the lowest workforce in 31 years." As the narrator mentions the size of the workforce, the visual on the screen shows the line "lowest workforce since Carter" against an image of Carter’s face dissolving into Obama’s.

We thought we’d check whether under Barack Obama, the U.S. now has the "lowest workforce since (President Jimmy) Carter."

Some contradictions

Before looking at the substance of the comparison, let’s point out a few internal problems with the ad.

First, 31 years ago was October 1981 -- 10 months after Ronald Reagan took office. Given the reverence Republicans have for Reagan, it’s easy to see why this ad focused on Carter instead. But "31 years" and the Carter reference can’t both be right. One of them has to be incorrect.

Second, the ad uses the term "lowest workforce." The term "workforce" refers to an absolute number of people who are either employed or are seeking work. Using this statistic, the group’s claim is way off, because of the nation’s overall population growth during the last three decades as well as the expansion of women in the workforce through the 1990s.

In 1980 and 1981, the size of the civilian labor force was a bit over 100 million. Today, even after a drop due to the most recent recession, it’s more than 150 million -- a 50 percent increase.

The American Future Fund didn’t respond to us for this story, so we can’t be entirely sure what they meant.

We wonder if they were referring to a different statistic -- one that takes into account the size of the nation’s population. That statistic is called the civilian labor force participation rate -- essentially, the labor force divided by the nation’s total population.

Comparing labor force participation rates

So what happens when you look at the labor force participation rate? By the numbers, the ad isn’t far off.

The figure for August 2012 -- the most recent month at the point the ad began airing -- was 63.5 percent. (On Oct. 5, the new figures for September showed it ticked slightly upward to 63.6, but we'll use the numbers that were current when the ad started to run.) The last time the rate was as low as 63.5 percent for more than one consecutive month was in 1979, when Carter was president.

However, it’s worth noting a few caveats.

First, the rate did dip to 63.5 once during Reagan’s presidency, in September 1981.

Second, if you smooth out monthly volatility, labor force participation rates were close to indistinguishable during the final year of Carter and the first year of Reagan, most of which was a recessionary period. The average labor force participation rate in 1981 under Reagan was only one-tenth of 1 percentage point higher than it was in 1980 under Carter.

So the focus on Carter has a grain of truth, but even there the ad overplays its hand a bit.

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That's because economic factors are not the only things that affect the labor force participation rate. The other big one is demographics, particularly the aging of the population.

In the 2000 Census, the number of Americans aged 60 to 69 -- that is, those who had recently hit retirement age or would do so within a few years -- was to about 20 million. But thanks to the Baby Boomers, the number surged in the 2010 Census to more than 29 million, almost a 50 percent increase. This matters because the more people aged 60 to 69, the more people who are passing into retirement age -- or, to put it another way, leaving the labor force. Even though more people proportionally are remaining in the workforce after retirement age, the difference isn’t big enough to cancel out the flood of new retirees.

Our ruling

The ad says the U.S. now has the "lowest workforce since Carter," emphasizing the point by morphing Carter’s face into Obama’s.

The ad includes a significant inconsistency about dates, and it uses the word "workforce" incorrectly. During the Carter administration, the size of the civilian labor force was a bit over 100 million. Today, even after the most recent recession, it’s more than 150 million. By a different measure -- the civilian labor force participation rate -- its claim is not far off. In general, the last time the rate was consistently this low was under Carter.

However, not all the blame for the low participation rates today has to do with the recession and slow recovery under Obama. A portion of the decline has been driven by long-term demographic trends that have nothing to do with the person or the party in the White House.

Because it garbles the facts on a number of fronts, we rate the claim Mostly False.