What Unemployment?

The vindication Bush partisans have been reveling in since growth for the third quarter came in at a whopping 7.2 percent has been somewhat marred by the ‘yes, but’ chorus of commentators asking where the jobs are now that the big picture looks rosy again. A fantastic growth rate in his corner doesn’t make the president look quite so invulnerable when the Democrats can still back up the charge they’ve been making all along: no one ever said the Bush economic plan wouldn’t make the rich richer, but it still leaves average Americans in the lurch.

But all this may in fact already be settled, if a new talking point now in development in right-wing magazines, blogs, and now the Heritage Foundation, gains widespread currency. It goes like this: you see, it turns out all those jobs, the ubiquitous ‘nearly 3 million lost since Bush took office,’ have actually been fully regained and then some. All that Democratic hand-wringing has been for naught, for in fact, a conspiracy of ignorance among economists in the federal government and around the country has been directing us to the wrong page.

The Bureau of Labor Statistics, which measures joblessness, actually uses two ways of measuring how many Americans are out of a job from month to month. The first, the Household survey, samples 60,000 households each month and records the employment status of individuals. The second, the Establishment survey, surveys 400,000 businesses each month and records information directly from a firm’s payroll. A funny thing has been happening for the past year, since around when the recession officially ended. The two measurements have been diverging drastically. While the establishment survey shows the well-known 2.79 million jobs lost figure, the household survey now shows steadily increasing gains, to where net loss since Bush took office is virtually zero.

How can this be? Beyond where each survey gets its information from and the size of the respective samples, there are some notable differences in what exactly each is measuring. The Establishment survey, for instance, only counts nonfarm jobs, thus not reflecting jobs lost or gained in the agricultural sector. Furthermore, it counts each job listed on a payroll as one ‘job’. Therefore, if you work at Wal Mart during the day and then hit the McDonalds graveyard shift, and then McDonalds lays you off, the Establishment survey counts that as a job loss, even though you still have a ‘job.’ Finally, the Establishment survey of course doesn’t reflect changes in all sorts of unreported labor, since it relies on payroll records.

The household survey on the other hand, since it focuses on an individual and not a payroll stub, reflects the fact that you are still gainfully employed at Wal Mart during the day, and that you are not struggling to make ends meet with the ranks of the unemployed, as the Establishment survey would have you believe. It also allows you to report if you are ‘self-employed’, thereby capturing the unreported, contract, and part time jobs that might not turn up on the Establishment survey. A further advantage of taking information directly from the individual is that the Household survey is able to reflect jobs gained by new business creation—the Establishment survey is slow to reflect new businesses.

Now, there is always a good argument to be made for discussing what the numbers we relentlessly quote actually mean, and especially in campaign season. But the conservatives can’t just leave it at that, admitting that this is a significant trend which we should use to qualify claims about job loss. The mendacious tick is far too deeply ingrained at this point to make a nuanced case for anything. Instead, the story is that job loss is a lie, a fallacy created by those liberal know it alls who lord over and distort both the information and the media that distributes it. Here lies the essence of ideology—the narrative, not the fact, is the thing.

Not that they can or will agree on the explanation for the instantaneous job recovery. Allan Meltzer at AEI had a column in the Journal where he chalked it all up to the new business loophole—lots of companies went under or laid off large numbers of workers in the recession, but these were all picked up by the roaring tide of new business creation, which as mentioned before, is slow to show up in the Establishment survey.

Looking at the big picture, we might ask whether 'wingers leave something to be desired by praising the kinds of jobs whose growth is attested to by the household survey’s rise. Those jobs being created in the ‘jobless’ recovery are decidedly temporary, contract, off the books jobs. This is the disturbing trend dominating the current labor picture. Jobs which expand the ranks of the working poor, do nothing to expand health insurance or other protections, and trap so many Americans in wage subsistence.

I have no doubt the fellas at the Heritage Foundation would accuse one of being 'picky' for 'harping' on that, just as being horrified at the mounting death toll in Iraq is so...negative.


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