FINALLY, a confession!
I’ve been writing in this column for years that the way the Labor Department calculates the number of jobs in this country is deceptive.
In 11 of the 12 months, the government adds massive numbers of jobs — sometimes more than 100,000 — that it thinks, but can’t prove, exist.
This is because the Labor Department uses something called the birth/death model, which assumes that no matter how bad the economy is, there are itty-bitty, newly-formed companies — which can’t be reached by government surveyors — that are creating jobs.
I’ve said that this assumption is ridiculous — that these companies probably don’t exist. And non-existent companies can’t create jobs.
Not only is the public fooled by this practice, but policymakers are being led astray. So the Labor Department, essentially, lied again when it reported last Friday that only 263,000 jobs disappeared from the economy during September.
As shocking as that figure was, the more truthful number was actually worse because there were 34,000 of these phantom birth/death jobs included in the count. Nearly 1 million of these non-existent jobs have been added to the government’s count since the beginning
of 2009, mostly this past spring.
As I’ve said before, these bogus jobs are what caused the employment numbers to look slightly better in March, April, May and June, and created the notion that the economy was somehow on the mend.
Right after Friday’s report came out, Bloomberg News called Chris Manning, the national benchmark branch chief at the Labor Department’s Bureau of Labor Statistics, and asked about the 34,000 probably non-existent jobs.
“In this period of steep job losses, the birth/death model didn’t work as well as it usually does,” Manning told Bloomberg. “To the extent that there was an overstatement in the birth/death model, that is likely to still be there.” No freakin’ kidding! This year alone, this model has added over 700,000 jobs that don’t exist to the government’s count.
The Labor Department is not only still using this model, but it nearly doubled the number of phantom jobs for this September compared with the same month last year.
Bloomberg was the only media outlet listening when this column started broadcasting the errors of the monthly job figures.
And while this glitch in the jobs report is now hot stuff in Wall Street circles, no other news organization has even bothered to look into this use of statistical razzmatazz.
Now that I’ve gotten that off my chest, let me tell you what’s next.
Over the next few months the birth/death model will be kinder and the monthly jobs report should be helped by these silly assumptions.
Then, on Friday, Feb 5., Labor will report the number of job losses for the month of January.
This is the one month in every year that the birth/death model removes jobs from the economy — lots of them.
Unless someone fixes the government’s broken system for guessing at job growth, that figure will be disturbingly bad.
And the entire discussion about the depth of this recession will turn especially glum early next year.
Mark down that date — Feb. 5! It should be a real sad affair.
More great stuff @ New York PostRead Full Post | Make a Comment ( 1 so far )
By S.A. Miller
Delivering on President Obama’s promise to boost the labor movement, the administration has announced a $35 million federal construction project in New Hampshire that requires union representation for the workers and forces nonunion employees to pay dues and contribute to a union pension fund.
Mr. Obama issued an executive order in the first weeks of his presidency that would make the requirement, known as a “project labor agreement” or PLA, the norm for all government contracts on large-scale construction jobs. The order is under review and a final rule is not expected for months, but that did not stop the Labor Department from rushing to use a PLA to build its new Job Corps Center in Manchester, N.H.
The PLA executive order replaced a Bush administration order that discouraged the use of such agreements.
It was one in a series of early policy moves by Mr. Obama that has dramatically improved the unions’ fortunes, though the president has not delivered on labor’s top legislative priority, the so-called “card-check” bill that would make it easier to organize workplaces.
Critics say imposing the union-friendly rules on the New Hampshire job – the first federal construction contract with such stipulations since President Clinton was in office – will drive up costs, delay the project and force most of the workers to pay union dues and pension contributions for which they likely will never receive benefits.
North Branch Construction, a Concord, N.H.-based general contractor and member of the business group Associated Builders and Contractors (ABC), filed a bid protest this week with the Government Accountability Office, claiming the PLA “unduly restricts competition.”
“PLAs are special-interest handouts that deny taxpayers the accountability they deserve from government contracts,” said Ken Holmes, president of North Branch Construction.
Sen. Judd Gregg, New Hampshire Republican, said the scarcity of local unionized workers and a separate requirement that contractors must have completed three previous successful PLA projects to qualify to bid will essentially prevent local firms from competing for the Manchester project.
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Another month under President Obama, another 263,000 jobs lost. It was not supposed to be this way. Barack Obama promised America that, if elected President and given control over the nation’s economic policies, he would create 3.5 million jobs, beginning with the enactment of a massive economic stimulus package. Today’s release of dismal employment figures by the Department of Labor show that the nation is still waiting.
So far in his term in office, employment has dropped by about 3.4 million jobs, while the unemployment rate has hit 9.8 percent, the highest in 26 years. The President repeatedly pledged to create 3.5 million new jobs by the end of 2010. He has also repeatedly emphasized accountability and measuring his presidency by results. The President’s jobs promise means total employment should be at least 138.6 million by 2010, leaving him with a total deficit to close that now stands at 7.6 million jobs. By his own standard, these results attest that Obama’s policies have so far failed to deliver.
