I always heard that unemployment was very high during the Carter Administration but according to the Department of Larbor unemployment never got over 7.1. Do these numbers include agriculture-related jobs? Was unemployment really bad during the Carter Administration?
Also, were do the stories of double digit inflation and double digit unemployment come from if unemployment was never that high?
Double-digit inflation was real in the last couple of years of the Carter period (until his appointment, Paul Volcker brought it to a halt in the early 80s). However, I have never heard that unemployment was a problem between 1974 and 1981. (There was a mini recession in 1973 that killed off quite a few jobs, a brief dip (with the auto industry hit pretty hard) in 1980, and a larger recession in 1982 that temporarily killed a lot of jobs, but the employment picture between 1974 and 1981 aside from specific industries was pretty good–you simply could not get enough raises to make it worthwhile to go to work during the last years of that period.)
Prior to that time, conventional wisdom treated unemployment and inflation as being inversely related. To fight unemployment, you lower interest rates which would lead to more investment and job growth. This has an inflationary impact on the economy, so that number is watched like a hawk. When the rate of inflation rises, interest rates are increased to raise the cost of money. This in turn puts the brakes on growth and has the effect of raising unemplyment. It was thought that there was a balance point between unemployment (“natural unemployment”) and inflation. All this changed in the late 70’s. Never before had relatively high unemployment been accompanied by rampant inflation, the cure for one would exacerbate the other. A new word had to be invented, “stagflation”.
This is just a quick and dirty explanation, there were alot more factors that played into it.
It all depends on who you’re asking. I lost a very good job early in 1977, and was unable to get a permanent job for several years.
Of course, I was living in Detroit, which was hit badly (as always; “when the nation gets a cold, Detroit gets pneumonia”). The job I lost was as home office office manager of a small manufacturer (~$5M annual gross), paying what was a very good salary for the times (it was not my fault; long story). However, I had only 12 credits of college work (none business-related). Nobody was hiring bookkeepers or office managers without degrees, and nobody would hire me for a less senior position - so I temped, of course, but even temping wasn’t all that steady. In 1981 I started back to college. In 1985 I took a regular salaried clerical position with the university I was attending. I had a bit of trouble changing jobs in 1988, under Bush 41, but had several offers before getting one I took.
During Mr. Carter’s presidency was the first time in my working life I couldn’t find a permanent job in three weeks or less. Guess who I voted for in 1980? 