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About all of those lost jobs

terpfan1980

Join Date 08/2004

+13

About all of those lost jobs

maybe some folks should demand a recount of employment stats

From a Commentary in The Washington Times

Link follows: Revising the job count
By Alfred Tella -- (Alfred Tella is former Georgetown University research professor of economics.)

...
How much do the data revisions change the initially reported job count, and do the changes have economic significance?
The short-term revisions in total payrolls, i.e., the revisions in the two months following the first preliminary estimate, vary considerably in size and sometimes tell a different story from initial estimates. The initially reported increases in payroll jobs for July and August were revised upward after two months by more than 50,000 each month, and the first September revision raised that month's initially reported gain by 43,000.
Each of the first four months of this year show a similar understatement of job growth. Comparing the initial estimates of job change with the estimates reported two months later for January through April shows initially reported monthly increases were underestimated on average by about 50,000 jobs. Looking at the current job recovery, which started in September 2003, both the preliminary and revised data show the same turning point, and the short-term revisions to the jobs data do not alter the initially reported direction of any month-to-month change. However, the data show the initial estimates understated job growth in most months of the recovery. Only October 2003 and May and June of this year were overestimated, though the average monthly understatement during the recovery exceeded the average overstatement. Underestimates occurred both when the initial increases were large and when they were small. As more employer payroll reports came in, the job picture brightened.
Recently the BLS reported a preliminary estimate of the annual benchmark revision that will be released in February 2005. Nonfarm payroll jobs for March 2004 and subsequent months are expected to be revised upward by about 236,000, with the prior 11 months also adjusted upward on a graduated scale. Considering there was an underestimate in the initially reported level of jobs in the first few months of this year based on short-term revisions, this implies a significant overall initial understatement.
In 2006, the BLS will publish benchmark revisions for 2005, which will result in further revisions in the jobs data back to April 2004.
Continuing jobs data revisions are inevitable and are evidence of the BLS's heroic efforts to constantly improve. But it would help if the lead-off statement about the latest job number in the monthly BLS press release used the word preliminary. Every month the media highlight the latest job change without proper caveat, and later revisions, which are sometimes much later, are often back-paged or ignored. The press and TV commentators would do well to hang a sign on their computers quoting the wisdom of Seneca.

About all of those "lost" jobs during the Bush administration, would some folks care to discuss the issue now based on real numbers and not underestimated preliminary data that was being used to poo-poo the economy?

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Daiwa

Join Date 07/2001

+351

If we had used the money from the tax cuts for the wealthy to rebuild America it would have created jobs, profits and demand while rebuilding things that must be replaced. That would have been far more effective than giving the top 2% half the tax cuts.

It's remarkable how this broken record just keeps playing & playing.

Cheers,
Daiwa

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Daiwa

Truth has a way of not going away. This is some truth!

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Daiwa

Join Date 07/2001

+351

I respect your opinion, COL Gene, but we'll just have to agree to disagree.

Have a Happy Thanksgiving.

Cheers,
Daiwa

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Terp

I put an ad in the paper a couple of months for an entry level desktop support person. I got 47 applicants in 2 days. Of those applicants, 22 had ten years or more experience. I made numerous phone calls to these people letting them know it was an entry level position and that the salary would be below 30K - only a handful cared. One told me he's been working in the mall since 2002 and couldn't bear the idea of another Christmas in the mall. Another told me he had 4 kids and that as long as it had benefit he'd be able to quit dipping into his savings. Most of the applicants had lost heir job more than 2 years ago and were no longer eligible for Unemployment, and were working at Sears, nail salons, or pizza shops, making les than half of what they did before. It was one of the most gut wrenching periods of my life. To make matter worse, a sudden slowdown in our production made our owners decide to hire a temp instead; just to be sure the economy remained stable before committing to a payroll position.

My wife got laid off in April. She was an executive assistant for the VP of IT of a large Telecommunications company. He was also laid off. We juggled a few things, I sold my brand new car, and bought an old beater truck, we cut back all over the place because she knew she couldn't make what she was making (with 10 years in) at that company, the few offers she got were about half of what she made. He's not "working" either; he's doing real estate brokering or something. Most of the people she worked with are still scrambling to find jobs that paid what they made. A few have started their own companies.

This brings me to my favorite campaign BS small business owners and the tax repeal. The average Small Business Owner does not make 200K a year. A lot of small business owners own farms, and make much less than 200K the rest of the majority are Mom and pop shops, internet companies, and convenience stores. The next time you go out to the local pizza place (not Pizza Hut) look at the guy behind the counter; do you think he's making 200K? My mother owned a small business for 15 years, she was lucky to make 35K. My step father owned one he barely broke even. They belonged to small business associations, and no-one there made 200K. The republicanized small business owners . . . and this is what Kerry was trying to say, but failed miserably (remember "want some wood?") getting across, is anyone that includes schedule C income. That's includes celebrities that claim speaking engagements, and executives that rent out their cabins and summer homes, whose main source of income remains their salary that puts them over the 200K mark. Link

This is the real world my friend, not academia, Alfred Tella, interprets at the statistics in a very "half full" manner. You can spin the numbers anyway you want, but the job market still sucks. Ask anyone in it, there are lots of them around.

