Cruz Points Out Fact of Weak U.S. Labor Market: CNN Takes Umbrage

CNN’s self-proclaimed Reality Check Team took several statements made by candidates in the Republican Presidential Primary debate on February 13 and declared them either “true” or “false,” with varying degrees of in-between. Tami Luhby, a CNNMoney correspondent took up Ted Cruz’s claim that the United States has “the lowest percentage of Americans working today in any year since 1977” and declared it to be unambiguously false. One can parse Cruz’s words and complain that he did not clearly state whether he meant workers in America, or just American citizen workers. And he did not use the official phraseology of the federal agency that collects labor force statistics, but what he said wasn’t false.

Cruz has relied on this talking point before, as Luhby pointed out in her piece. In fact, Cruz said almost the same thing in response to President Obama’s rosy portrayal of the U.S. economy in January’s State of the Union address. At the time, PolitiFact found Cruz’s statement to be correct, though using inimitable PolitiFact logic, they declared it to be “Mostly True” because it might not be true at some point in the future.

Anyone who has followed the primary campaign knows that this has become a standard attack by Cruz of Obama’s economic record. Sometimes Cruz uses the term “participation rate;” sometimes he says, as he did in the debate, “percentage of Americans working.” Because he always refers to a particular year, anyone with a basic familiarly with the monthly jobs numbers put out by the Bureau of Labor Statistics understands exactly what he is referring to.

What Cruz refers to is the labor force participation rate. In January it was 62.7 percent, the lowest it has been since December 1977/February 1978. That rate is determined by dividing the civilian labor force – all people of working-age officially classified as either employed or unemployed – by the civilian noninstitutional population. The latter category is the total population over the age of 16.

In her attempt to prove Cruz wrong, Luhby used the employment-population ratio for January, which was 59.6 percent. That ratio is found by excluding the unemployed and dividing only the number of employed by the civilian noninstitutional population. Because that percentage is slightly higher than it was 1977, when the labor market was poor and before women permanently entered the workforce in large numbers, Luhby declares Cruz’s statement to be “false.” But Cruz isn’t wrong unless he was touting the figure Luhby uses, which clearly he wasn’t. And because individuals in jail or serving in the military are not counted as part of the civilian population, Cruz may be correct no matter how you look it at due to the exponential increase in the prison population since the 1970s.

Both measures cited come from the BLS and both have their uses. Cruz’s number actually gives a more accurate picture of recent trends in the labor market, according to the BLS, because it includes those who are working and the unemployed who are actively seeking a job. The employment-population ratio, on the other hand, is more often used to analyze long-term trends (often over decades) and to make projections about future participation rates. Almost any economist you read or hear commenting on the labor market to a general audience refers to the labor participation rate, not the employment-population ratio. Maybe Luhby is unaware of this, or perhaps she was intent on taking a shot at Cruz while downplaying the structural unemployment crisis in this country.

Luhby’s analysis of Cruz’s statement for CNN highlights a real problem in contemporary journalism. The trend now is for reporters to “explain” the news to their audience. That is bad enough when many reporters lack even a basic understanding of the topic they are trying to explain. It is even worse when reporters do know the topic and deliberately mislead their readers by only including or omitting facts and statistics that suit their narrative. It violates journalistic ethics when reporters come up with an arbitrary measure of truth to misrepresent facts or to distort someone’s else words. Yes, some statements are clearly false, like just about everything Marco Rubio says about his work on immigration in the Senate, but a politician is not lying whenever they say something a journalist doesn’t like or disagrees with – or even when they use inexact language.

Here our biggest complaint is that, while Cruz talks a lot about unemployed Americans and immigration, he rarely talks about two issues as being interrelated. But at least he is bringing attention to the fact that we have a real problem on our hands; a fact glossed over by CNN’s criticism of how Cruz stated it. Again, one can quibble with Cruz’s lack of absolute precision in getting his point across, but Luhby’s response was not a quibble, it was a take-down.

“It depends on how you measure it” is the correct characterization of Cruz’s statement. However, you measure it, though, the U.S. labor market is in the worst shape it’s been in four decades.

ERIC RUARK is the Director of Research for NumbersUSA