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March 03, 2004

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» The Myth of 3 Million Jobs from Captain's Quarters
Sean's excellent blog, Everything I Know Is Wrong, explodes the myth of the three-million-job loss during the Bush administration in a funny and well-sourced post from last night. Apparently, Sean did what John Kerry's entire staff was unable to do... [Read More]

» The 3-Million-Job Myth from Blogs for Bush
Sean's excellent blog, Everything I Know Is Wrong, explodes the myth of the three-million-job loss during the Bush administration in a funny and well-sourced post from last night. Apparently, Sean did what John Kerry's entire staff was unable to do... [Read More]

» The Myth of Missing Jobs? from FreeSpeech.com
Hey, I will confess that this economic stuff is a mystery to me, and I never feel like I can get good honest information. But this seems solid enough. Sean of the blog “Everything I Know is Wrong” is thinks he has proof that in fact more people have jo... [Read More]

» Its Either Lying Or Stupidity from Say Anything
Either Kerry is something of a dim-bulb or he's lying to the American people. Over and over he's talked about the 3,000,000 Americans Bush has supposedly put out of work since getting into office. I knew that number was too... [Read More]

» The Lie and the Numbers from King of Fools
Sean over at Everything I Know Is Wrong questioned the validity of at John Kerry's claim that the economy is going down the tube and that Bush has lost 3 million jobs. His results are not surprising (to me at... [Read More]

» Protesters Line Up With Pink Slips from Say Anything
NEW YORK - Thousands of protesters waving pink fliers that read "The Next Pink Slip Might Be Yours!" formed a symbolic unemployment line stretching three miles from Wall Street to the site of the Republican convention on Wednesday. "I've been... [Read More]

Comments

Melanie P

I'm so happy that someone is finally talkling about these stats. I have written local newspapers, television stations and many, many internet sites, but no one would listen. They just take the word of the media.

I thought this report by the BLS was interesting:

In light of the revisions to both the payroll and household survey estimates, this is an opportune time to summarize the recent trends in employment as measured by thetwo surveys. From the trough of the recession in November 2001 through January 2004, payroll employment decreased by 716,000. Over the same period, total employment as measured by the household survey increased by about 2.2 million (after accounting for the changes to that survey’s population controls).

Part of this discrepancy results from the different definitions of employment used in the surveys. For example, the household survey includes the self employed and farm workers; the establishment survey does not. When the household survey estimates are adjusted for the major differences between the surveys that we can quantify, the increase since the end of the recession is about 1.7 million.

There are other differences between the two surveys that are more difficult to quantify. We know, for example, that some independent contractors are not reported as self employed in the household survey but rather as wage and salary workers. Such differences limit our ability to fully reconcile the employment measures from the two surveys.

Aside from definitional differences, BLS continues to investigate a number of possible explanations for the large disparity in employment growth as measured by the surveys.With regard to the household survey, for example, we know from past research that difficulties inherent in estimating population growth can lead to under- or over-statements of employment growth. One of the most challenging components of population growth to gauge is immigration. The Census Bureau remains engaged in efforts to improve these
estimates.

An issue often raised with regard to the establishment survey is that it might lag in recording a substantial portion of the job growth generated by new business formation. We do not believe that is the case. The payroll survey sample includes establishments of all sizes, and the monthly data include a model-based estimate for net employment growth from the birth and death of establishments. That estimate is derived from the current month's sample and from historical trends. The relatively small March 2003 benchmark revision announced today, as well as comparisons to second quarter 2003 data, show that the monthly establishment survey estimates tracked the count of jobs derived from the unemployment insurance system very closely.

A

You might want to consider the fact that 150,000 people are added to the work-force each month on average due to population growth. So that increase in jobs you see is in fact an illusion. Bush is way down overall in terms of new jobs created. Face it, Bush has done a miserable job of creating new jobs in this country. You might give him excuses, but face the facts. He has done practically nothing to help create jobs. His tax cuts were amazingly inefficient at this.

Del Simmons

So A, do elaborate...

What you're saying is that Bush hasn't created jobs as quickly as you would liked for him to have created them. Is that correct?

The fact is that there is a mighty big difference between "Bush lost 3 million jobs" and "Bush didn't create as many new jobs as we wish he had".

Am I missing something here? Or is John Kerry's claim of "3 million lost jobs" factually incorrect?

Sean

A,

You are confusing "percent employment" with the "number of jobs."

This chart does not measure percent employment, it is a measure of the number of people over 16 years old who are employed. You are talking apples and oranges. The number of jobs has definitely increased as indicated.