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Reply #28 By: Daiwa - 11/24/2004 7:07:13 PM
I respect your opinion, COL Gene, but we'll just have to agree to disagree.

It is nice that someone respects it I guess....

I really don't like feeding trolls myself, so I'll let it go at that.

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Reply #29 By: Cappy1507 - 11/24/2004 8:00:09 PM

Very insightful post Cappy.

Now, some personal history from me.

I lost my own job back in 2001. It took me approximately 3 weeks to find a new one, and 4 weeks to start on it.

Before losing that job, I had been travelling for work, and had rolled up expenses that totalled many times what I would normally make in a month. It snowballed on me to the point that even with a fairly generous severance package, I had to eventually dip into the 401-K that I had already had a loan out on. Admittedly I was living above my means, because like many others, we looked at the economy and felt that it would continue to roll. Even when I personally looked at it and doubted it -- and saw that there was too much speculation going on in the market -- I let myself go with the flow.

Thankfully, I had a good work history, and I landed a decent job that turned out to be just about perfect for me. My benefits remained very close to what they were before. My salary didn't change, and my work location changed to one that was much more convenient for me. Dumb luck, I know.

With that said, I was full well ready to take any job myself. I would have busted my butt to make an income to take care of myself and my family. You see, I'm primarily a single earner for my household, and I work my tail off now, just as I always have.

My family is similar to yours. My mother runs a small antiques and knick knacks shop in Southern Maryland. She does "ok" at it, but she's been hit hard in the last few years, and knows that business isn't the same.

I've discussed and argued with her (she is a staunch Democrat) that things are getting better, but she doesn't see it. Many people in this area are doing well. Unemployment rates in the D.C. metro area remain at reasonable levels. People that have security clearances can still demand great compensation and can pick up a job almost immediately (though you can't get such a job if you are not already cleared, and can't get a clearance without having an employer sponsor you to get it, or without being in the military to get it). There is money in this area, and in many other areas, but people are now making themselves house poor. They're paying fortunes for real estate because rates are at historic lows and they have convinced themselves (and the banks) that they can afford these huge payments. Never mind that they can't afford furnishings for the home, or food for their tables (actually they can, they just eat mac & cheese), and eschew going out to eat, which in turn harms the economy as they aren't eating out and paying the restaurants which employ hospitality workers (wait staff, cooks, bus people, managers, cashiers, etc.). Owning a home has become so important, that come hell or high water, these folks will do that, and put themselves at risk of financial ruin.

I've told my mom that I expect things will start to improve rapidly now, and I really do. During the last few years, we had accounting tricks done to us by having tax refunds prepaid to us. When we would traditionally have gotten tax refunds, we got notice that we'd already been paid, and we had to remind ourselves that we'd already spent the money.

This year, yet again, the Bush Tax cuts will improve the situation again, as more of the original cuts take effect, and more people find extra money in their pockets in April and May. When that money hits the economy, it will do as it did back in 2001, and later, and will boost the economy through consumer spending. When that happens, we're going to need even more employees to help the customers that out spending that money. We'll need more people to help in every segment of business along the way.

Things are getting better, and the glass is at least half full, even though you are certainly correct with the anecdotal evidence of pockets of the economy and the job market that need improvement.

But, to be clear, a lot of the problems that existed in the market that led to the situations you describe came from an economy that was truly over-heated back in the late 90's, with people that had absolutely no experience (but did have paper from some college or university somewhere) walking into jobs at places like Enron, WorldCom, PSI Net, Digex, Sprint and other places and finding themselves paid better than workers that had even more experience than you mention in your comment. (I know that it happened, as it certainly happened around me). Wages went nuts with employers overpaying for labor so badly that it's taken the last several years to really start to correct itself in the market place.

Wages may be "flat", but as noted in Daiwa's reply #23, it is a normal part of the process of letting the market correct itself, and letting the employment situation come back to normal.

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Daiwa

Join Date 07/2001

+351

Insightful to terpfan.

In addition, any economic recovery is uneven. Some sectors of the economy will recover quicker than others, some won't recover at all, some will fail and disappear, and some new sectors that previously didn't exist will materialize out of apparent thin air.

Cheers,
Daiwa

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In addition, any economic recovery is uneven. Some sectors of the economy will recover quicker than others, some won't recover at all, some will fail and disappear, and some new sectors that previously didn't exist will materialize out of apparent thin air.

A good example is here, where I live, the unemployment rate is 3.1%. Link The average wages have also went up 6.5% last year alone.

Anybody want to move to Reno?

Sorry to gloat guys.

Maybe old Mike Moore should hire moving companies to move some of those poor Flint Michagin families to Reno, with all that money he made off of them . But I'm sure he wouldn't do that, will he?

That's My Two Cents

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