Fortunately, the economy’s natural recuperative powers spurred by powerful, effective stimulus from the Federal Reserve mean the recession may be ending in the sense that overall output and incomes are stabilizing and the recovery may be on the horizon. Even so, job losses are likely to continue until the recovery accelerates markedly, perhaps sometime in 2010 or even 2011. Meanwhile, the President’s policies—such as unprecedented spending-driven deficits and threatened massive tax and regulatory increases—will continue to put downward pressure on employment rather than help to reach his jobs target.
Promises, Promises, and the
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By Christopher S. Rugaber, AP Economics Writer
Unemployment rate rises to 9.8 percent in September, as employers cut 263,000 jobs
WASHINGTON (AP) — The U.S. unemployment rate rose to 9.8 percent in September, the highest since June 1983, as employers cut far more jobs than expected.
The report shows that the worst recession since the 1930s is still inflicting widespread pain and underscores one of the biggest threats to the nascent economic recovery: that consumers, worried about job losses and stagnant wages, will restrain spending. Consumer spending accounts for about 70 percent of America’s economy.
Most analysts expect the economy to continue to improve, but at a slow, uneven pace. Government stimulus efforts, such as the Cash for Clunkers auto rebates, likely boosted the economy in the July-September quarter, but economists worry that growth will slow once the impact of such programs fades.
“Consumers … are going to struggle to increase their income,” said Brian Fabbri, North American chief economist for BNP Paribas. “If they’re struggling, they’re not consuming. That just takes some of the legs out of recovery.”
The Labor Department said Friday that the U.S. economy lost a net total of 263,000 jobs last month, from a downwardly revised 201,000 in August. That’s worse than Wall Street economists’ expectations of 180,000 job losses, according to a survey by Thomson Reuters.
The unemployment rate rose from 9.7 percent in August, matching expectations.
If laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the unemployment rate rose to 17 percent, the highest on records dating from 1994.
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Yesterday, Rep. Mark Kirk offered a great illustration of the relationship between ACORN and SEIU. A part of that chart is worthy of a further look: The relatively unknown story of how SEIU and ACORN took their act from Illinois Southward to mess with Texas and allegedly threatened to kill one man’s business because he wouldn’t toe the union line.
Most people know that unions haven’t done as well in the South as in industrialized (and economically troubled) Northern states such as Illinois and Michigan. So, in 2006 SEIU decided it would bring its brand of “justice for janitors” to Houston to set up a new foothold in the South.
First, SEIU set up a swank new office in a bank building and budgeted $1 million to organize Houston janitors. Then it took to the city streets, disrupting traffic and drawing the ire of Houstonians. A local judge even sentenced out-of-state SEIU protesters for their actions.
Eventually, they got several big janitorial companies to cave to a card check organizing campaign. But one man, Brent Southwell of Professional Janitorial Services, said it wasn’t his choice of whether his employees joined the union– it was his employees’ choice.
That’s when the union turned goonion. In addition to setting up the notorious inflatable union rat that unions love, SEIU took to contacting Southwell’s clients and protesting outside buildings. The Wall Street Journal reported:
Among other things, the union sent letters to Houston building owners, questioning whether Mr. Southwell’s workers were paid fairly and urging them to reconsider their business relationship with his company. A Labor Department investigation — the department wouldn’t comment on the reason for the probe — didn’t find any wage violations. Still, the letters and leafleting continued, and Mr. Southwell sued the union, saying its tactics amounted to defamation. Mark Jodon, a lawyer for Mr. Southwell, contends that his company will lose nearly $10 million from the loss of 14 existing and five prospective accounts with building owners.
But here’s what no one else has mentioned: The allegation contained a bombshell. The suit says a top SEIU organizer “has stated directly to PJS that SEIU wants ‘to kill’ PJS.”
Imagine a union threatening to come “kill” your company because it didn’t want you to have the choice to choose a secret ballot. No wonder they’re spending so much time and money trying to pass the Employee Free Choice Act, which would effectively eliminate secret ballots altogether.
Mr Southwell’s suit against SEIU continues. Read More at Big Government.comRead Full Post | Make a Comment ( 4 so far )
in 2000, when President Barack Obama
Summary: Who is Hilda Solis- Obama’s nominee to be the next Secretary of Labor? Organized labor is delighted because they know one thing for certain: She’s no Elaine Chao.
Who is Hilda Solis, Barack was mounting his ultimately unsuccessful bid for a congressional seat in Illinois, another state senator, Hilda Solis of California, also challenged a sitting incumbent in a Democratic congressional primary. Unlike Obama, she won overwhelmingly. Initially, Solis was seen as an underdog in her race against the veteran of the U.S. House of Representatives, Representative
Matthew Martinez, who had served the district spanning East Los Angeles and the SanGabriel Valley for 18 years. But he became vulnerable by disappointing the unions, especially with his vote in favor of the North American Free Trade Agreement.
Solis, who was approaching her term limit in the California state senate, decided to challenge him, encouraged by her union allies who she regularly sided with during her time in the California statehouse. Unions not only
pumped money into her campaign, but they staffed her office with 260 volunteers who made telephone calls and knocked on doors on her behalf – and she won the primary by a lopsided 69 to 31 percent margin.
Read more about Hilda Solis at Capital Research CenterRead Full Post | Make a Comment ( None so far )