It is possible as you indicate, for jobs to increase and have unemployment increase as well (if the employable population increases more than the jobs). If you want to talk percentages, compare these numbers (from Rich Lowery at the National Review Online):

“During the first three years of the Bush administration compared with the first three years of the Clinton administration, the inflation rate is lower (1.9 percent versus 2.6 percent), the unemployment rate is lower (5.5 percent versus 6.2 percent), annual productivity growth is higher (4.1 percent versus .5 percent), and the increase in nonfarm real compensation per hour is higher (+0.8 percent versus -0.3 percent).”

Lowery indicates that Bush’s tax cuts have reduced personal tax payments by 19% since 2001 and disposable income has increased by a corresponding 11%. He also says that, “the unemployment rate has dipped to 5.6 percent, lower than the average unemployment rate of the 1970s, 1980s and 1990s.”

With all of the Democratic candidates claiming that up to three million jobs have been lost during the Bush administration Irwin Seltzer at the Hudson Institute helps to clarify The Fuzzy Jobs Picture.

"The trouble is that no one seems to have a clear, unambiguous picture of what is going on in the jobs market. And with good reason. The U.S. Department of Labor regularly surveys employers to ask how many people they are hiring, and how many they have laid off. It also surveys households to find how many people say they are in work. Any sensible person would expect the results of these two surveys to be more or less the same: if employers are hiring, more households should be reporting that their members are finding jobs."

'Alas, the world of economic statistics is not so straight-forward. In the past year, employers reported a net loss of over 70,000 jobs, while households reported a net gain of over two million. Believe the second figure. Here’s why."

"The survey of employers, which is the more widely reported of the two, is so bleak because of the way it is designed. Assume, for example, that a factory employs some 3,000 workers making widgets, and 300 workers in the on-site canteen. Management decides to outsource the food service. When this employer next responds to the employment survey, he will report a job cut of 300 and, best of all, that he is now producing all of the widgets that he once produced with a workforce of 3,300, but using only 3,000 workers–a bogus productivity miracle."

"Even more misleading is the fact that the new firm formed to handle the canteen catering is not picked up in the employment survey, which does not cover new firms or the newly self-employed."

"Turn now to the household survey. The canteen worker reports that he most certainly has a job, even though it is with a new employer. And if the new catering firm upgrades the quality of the fare on offer, so that fewer workers bring their own homemade lunches, forcing the caterer to add workers, those newcomers to the job market will not be picked up in the employment survey, but will be recorded in the household survey."

The jobs picture is actually better than the conventional numbers show. If you look for it the BLS has a new report that discusses this as well.

A.W.

Fyi, i linked to your site here:

http://www.freespeech.com/archives/002155.html

(or you should be able to click on my name to get there).

I am a lawyer by trade and frankly don't "get" economics. So Sean, you might take a peek over there and see where we are screwing up.

buzz harsher

Check out the "Civilian Unemployment" chart for the source of the "3 million" number. This value goes from 6 million to 9 million back down to 8 million. In April 2003, the peak, there were, in fact, 3 million more _un_employed people than in Feb 2001.

Since then, the number has dropped by about a million, so there are now 2 million more unemployed than when Bush took office.

So, (1), the "3 million" refers to a statistic different from the one Kerry describes, and (2) that number is now an exaggeration anyway.

Cl1mh4224rd

quote: "Look at the Jan 2003 number, 137,477,000, which means there are 1,119,000 more jobs than this time last year."

Conveniently leaving out the fact that the number of jobs in Jan 2002 is more than *2 million less* than the previous year, and that even with the 1mil jump by 2003, the numbers were still lower than Bush's first year.

I'm getting dizzy. ;-)

Meg Eason

I found your column as I was surfing the internet trying to find some actual numbers regarding some of the claims democrats are making on unemployment, the deficit, etc... Your link the the labor department was most helpful. THankyou.

However, I found the conclusion of your article somewhat off base.

The chart you used was current EMPLOYMENT, not unemployment, which struck me as odd since we are speaking of jobs lost. I decided to pull up both charts and compare. You are correct that The Jan 2001 figure is 137,790,000 (the numbers are all in thousands) and the Jan 2004 figure is 138,566,000, meaning there are more employed now than 3 years ago.

BUT One needs only to move the first date back from 1994 to say 1984 then it become clear that employment levels ALWAYS increase steadily every year, based on the new people who turn 16 and can leagaly enter the workforceevery year (especially now as baby boomers kids get out of college)

UNEMPLOYMENT, however, fluctuates year to year. In June of 1984 it was at 8226 (in thousands) in 94 7927, in 2000- 5749 and currently, and in June of 2004 it was 8248... THis means that unemployment has risen by roughly three million since 2000. My guess is that is where democrats claims come from.

I would like to assume that you simply forgot to check these facts for yourself and are not directly and purposefully misleading your readers by exposing them only to the graph that would validate your opinion. I expect, once you read this, some sort of correction will be issued on the page.

