Posted on 03/18/2004 9:34:50 AM PST by Willie Green
For education and discussion only. Not for commercial use.
Even before the dismal February job numbers came out from the Bureau of Labor Statistics, the Bush administration had started to promulgate on talk radio shows the notion that the most often cited employment survey was unreliable. The libertarian commentator Neal Boortz was one of the first to take up this line, but the rest have followed. Now the Heritage Foundation has tried to add academic support for this notion.
There are two employment surveys, which have been diverging lately. The Current Employment Statistics (CES) survey -- generally known as the establishment or payroll survey, asks businesses how many workers they employ. It says that 2.4 million jobs have vanished in the last three years, 716,000 since the recession ended in November 2001. The household survey, which asks individuals whether they have jobs, says that employment has actually risen by 450,000 over the last three years. The administration's supporters, understandably, prefer the second number, even though it is also a very modest number well below the performance of past recoveries.
Tim Kane of the Heritage Foundation spends a great deal of time in his study on the issue on arcane explanations involving possible double-counting and cyclical fluctuations, but ends up blaming the failure of the CES to adequately count people who are self-employed, including independent contractors, consultants and free-lancers. Many of these people have lost professional jobs due to foreign "outsourcing" (which Kane does not mention), but many others have fallen prey to the high costs of health care and pensions associated with adding (or keeping) older employees on the payrolls. They are allowed to work, but only if they give up their non-salary benefits.
Nothing Kane points out is particularly novel or insightful. Most economists know that the business environment is changing, but still think the CES survey is the best measure of tracking the employment situation. Even Alan Greenspan, clearly not a partisan critic of the administration, has said "I wish I could say the household survey were the more accurate. Everything we've looked at suggests that it's the payroll data which are the series which you have to follow." Kane himself admits, "Respected observers, including economists at the Federal Reserve and Congressional Budget Office (CBO), have also expressed a preference for the payroll survey. A recent paper by Elise Gould of the Economic Policy Institute makes one of the strongest cases for the orthodox view." The Joint Economic Committee of the Congress also uses the CES, noting that the household data is much more volatile and difficult to compare over time.
There is another behavioral aspect to the use of the household data. Many people who claim they are "self-employed" are in fact unemployed. They have lost steady jobs but will not admit it, both as a matter of pride and because it sounds better when applying for new work. This practice is growing in the IT field, as those who have lost "outsourced" jobs look for free lance projects to keep bread on the table. Most of those in this predicament live on savings or debt, while downsizing their living standards.
The claim that the establishment survey doesn't count the self-employed or jobs created by new businesses is also not true. Moreover, as Kane concedes, "CES survey results are confirmed and updated annually by benchmarking the data to records for all U.S. businesses that file unemployment insurance papers. The result is nearly complete coverage of the U.S. workforce, or 98 percent of all jobs. The household survey has a smaller sample of 60,000 individual households."
Even the household survey paints a bleak picture of an economy in which jobs have lagged far behind population growth. The fraction of adults who say they are employed fell steeply between early 2001 and the summer of 2003, and has stagnated since then. It is the household survey that reported in February that 8.2 million persons were unemployed and 4.4 million people were working only part-time because they could not find full-time work. It was also household data which showed that total employment in the economy dropped by 265,000 people between January and February, even as the CES reported 21,000 net new jobs were created (all by local governments).
People are feeling very nervous about their jobs and their futures, not because they are reading BLS data or debating arcane statistical formulas, but because they are experiencing negative events in their real lives. If the Bush administration, or its partisan supporters in the media, continues to rely on spin to address the issue of the "jobless recovery" rather than develop and implement a program to solve the problem, they are courting disaster at the polls.
William R. Hawkins is Senior Fellow for National Security Studies at the U.S. Business and Industry Council.
"If the Bush administration, or its partisan supporters in the media, continues to rely on spin to address the issue of the "jobless recovery" rather than develop and implement a program to solve the problem, they are courting disaster at the polls. "
All job creation promises are due on Election Day.
Spin is another word for Koolaid. [keeping up with Jones]
The business that I work for is asked only once per year how many people are employed here and that survey (which states that reporting is optional) is from the commerce department.
"[President Bush] thought that Americans wouldn't notice what's happening in our country to the people who make up this country. Thought they wouldn't notice that every minute, two jobs are lost."
"Kerry first introduced this charge back in November, when the nation had lost more than 3 million private-sector jobs since the start of the Bush presidency. (The number has since dipped under 3 million.) The 1,500,000th minute of the Bush presidency ticked by in December. Divide the jobs lost by the number of minutes and — presto!--two jobs a minute. But hirings began overtaking firings last September, and the economy has been creating jobs for a net increase since then of 364,000. So right now, the country is actually gaining jobs at a rate of about 1.4 per minute."
Looks like things have turned the corner to me.
That's an excellent John F'n Kerry imitation.
Amen
So, it's the government's responsibility to create jobs?
Under the Bush Administration's current policies, I don't expect a shortage of articles of that type for some time.
Furthermore, I find William R. Hawkins' commentary on the issue to be refreshingly honest, intelligent and insightful. Don't you?
All government policies have an economic impact that can either promote domestic business investment and job creation, or discourage it.
IMHO, the Bush Administration's current policies discourage domestic business development for the sole benefit of those engaged in international trade.
Everyone else has given up on this 'jobless-recover' nonsense and have long since switched to say, oil prices, that are dooming us. But then again, there are still people who're worried about Y2K.
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