John Kerry and John Edwards have done an outstanding job of exploiting and misrepresenting the differences between the two employment surveys that are performed by the government each month.
As an economist, I must say that the jobs debate that has been going on in our nation for the past two years has not only been frustrating to watch, but is a perfect illustration of why politicians at the national level should be required to have business degrees instead of jurisprudence doctorates. In fact, in America today, there are very few politicians who appear to possess even the most rudimentary grasp of what the average college student learns in his/her first freshman economics class.
Let’s look at this issue more specifically as it pertains to the rhetoric of job losses since President Bush was inaugurated. First off, the Left has done an outstanding job during this period of ignoring the inherent differences between the two employment surveys that are performed by the government each month whilst exploiting and misrepresenting those disparities as well as the public’s ignorance of them. Furthermore, the news media has totally failed the public in this regard by not only participating in the misinformation campaign, but also in neglecting to fulfill its rightful obligation to society — educating them on important issues of the day.
To be more precise without getting tediously technical, there are two surveys done each month to determine employment levels in our nation. The first is accomplished by the Bureau of Labor Statistics (BLS), and is referred to as the Establishment Survey. In this poll, 390,000 companies (establishments) are asked questions by either phone or mail to try to determine a fair estimate of all Americans who are presently employed by such companies and government offices. Concurrently, the Household Survey is performed each month by the Census Bureau in the form of telephone questionnaires to 50,000 residences in 792 different regions of the nation. In reality, both of these reports give economists and lawmakers valuable information about employment trends, wage issues, gender and race matters, etc.
The problem is that these surveys don’t always tell the same story, and the Left and their media minions for the past two years have continually focused the public’s attention on the most negative aspects of each of these reports whilst typically downplaying or totally ignoring the positive ones. As a result, regardless of the fact that the economy as measured by almost every conceivable statistic has been growing at a very brisk pace since the second quarter of 2003, the average American doesn’t feel that way. For instance, even though home ownership and prices are at the highest levels in American history, and the GDP in the twelve-month period between April 2003 and March 2004 grew at the fastest pace in twenty years, only 42% of people who feel that the economy is the top priority in this election believe that the President is doing a good job in this regard. Such was the determination of John Zogby in a recent poll wherein he concluded, “While the President and his team hoped that the economic turnaround would be to his benefit, it is clearly an albatross around his neck at this point in the campaign.”
Why the chasm between perception and reality? What are some of the differences that exist in these government reports that are being exploited by the Left to convince the electorate that things are actually worse than the facts dictate? Well, as a perfect example, the Establishment Survey in the most recent report released last Friday suggests that there are currently 874,000 fewer Americans on non-farm payrolls than in December of 2000 before President Bush was inaugurated. Of course, this was the headline statistic reported all weekend. However, the Household Survey in this same report claims that there are currently 1,848,000 MORE people employed today. As you would imagine, most news agencies neglected to convey this positive datum. Why do you think that might be?
Now, an inquiring mind might wonder why these reports are so different. Well, the Establishment Survey only includes people who are employed by companies or governments, and fails to address — as the Household Survey does — those who work for small businesses, or are self-employed, consultants, independent contractors, etc., etc. This is why the Establishment Survey is actually understating employment in our nation by about 8 million jobs. Let’s understand that people who are not included in the Establishment Survey, but ARE in the Household version, range from realtors, mortgage brokers, insurance salespeople, accountants, beauticians, manicurists — basically anybody who either works for themselves or a small business.
As a result of these disparities, it is extraordinarily disingenuous for Senators Kerry and Edwards to continually refer to job losses since Bush took office given the fact that one of the government surveys COMPLETELY refutes this assertion. Furthermore, and potentially more important, when Misters Kerry and Edwards talk about the declining employment numbers, they always do so by insinuating that the President “Lost Jobs.” Ever wonder where he lost them? Are all of these jobs hiding somewhere in that mysterious place in everyone’s dryer that lonely socks go?
Nowhere is this “Lost Jobs” discussion more intentionally misleading than as it pertains to manufacturing jobs and how many have been “lost” since President Bush took office. In fact, I sincerely wonder if Misters Kerry and Edwards have ANY clue that manufacturing jobs have been declining in our nation since June of 1979 when they peaked at 19,553,000. After hitting this all-time high, America lost almost 3 million such jobs in the next 3½ years, bringing this total to 16,702,000 by January of 1983. Today, this number is 14,384,000. As such, American businesses have been aggressively relocating manufacturing facilities outside of the country for more than 25 years. Unfortunately, the Democratic Presidential and Vice Presidential candidates seem to have conveniently “lost” this fact somewhere along the campaign trail, and continue to imply to the electorate that this phenomenon is President Bush’s fault.
Beyond this, it seems quite amazing that regardless of the number of times Misters Kerry and Edwards have referred to the President losing jobs, no responsible journalist has ever asked the candidates to address specifically what kinds of jobs were lost, and how this data might relate to either the attacks on 9/11 or the collapse of the Stock and Tech Bubbles. For instance, since December of 2000, 1,517,000 payroll jobs have been lost in the categories of: computer and electronics manufacturing (512,000); transportation equipment manufacturing (254,000); air transportation warehousing (119,000); telecommunications (297,000); information services such as ISPs, search portals, etc. (111,000); financial activities related to securities (45,000), and; computer systems design and support (179,000). As one would imagine, all seven of these employment categories were likely pummeled as a direct result of the Stock and Tech Bubbles bursting, as well as the attacks of 9/11. Furthermore, since December of 2000, there have been 328,000 job losses in the retail trade sector. How much of this payroll decline could be directly related to e-commerce and the explosion of Internet purchases? Certainly, it is not caused by a decline in retail sales, as this statistic is significantly higher today than in the year 2000, even if the public doesn’t believe it.
The bottom line here is that the American economy has been going through an extraordinary transformation in the past ten years with all the well-publicized technological advancements, the bursting of the Stock and Tech Bubbles, and the attacks of 9/11. Regardless of the thumping of politicians’ chests, there is only so much that fiscal and monetary policy can accomplish. Furthermore, irrespective of what governments might do, they cannot stem the tide of global economic forces. As such, it appears not only disingenuous, but almost unimaginably naive for a politician in the year 2004 to be discussing problems in the economy without specifically addressing what factors other than policy issues might be the cause. In reality, this is akin to a doctor suggesting to a patient who has just had a stroke that the culprit was his weight problem, without looking at all of the other internal physiological determinants that might have been responsible such as a blockage of the carotid artery.
The significance of all of this is that we as a nation are likely going through structural societal and economic changes that are just as sweeping and impactful as those that transpired at the end of World War II. As a result of the ramifications of these shifts, it appears to be the “wrong place and the wrong time” for our country to consider putting a couple of Senators in the Oval Office who not only appear to understand virtually none of the global economic issues that confront us, but are quite willing to lie to the American people about such matters just to gain the power they desire. Or, put a different way, it appears that these two Senators are quite guilty of economic malpractice, and that maybe Mr. Edwards’ law firm should be looking into suing them both for gross acts of negligence in this regard.
slep@danvillebc.com
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