August 23, 2004

WHERE DID AUSTRALOPITHECUS GO?:

Disparate Jobs Data Add Up to a Mystery (David Streitfeld, August 23, 2004, LA Times)

According to the government's regular survey of the nation's households, 629,000 people started work in July. But when the government asked companies how many jobs they had added to their payrolls, the answer was only 32,000.

If they're not working in a store, office or factory, what are those 597,000 other folks doing? Working as consultants? Selling bric-a-brac on EBay? Mowing their neighbors' lawns?

Or are they actually unemployed but so ashamed that they're lying about it?

"I can't tell you," said Tom Nardone, chief of the Division of Labor Force Statistics of the federal Bureau of Labor Statistics. "We just don't know why there's a difference between the surveys." [...]

These new workers resemble the dead in the movie "The Sixth Sense": Only some people can spot them.

Those catching a glimpse seem to be mostly Republicans. Vice President Dick Cheney, for instance, can see them clearly. They're freelancers, private contractors, people working at home. They're not on the roster of any corporation's human resources department but are prospering anyway.

They're people, for example, like his wife.

At an Aug. 11 campaign appearance in Missouri, the vice president said Lynne Cheney "does very well in terms of her own professional career and line of work, but she doesn't work for anybody…. If you're in business for yourself, if you've got your own small business and so forth, you don't get picked up by those other numbers."

The "other numbers," the corporate payrolls, have been slumping this summer.

That's an ominous sign for the reelection prospects of Cheney and President Bush. Whatever attention isn't being focused on Iraq is on the economy, which means jobs. Rising employment makes people feel secure. They know that if their own job doesn't work out, there are many more out there.

Calculating employment is a massive task. To estimate payroll levels, the Bureau of Labor Statistics queries 400,000 so-called work sites every month about their hiring activities.

Whether the reason is outsourcing to China and India, rising corporate healthcare costs, increased efficiencies from technology or just general queasiness, the work sites haven't been in a hiring mode for a long time. Since March 2001, two months after the Bush administration took office, company payrolls are down a cumulative 1.2 million.

But when the government asks 60,000 people directly about employment, as it also does every month, the jobs picture looks healthier. Although the 629,000 jump in July was unusually high, the cumulative increase in the household survey since March 2001 is 1.8 million jobs.


We try as hard as we can to fashion a dynamic economy, one premised on the long-term value of creative destruction, then we're perplexed when static measures don't make sense.

Posted by Orrin Judd at August 23, 2004 10:52 PM
Comments

Hopefully the August payroll survey out in early Sept will show strong job growth or the Dems will continue to harp on lack of jobs. I think the household survey may be catching workers the payroll survey isn't but the MSM doesn't seem to accept the household survey (and ignores the drop in the unemployment rate).

Posted by: AWW at August 24, 2004 12:00 AM

The employer survey doesn't capture new firms; they haven't had time to be drawn into the govt's sample yet. Thus the disparity in the two figures is due to the resurgence of entreprenuerial culture in the US, a wonderful development economically.

Posted by: Tom at August 24, 2004 8:10 AM

They ought to also be looking at the estimated tax forms submitted approximately each quarter.

Posted by: genecis at August 24, 2004 9:44 AM
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