The Unemployment Rate and the President’s Reelection: An Historic Overview.
The United States Bureau of Labor Statistics, a subsidiary of the Department of Labor, in their Employment Situation Summary for July 2011, finds that the unemployment rate remains stagnant at 9.2 percent. Furthermore, the Bureau of Labor Statistics notes that since March, the unemployment rate has risen by a paltry 0.4 percent. With the unemployment rate at 9.2 percent and the economy showing few signs of improvement, President Barack Obama will have an arduous task ahead of him in the next sixteen months: convincing the American electorate that he deserves a second term as president.
When the unemployment rate begins to decrease in an election year, the incumbent president’s chances of winning reelection increase. Conversely, when the unemployment increases or shows little sign of improvement, the president loses his bid for reelection. This article examines the impact that high unemployment rates have had on incumbent presidents’ reelections. Furthermore, it examines the projected unemployment rate in the months leading up to the 2012 presidential election. If the unemployment rate remains stagnant, or continues to rise, it appears likely that President Obama will be a one-term president.
A weak economy and staggering unemployment numbers have periodically plagued incumbent administrations since the founding of our republic. However, it was not until the twentieth century that the unemployment rate became a central focus in presidential elections.
Since the 1976 presidential election, every incumbent president, excluding Ronald Reagan, lost their bid for reelection when the unemployment rate exceeded seven percent. President Reagan’s landslide victory over Walter Mondale in 1984 was precipitated by an improving American economy, an increase in consumer confidence, and a drastic reduction in the unemployment rate. In November 1984, the unemployment rate stood at 7.2 percent, a 3.6 percent reduction from 1982, when it stood at a whopping 10.8 percent. When the unemployment decreases in the years and months prior to an election, the incumbent president generally wins reelection. A reduction in the unemployment rate propelled Ronald Reagan to a landslide victory over his Democratic challenger, Walter Mondale, in the 1984 election. Since 1976, no other incumbent president has been reelected when the unemployment rate has exceeded seven percent.
The table shown below indicates that when the unemployment rate exceeds seven percent, the incumbent president usually loses his bid for reelection. Furthermore, when the unemployment rate is lower than seven percent, the incumbent president wins reelection. In November 2012, the unemployment rate is projected to exceed 7.7 percent. With a high unemployment rate, can President Obama get reelected?
The table below depicts the unemployment rate during presidential election years, in which incumbent presidents were vying for reelection.
|Unemployment Rate||Incumbent President||Election year||Election Outcome|
|7.7 percent||Gerald Ford (R)||1976||Democratic victory|
|7.5 percent||Jimmy Carter (D)||1980||Republican victory|
|7.2 percent||Ronald Reagan (R)||1984||Republican victory|
|7.4 percent||George H.W. Bush (R)||1992||Democratic victory|
|5.4 percent||Bill Clinton (D)||1996||Democratic victory|
|5.5 percent||George W. Bush (R)||2004||Republican victory|
|7.7 percent (projected)||Barack Obama||2012||Unknown|
Note: the 1988, 2000, and 2008 presidential elections were not included on the incumbent president was term-limited.
Since the 1976 election, incumbent presidents have been defeated in their bids for reelection when the unemployment rate has exceeded seven percent. Ronald Reagan, as noted, is the exception to the rule. Furthermore, a relatively low unemployment rate contributed to the reelection of Bill Clinton in 1996, and George W. Bush in 2004. Unlike 1996, however, the economy was not the primary concern of voters in the 2004 election. Instead, national security, foreign policy, and the candidates’ views on counterterrorism determined the outcome of the 2004 presidential election. If the historical examples provided on this aforementioned chart are an indication of things to come, it will be difficult for Barack Obama to win reelection in 2012.
Despite their fundamental differences on policy issues, scholars and pundits from both sides of the political spectrum are in agreement that the economy will be the most important issue in the 2012 presidential election. A Gallup poll conducted on July 29, 2011, found that fifty-four percent of Americans believe that economic conditions are poor. Additionally, seventy-nine percent of Americans believe that economic conditions are getting worse. At this writing, President Obama’s job approval rating is a paltry forty-three percent, the lowest of his presidency. Can President Obama win reelection despite a struggling economy, high unemployment rate (9.2 percent at the time of this writing), and an approval rating of forty-three percent? That question has perplexed political scholars and pundits for months.
It is possible for Barack Obama to win reelection despite a high unemployment rate. Phil Izzo, an economist for the Wall Street Journal finds that in November 2012, the unemployment rate will stand at 7.7 percent, the highest rate during a presidential election year since 1976. Based solely on historical trends, it appears unlikely that President Obama can win reelection with an unemployment rate at seven percent.
However, if one seeks to answer this question by examining the public’s perception of the economy at the time of the election, Barack Obama could win reelection. Even though seventy-nine percent of Americans believe that economic conditions are getting worse, President Obama could benefit from improved economic numbers in 2012. Currently, the unemployment rate is 9.2 percent, a marked decrease from October 2010, when it stood at a colossal 10.2 percent. By November 6, 2012, the day of the presidential election, the unemployment rate is projected to be down to only 7.7 percent. Remember, in 1984, Ronald Reagan was reelected despite an unemployment rate of 7.2 percent on Election Day. The public’s perception that the economy was improving contributed to Reagan’s victory over Walter Mondale. A two percent drop in the unemployment rate could change the public’s perception of the economy and propel President Obama to victory in 2012. Attempting to predict the outcome of the 2012 presidential election sixteen months before it occurs would be a mistake. If the election were held today, however, trends suggest that President Obama would be narrowly defeated in his bid for reelection. In a recent Gallup poll, the Republican presidential candidate is defeating President Obama forty-seven to thirty-nine percent. Despite these numbers, it is much too early to predict the outcome of the presidential election.
Incumbent presidents from both political parties have occasionally fallen victim to high unemployment rates and a weakening economy during an election year since the founding of our republic. Since 1900, just two presidents have won reelection when the unemployment rate has exceeded seven percent: Franklin Delano Roosevelt and Ronald Reagan. With an unemployment rate projected to exceed 7.7 percent in November 2012, can President Obama win reelection? If he wins, he would defy the odds and become just the third president in the modern era to win reelection when the unemployment rate exceeded seven percent. What is clear, however, is that the struggling economy and high unemployment rate will be the most important issues in the 2012 presidential election.