Jobs - Lies, Damn Lies, and Statistics
Back in February, we were treated to George Bush's Council of Economic Advisers predicting in its annual economic report that 2.6 million jobs would be created this year. Less than a week later, the junta leadership was in full retreat from these numbers. But like most pablum being served up by Ministry of Trvth, what sticks? The wildly optimistic prediction. The retraction gets precious little notice.
What's the real deal on jobs? 99% of the population hears, "5.6% unemployment rate, steady or declining". There's no context attached to unemployment rate numbers, and official unemployment rate statistics do not tell a complete story. Let me start with the Economic Policy Institute's breakdown of the numbers - it's not pretty and it's getting worse. You can download EPI's complete labor slump Powerpoint presentation yourself -- but let me summarize a few key stats:
- The rise in longterm unemployment is at a nearly historic high - almost 20 weeks.
- Pay gains have slowed (can you hear every working person doing the Homer Simpson dope slap? D'oh!) - 1.6% vs 1.9% rate of inflation. EPI cites even lower pay gains for low and middle income workers.
- The U.S. needs to be creating a minimum of 137,000 jobs / month just to keep up with new workers coming into the workforce. We're not even close.
EPI concludes that the labor slump problem was not created by external events such as 9/11, but rather, by bad policy. (As a sidenote, I think the EPI invoking 9/11 in their conclusion is rather specious, since I was laid off directly as a result of my company losing a contract when one of the WTC area companies was shutdown. I'm not disagreeing with their conclusion, I'm just sayin'...)
Today, the Institute for Supply Management issued it's March Manufacturing report. While the ISM put nice-sticky-candy words on their statistics ("employment index grows"), the reality is a bit different: the ISM employment index declined between December 2003 and January, increased a bit from January to February, and then registered a more modest increase from February to March. While I'm not an economist, to the untrained eye it sure looks like ISM's employment index flattened out.
But then, that's why I titled this piece "Lies, Damn Lies, and Statistics". Do a google, and you'll find so many variations on employment and economic stats, it'll make your head spin. You can find virtually any stat that will validate any preconceived notion that you may hold. What maybe concerns me the most is EPI's conclusion that with 1.6% raise in real wages in the past year, for the first time in 40 years, America's standard of living is on the decline.
My own barometer of jobs and the economy is very simple. Late last year, I started noticing the length of the line at the food bank in my town. The food bank is open on Saturdays, from 11 until 4, and the line now snakes down the block. Whatever food is available does not last until closing. I don't know that the food bank is yet turning away people in need, but certainly, they're rationing food distributions.
I'm looking forward to BushCo's numbers tomorrow.