Republican candidate Marco Rubio released an advertisement that harkens back to Ronald Reagan's famous "Morning in America," campaign ad, but Rubio's version features opening footage from Vancouver. (YouTube/Marco Rubio)

“Today, more men and women are out of work than ever before in our nation’s history. People paying more in taxes than they will for food, housing and clothing combined.”

—voiceover in new Marco Rubio ad, “Morning in America”

This new campaign ad has already been mocked for opening with a scene of Vancouver (a Canadian city). But the factual assertions are rather bizarre too.

In fact, the ad illustrates the dilemma for Republicans as they try to challenge the Obama economic record at a time when the unemployment rate has dipped below 5 percent. Obama has also kept in place virtually all of the Bush-era tax cuts that Democrats had once vowed to overturn, with only rates jumping for the wealthiest Americans.

The solution, it appears, is to invent new—and misleading—metrics. In fact, one claim is straight out of Donald Trump’s playbook, though phrased more artfully so it does not seem quite as outrageous.

‘More men and women are out of work than ever before in our nation’s history’

We have regularly dismissed Trump’s ridiculous claim that the unemployment rate is 42 percent. But the line in Rubio’s ad effectively says the same thing.

The Bureau of Labor Statistics every month produces a data point labeled “not in labor force,” which includes persons aged 16 years and older in the civilian noninstitutional population who are neither employed nor unemployed. As of January, the number was 94.062 million, a slight decrease from the high reached in November of 94.38 million. (Technically, then, the Rubio claim is a couple of months out of date.)

Of that group, 7.79 million are unemployed and a little over 2 million are discouraged from seeking work. That adds up to about ten million people.

But the other 84 million are simply not in the labor force—and almost always by choice. Most are simply retired, a number that grows by 10,000 people a day as the Baby Boom generation retires. After all, the oldest baby boomers (those born in 1946) became eligible for early Social Security benefits at age 62 in 2008 and reached full retirement age at 66 in 2012.

This wave of retirements have certainly reduced the labor force participation rate. BLS says it now stands at 62.7 percent, which is a slight improvement from the end of last year.

But the Federal Reserve Bank of Chicago in 2012 concluded that just over half of the post-1999 decline in the participation rate comes from the retirement of the baby boomers. Barclays economists, meanwhile, say that just 15 percent of the drop in the labor force stems from people who want a job and are of prime working age (25-54).

In any case, it is simply false to assert that people are “out of work” when they are not seeking work in the first place. Retirees, students and stay-at-home parents are simply not part of the active work force. It’s especially strange to make this claim when the official unemployment rate is so low.

‘People paying more in taxes than they will for food, housing and clothing combined’

This statement is derived from a chart produced by the nonpartisan Tax Foundation. But as with the previous claim, this is a misleading data set.

Essentially, the Tax Foundation takes the aggregate amount of taxes paid by Americans and compares that to the aggregate amount spent on food, clothing and housing.  The data is drawn from the Commerce Department’s Bureau of Economic Analysis.

In 2014, the Commerce Department says, American spent more than $894 billion on food and beverages consumed at home, and an additional $776 billion on restaurant meals and beverages. For clothing, Americans spent $374 billion, and for housing and utilities, it was $2.17 trillion. Total expenditures: $4.2 trillion.

That’s then compared to the aggregate amount spent of federal and state taxes—about $4.7 trillion.

But this is a misleading comparison. As Republicans frequently—and correctly—note, the vast majority of taxes are paid by the wealthiest Americans; more than 40 percent of Americans pay no income tax. Thus aggregate numbers reflect little of the actual tax burden faced by most Americans–or, as the ad puts it, “people.”

The Commerce data shows that spending on housing, food and clothing consumes about 28.5 percent of personal income. By contrast, the average federal tax rate for American households is about 18 percent, as of 2011, according to the nonpartisan Tax Policy Center. Only the top one percent faces an average tax burden of more than 28 percent, according to TPC. (Indeed, for all but the top 20 percent, the average tax burden is 15 percent or less.) State and local taxes would add a bit to these numbers, but generally for all but the wealthiest Americans, the combined spending on clothing/food/housing would be higher than the tax burden.

The Rubio campaign did not respond to a request for comment.

The Pinocchio Test

The first statement–“more people are out of work than ever before”– is clearly worthy of four Pinocchios. Rubio should be ashamed to be wandering in Trump’s statistical fantasyland. The second statement is between Two and Three Pinocchios, in that it is based on actual Commerce Department data, but misleadingly presented. Overall, this ad is worthy of Three Pinocchios.

Three Pinocchios

 


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