Best Wishes,
Margaret

Sean

Maragret,

You are making exactly the same mistake as Melanie P. in the second comment above. "Employment" lists the number of jobs in the system, "unemployed" lists the number of people who are not employed, not the number of lost jobs. When the number of people in the job market increases rapidly it is possible to have an increase in the number of jobs and an increase in the number of unemployed. There has indeed been an increase in jobs - and an increase in population. Since the rate of unemployment is holding steady at 5.6% (which is lower than the national average for the 1970's, 1980's, and 1990's) it means that job creation is holding pace with labor market increases.

It's a good thing.

Tim

Sean, it's a bit misleading to compare Clinton's first 3 years to Bush's first 3 years. Clinton was starting with the mess that Bush Sr. left us, while Bush Jr. was lucky to take over where Clinton left off. For example, you're comparing their unemployment rates of 5.5% versus 6.2%, but you should be looking at the change. Clinton brought the unemployment rate down a couple points in the first 3 years while Bush has brought it UP a couple points. At that rate, by the time he leaves office Bush might have gotten it up over 10%.

Tim

Oh, and how do you get that 5.6% is lower than the rate through the 90's? During Clinton's second term the annual rate never went above 5.0%.

Or are you talking about the combined rate over the last 30 years? Because if that's the case then you are really just desperate here. Why don't you throw in the Great Depression while you're at it- that would make Bush's numbers look really good.

Meg Eason

Sean,
Margaret again. Thanks for responding. It didnt make much sense to me that two charts labled employed and unemployed would characterize two things (number of jobs vs. number of people unemployed) without mentioning that to the reader. So I wrote the the department of Labor statistics to ask. The response was that you are mistaken in your assumption that Employment is in number of jobs- it is in number of PEOPLE employed, just as number of people UNEMPLOYED is UNEMPLOYMENT. It is an easy mistake to make, but still, you should look into changing your article.

While surfing the beauros site I also looked up some other interesting facts-- the number of Mass layoffs since 2001. There were, according to the national beauro of labor statistics (ftp://ftp.bls.gov/pub/news.release/History/mmls.01222004.news) 1,888,926 jobs lost to mass layoffs in 2003, 2,245,051 in 2002 and 2,496,784 in 2001.... That could be where "those democrats" get thier high numbers.

Of course the ALF-CIO claims that only 1.2 million jobs have been lost under bush,and CNN (http://money.cnn.com/2004/01/19/news/economy/election_sotu/ ) says 2.4 million.

However you look at it- its a BAD thing.

Once again, best wishes,
Margaret

jrh

Please tell me you're kidding. Bush's idea of economic stimulus is simple. I'll outline it:

- if there's a surplus, cut taxes on the rich

- if there are deficits, cut taxes on the rich

- if there's a recession, cut taxes on the rich

- if the economy is growing, cut taxes on the rich

- if we're in a costly multi-hundred-billion-dollar war, cut taxes on the rich

You can probably fill in the gaps. Now, for all of this tax-cutting-on-the-rich, what have we gotten? Terrible job stats, no matter how you twist them.

Clinton CREATED 23 MILLION NEW JOBS. It doesn't matter how you want to skew the stats. People are having far more trouble finding good jobs today than they did during the Clinton years. Take a survey. Some people are settling for burger-flipping, but going by the usual job statistics, Bush has the worst jobs record than any president since the Great Depression. Note: EVERY PRESIDENT SINCE THE GREAT DEPRESSION HAS CREATED JOBS, and going by the usual stats (not your own conveniently invented ones), Bush HAS NOT CREATED ANY JOBS and has actually lost a few.

Bush's methods of economic stimulus are utterly crude and outdated. There are far better and cheaper ways to stimulate the economy. And there are ways to do it without borrowing from our children's generation.

What's more important to you? Finding new ways to rationalize how great a president is, or honestly seeking the truth?

And ask yourself -- which is more helpful to America? Which is more patriotic?

I'm neither a Democrat nor a Republican, but I believe that misinformation, in a democracy, helps no one.

"Knowledge will forever govern ignorance: And a people who mean to be their own Governors, must arm themselves with the power which knowledge gives."
--James Madison

Dave

I guess it depends on what statistics you prefer to look at. Thanks for misleading your readers. From Media Matters In America:

After the Bureau of Labor Statistics' (BLS) Employment Situation Summary establishment survey reported on August 6 that 32,000 jobs were created in July -- a disappointing number in light of projections that generally hovered around 225,000 -- radio host Rush Limbaugh and syndicated columnist Robert Novak both argued for using the results of the BLS household survey instead, which were seemingly more favorable for the Bush administration, despite the fact that the household survey is widely considered to be less reliable than the establishment survey.

