NEW YORK - This country's jobless rate could very well determine who will be heading to the White House next January.
There's an intriguing theory with some historical backing that President Bush will be re-elected, but only as long as the nation's unemployment rate averages lower than 5.6 percent in August, September and October.
If the rate rises to 5.6 percent or higher? Then, so the theory goes, Dubya will lose the Nov. 2 election and will soon be out looking for work.
This theory is the brainchild of John Challenger, a prominent employment consultant and observer of America's job market. With some notable exceptions, in 10 of the last 14 elections (or 71 percent of the time), the incumbent president was re-elected when unemployment averaged less than 5.6 percent in the three months leading up to the election.
Most Americans do not pay much attention to gross domestic product growth, the strength of the dollar, inflation or other economic indicators, said Challenger, CEO of Chicago's Challenger, Gray and Christmas global outplacement firm. But Americans do care about whether they and their neighbors have jobs.
For the record, the current unemployment rate is 5.5 percent.
That's close. At first, it might suggest Bush has got the unemployment rate on his side.
But will it remain so this fall? Recent economic data show a sharp monthly slowdown in the creation of new jobs, averaging 242,000 through the spring, then decelerating to 78,000 in June and just 32,000 in July.
A key statistic: The number of jobs gained - or lost - in August will be announced this Friday. It is not expected to be promising. The figure comes out just one day after President Bush speaks to the Republican National Convention here on Thursday night.
That 5.6 percent theory may seem a bit loopy. But it was on my mind early Wednesday morning as I made my way south in Manhattan to a rather novel form of protest against what many believe is at least a stagnant job market for many Americans.
From 8:13 to 8:31 a.m. - the length of an 18-minute coffee break - thousands of people stood single-file on sidewalks in a line stretching several miles from Wall Street to Madison Square Garden, where the Republican National Convention is being held. Each person in line held aloft a pink piece of paper that said: The next pink slip might be yours!
The symbolic protest was organized by major labor unions and the People for the American Way, a liberal political coalition.
Some of the people in line were genuinely unemployed. Myra Bronstein, who has an electronics engineering degree, came all the way from the Seattle suburb of Mercer Island to participate. The 41-year-old lost her job last year as a software tester at WatchMark Corp. In order to qualify for severance, Bronstein said she had to train two workers temporarily here from India to do her work, and agree not to sue the company. The jobs available in Seattle are mostly temporary positions lacking benefits.
"I hear about these new and better jobs, but it proves not to be the case," she said. "There is a huge disconnect."
Arlene Dombrowsky, 61, lost her garment factory job at a business called Alfred Dunner in Jim Thorpe, a small town in Pennsylvania's Pocono Mountains. She does not know where the factory's 100 jobs went, but hears they ended up overseas. Other factories in her town are following the example.
In spot checks along the line, others held jobs but said they, too, had been victims of layoffs in the past. Hector Gomez, who holds a financial services job, has been told he will lose it in October. He stood next to his wife, Amy, who said she has lost jobs in the past and now works for less pay.
Veronica Johnson, who works for New York University, said she is about to become a two-income family. She must take a second job to keep up with her flat wages and rising expenses.
And Laura Grady, newly arrived from Philadelphia, held her pink slip to honor a friend back in Philly. He's a former bank teller, she explained, who cannot find another job.
Can a peaceful and quiet 18-minute vigil during this week of huge protests, scuffles, arrests and infinite distractions make a difference? At the least, the group should be commended for the sheer logistics of snaking such a long line of people through the city.
In the Bush administration's defense, White House economic advisers offer several points.
First, between 60 and 70 percent of the overall jobs lost in Bush's first term occurred after and largely because of an extraordinary event: the 9/11 terrorist attacks three years ago.
Second, more new jobs have been created this year, reversing at least part of the net losses since 2001. Yes, the recent pace of job creation has slowed, but that should be temporary, Bush advisers suggest.
Third, the economy is showing strong growth.
Fourth, the main reason new jobs have been slow to materialize is not because of outsourcing work overseas. It is because the productivity gains in the U.S. economy have remained so strong in recent years that businesses have been able to grow and generate strong earnings with far less need to add new people to their payrolls.
For folks out of work, that sounds rather cold. But it is a competitive plus for the U.S. economy that will help keep the country stronger in the long run.
And finally, though the job market may be far from ideal, a 5.5 percent unemployment rate just isn't that bad. It is lower than the average unemployment rate in the 1990s, '80s or '70s.
Greg Mankiw, chairman of President Bush's Council of Economic Advisers, notes that today's unemployment rate looks a lot better than the 6.3 percent recorded in June 2003. And today's 5.5 percent rate happens to be the same as it was in 1996, when President Bill Clinton ran for re-election - and won.
Still, there are some big differences this year. Bush and opponent John Kerry are locked in much more heated and close White House race. The winning margin will be determined by swing states that range from sunny Florida - the biggest producer of new jobs of any state in recent years - to harder-hit Ohio and Michigan. Ohio's unemployment rate stands at 5.9 percent. Michigan's is higher: 6.8 percent.
Challenger's theory, of course, depends on the national unemployment rate being above or below 5.6 percent. But he said that Ohio and Michigan voters will look at their own economic well-being, and that of their neighbors, before stepping into the ballot box.
The curve ball this fall, of course, is the war in Iraq.
Still, watch the unemployment rate these next few months. It's going to be very close.
