The job-loss Myth

[mavsman55]

This article was printed in my local newspaper last week and really got me thinking. Check it out.

The Job-Loss Myth - by Howard Richman

In "The Emperor's New Clothes", weavers of pretend cloth fool just about everyone into thinking that they have woven the finest of clothes, when in reality they have made no cloth at all. Something similar is happening this campaign season. Although we all can see the prosperity that is before our very eyes, Sen. John Kerry has successfully woven a false statistical case that the Bush economy has lost jobs and that workers' incomes are declining.

As a high-school-level Internet economics teacher, I expect my students to learn to use the Internet to check out economics claims. There are a variety of government Web sites where the latest data can be found; one of the best is the Bureau of Labor Statistics Web site (www.bls.gov). A few weeks ago, my students checked out some of Kerry's claims and found them to be completely false.

When one student checked out Kerry's claim that the Bush administration had lost jobs, he found just the opposite - that the American economy has gained jobs under Mr. Bush. Citing the bureau of labor statistics' household survey data, here is what my student wrote:

When I double-checked these statistics (www.bls.gov/webapps/legacy/cpsatab10.htm), I found that my student was correct. Indeed, 3.5 million jobs have been added during the Bush presidency and the unemployment rate in September was just 5.1 percent. However, September unemployment rates tend to be lower than July and August statistics when students are in the work force. In order to predict an annual unemployment rate from September data, economists make some seasonal adjustments. The 5.1 percent unemployment rate of September would predict an average annual unemployment rate of about 5.4 percent.

We can compare Bush’s September 2004 seasonally adjusted rate with the average rate of unemployment during the last year of the first terms of other presidents as published on the Bureau of labor Statistics Web site (ftp://ftp.bls.gov/pub/suppl/empsit.cpseea1.txt).

Unemployments rates at the end of first terms:

Carter 1980 – 7.1%
Reagan 1984 – 7.5%
Bush I 1992 – 6.8%
Clinton 1996 – 5.4%
Bush 2004 – 5.4%

It is clear that President Bush’s first term stacks up well with those of previous presidents. And we can hope for even better during a Bush second term since unemployment rates usually continue to shrink during presidential second terms. Reagan’s unemployment rate when down an additional 1.3 percentage points during his second term and Clinton’s went down an additional 1.4 percentage points.

But, the Kerry campaign might rejoin, the jobs being lost are more productive, better paying, than the jobs that are being created. In other words, American workers may be employed, but their pay is falling. Kerry has even come up with the specific-sounding statistic that the jobs being lost to outsourcing pay $9,000 more than the jobs being gained. Another of my students checked out the Bureau of Labor Statistics for the truth of this claim. She wrote:

So why haven’t the media been reporting the actual statistics? They have been relying upon payroll-survey statistics which, unlike the household-survey statistics, have been completely out-of-sync with the falling rate of initial jobless claims.

According to the latest news release from the Employment and Training Administration, there were 278,662 jobless claims for the week ending on Oct. 16 as compared to 328,572 jobless claims in the comparable week of 2003 (www.dol.gov/opa/media/press/eta/ui/current.htm).

A comparison with similar weeks in 2001 and 2002 shows that initial jobless claims have actually been falling for the last three years (www.dol.gov/opa/media/press/eta/ui/eta2002588.htm):

October 2001 – 426, 880
October 2002 – 383, 449
October 2003 – 328, 572
October 2004 – 278, 662

Economists have been trying to figure out why the payroll-survey data is so out of step with all of the other employment statistics. Some have speculated that since the payroll-survey data doesn’t include self-employed workers, it is being skewed by a national trend to switch workers from employee to independent-contractor status.

Somehow our nation’s reporters have been unable to do what my beginning high school economics students can do – find the more accurate household survey data. Somebody should be teaching a beginning economics class to reporters.

Although Kerry has successfully woven the myth that the Bush economy has lost jobs and that wages are declining, the facts show otherwise.

[Mavdog]

"myth"? hardly....

All employees, total private, Jan 2000=110,161,000
In Sept 2004=109,926,000

http://data.bls.gov/servlet/SurveyOu...53185161320937

[mavsman55]

Did you not read the article Mavdog? More people have jobs than show up on the payroll sheet.

[Mavdog]

The "internet economics teacher" is using stats that include government employment.

Government Statistics show there are fewer private sector employees in September 2004 than there were in January 2000. . I provided you the link, the BLS numbers prove that fact.

[mavsman55]

Whatever you posted isn't showing up anymore. But either way, the stats conflict each other.

Still, even if those facts are true, 110,161,000 - 109,926,000 = 235,000, significantly less of a loss than Kerry has been pinning on Bush. But the chances of those facts being 100% accurate on either side are not good.

[Dooby]

Originally posted by: Mavdog
The "internet economics teacher" is using stats that include government employment.

Government Statistics show there are fewer private sector employees in September 2004 than there were in January 2000. . I provided you the link, the BLS numbers prove that fact.

I am confused. So if you work for the government, you don't have a job? Sh!t. I could've been collecting unemployment all those years and didn't even know it!

[dude1394]

Clinton 1996 – 5.4%
Bush 2004 – 5.4%

SCOREBOARD DUDE!!!!