In his August 12 column, Novak pushed what he called "[a] rosier Labor Department measure ... the household survey of job increases," writing that according to the economists he "consulted, the 32,000-job figure reflects less the real state of the economy than the faults of the [bureau's] methodology ... undercounting job creation"; on the The Rush Limbaugh Show, on the day that the jobs data were released, Limbaugh claimed that "the true number, the real number of jobs created was 600,000." According to the household survey, "total employment rose by 629,000 to 137.9 million in July."

Novak and Limbaugh argued for using the household numbers, even though the BLS's establishment survey, which measures "total nonfarm employment" each month, is considered "the best indicator of current job trends," Kathleen P. Utgoff, commissioner of the BLS, said in a March 6 New York Times article. In February, Federal Reserve Board Chairman Alan Greenspan said that "Everything we've looked at suggests that it's the payroll data which are the series which you have to follow," as New York Times columnist Paul Krugman noted on August 10.

According to a BLS explanatory note, the establishment survey collects information from the payroll records of approximately "160,000 businesses and government agencies covering approximately 400,000 individual worksites;" in contrast, as the Chicago Tribune reported on August 7, the household survey queries only about 60,000 households. Consequently, the Tribune reported, "the household figure is considered less reliable."

But that didn't stop Limbaugh from claiming that the household number represented "the true number" or Novak from suggesting it was proof of a "revived" economy. In reality, as the International Herald-Tribune reported on August 7, even if the household survey was taken to be an equally credible source of information about job creation, the Bush administration's record in this area would not be much improved:

Over all, the household survey now shows that employment has risen by 1.9 million jobs, or 1.4 percent, since President George W. Bush took office, while the establishment survey shows employment is down by 1.1 million jobs, or 0.8 percent

Going back to Harry Truman, that is the poorest job creation record of any president to this point in a presidential term, by either measure. The second worst was turned in by Bush's father, who did not win a second term in 1992.

WappyFall

Well, it is all a semantics game that democrats want to play. When they talk about Clinton's 23 million jobs created, they talk about absolute number of jobs. It does not take into account how many new jobs had to be created to keep up with the increase in the number of people entering the workforce. But when they talk about Bush's 3 million lost, they suddenly the number of people entering the workforce must be talked about.

Typical hypocrisy on their part.

dusty

Let's actually get to the REAL hart of this statement. Bush didn't lose any jobs. Clinton didn't create any. The tech bubble created jobs in the 90s. The bubble bursting in March/April 2000 started the job losses in motion.

The market collapse cost many people their life savings. Because of this, they cold not buy as many luxury items as they wanted, and as they could when their portfolio's were much higher. As a result, businesses were selling fewer goods. However, their forecasts were for pre-collapse. So for a couple months, they built stockpiles. As any industrial engineer can tell you, this is a disaster. Carrying excess inventory is the WORST thing for a business.

Eventually, the cost of carrying that inventor adds up, and therefore costs increase while the demand continues to drop because of the stock market. Hence, layoffs had to happen. These started in 2000. As a result of the layoffs, MORE people no longer could afford luxury items. This became a self feeding downward spiral. More layoffs, less demand, less profits, more layoffs, less demand, etc.

Once this occurred, there was no way to stop it immediately. It had to be slowed down slowly. And, in the beginning and middle of 2001, it wAS slowing down. Thanks to the first wave of tax relief.

And then 9/11 happened. And NOBODY could have prevented the loss of jobs resulting from the economy losing over a trillion dollars in one day.

The bottom line is, the President of the United States really does not affect the economy all that much. And not AT ALL in the short term. It takes at least a year for any results to show at all, and then it is slow building.

(My favorite are the moron liberals who blame Bush for the official start of the recession in MArch 2001. As if Bush even implemented a single economic policy in his first 6 weeks of office, let alone had time for those policies to affect the economy.)

Meredith

Okay, On a challenge from another website, I went looking for Employment and Unemployment Data since 2001. If you read it from that far back, Yes it appears that Bush created those jobs.

HOWEVER, if you go back 10 years you will see that it is a steadily growing trend.

Also If you look at the Unemployment trends... which is the Percentage of New Claims, mind you, You will see that when Bush took office, Unemployment started to rise, peaking in 2003.

The reality of the tax break is that the working middle-class got a retro-refund... But in reality have had to deal with an increase in taxes that no one is seeing.

Take my mother for instance... She has to have an additional $30 taken out of her check a week just so that she does not have to pay at the end of the fiscal year. She busts her ass working two jobs just to keep a rental apartment over her head...

I get paid BY-weekly and have 1/3 of my check taken out in taxes and insurance... Translate to Gross $800, Net $600. Every two weeks.

This is reality... Not someone's spin on numbers.

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