Category Archives: unemployment

Romney, Obama, and Executive Job Records

This is one of the Goose/Gander Visualization Series.

Recently President Obama’s team has felt that attacking Romney’s jobs record in Massachusetts tests well in the sample group.

These attacks got me thinking about executive job records.  “Where” I asked myself  “would President Obama place in a ranking of US Presidents in terms of job creation?”

Job Gains By Presidential Tenure Medium

You can also download a larger version of the chart. I find it difficult to create visualizations that work well in both blog form and Facebook-sharing form. This was my attempt at a compromise.

Is this a fair comparison? Yes and no. Part of the Goose/Gander series is that I create a provocative visual and then explain in more details what is fair and isn’t fair about it.

This Isn’t Fair

President Obama hasn’t had a full term yet

This puts him at a distinct disadvantage to everyone else (except John F Kennedy) because he hasn’t had the same amount of time to grow jobs. However it also seems pretty obvious that he’s not going to get out of last place before January 2013. That would require 300K new jobs per month every month from now until then.

President Obama came into office in the middle of a recession

In fact, he came in the middle of a recession that was worse in terms of job loss than anything any other president in this chart had to deal with. Now, he did split those job losses about half-and-half with George W Bush, so it’s not as bad as it could have been for him.

Presidents only have a certain amount of control over job growth

Actually presidents (and executives in general) only have a certain amount of control over the economy, so this entire exercise is kind of tainted by that fact. But this is the part where we point out that Obama did start this by attacking Mitt Romney’s job record in a similar way.

This Is Fair

The data Is Unassailable

I’m using the Employment table from the BLS A Tables. This is not the one that most Obama proponents prefer to use. They prefer using the BLS B Tables because they give numbers that are kinder to Obama. But the B Tables undercount employment (they only count payrolls) and everyone knows this.

I counted January-January (or whenever the president left office) for each president. I did this not because it was particularly fair but because I wanted to match how Obama has assigned himself and Romney jobs responsibility. I’m following his lead to show that, if we take him at his word, he doesn’t stand up to his own standard.

If we’re going to play the presidential job visuals game…

… this is a totally fair visual to keep in mind. Depending on the metric, Obama talks about jobs in different ways. When talking raw numbers, he likes to talk about the “last 22 months” or however gets us to the low point in the recession. When talking about month-to-month change, he likes to talk about when he came into office which was the worst point of job loss in the recession, so everything else looks good in comparison.

Fairly or unfairly, Presidents and jobs are commonly linked. It’s only fair to give a proper representation of that information.

Is the Labor Force Shrinking Due to Boomer Retirement? (Not Mostly)

Every month when the BLS releases the employment report, I dig into the data and tweet about it at length using the hashtag #BLSFriday. (Follow me on Twitter to catch this incredibly exciting data dive. The next one is on June 1st.)

If you’ve been following the job numbers closely, you’ll know that this recession we’ve seen a particularly sharp drop in labor force participation. Labor force participation measures how many people either have a job or are looking for a job as a percentage of the population. As of March 2012 labor force participation has dropped to 63.6%, the lowest point since December 1981.

Because the unemployment rate doesn’t measure people who aren’t in the Labor Force, many (especially conservatives) have noted that the unemployment rate is “artificially” low and that many have left the labor force, basically giving up even looking for a job.

One Twitter friend, @rizzuhjj, pointed out that the Chicago Fed has a paper that claims that half of the post-1999 decline in the labor force is due to long-term demographic trends, specifically, Baby Boomers aging.

Here is a chart of the labor force participation rate since it the last time it was this low. You can see that we’re at the point where Boomers are starting to retire, so surely that would be driving the massive drop in labor force participation and not due to the recession, right?

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To test this, I decided to sift through the employment data by age, as provided by the BLS. In January 2008, the participation rate by age looked like this (click to enlarge).

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(The outline is a rough approximation of where Baby Boomers land in the data. Which is OK because the Baby Boomers are an approximate age group anyway.)

You can see that the boomers are largely entering the age ranges where participation in the labor force drops off significantly. So, on the surface, this explanation makes sense.

This was my test: Take the participation rates for post-Baby Boomers (16-49 year old) and multiply them for the corresponding populations for those ages. That way we’ve isolated just the post-Baby Boomer labor force and can see if it is smaller now than it was 3 years ago. This is what I found.

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Or, to make it a little clearer, this is the change in labor force participation by age since January 2008.

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Apply the January 2008 participation rates to current population and this means we are missing 3.4 million post-Baby Boom workers from the labor force. These post-Boomers account for 68% of the “missing” work force.

If labor force participation was dropping only due to Baby Boomer retirement, the rate should have dropped from 66.2% in January 2008 to 64.8% today. Instead, it is 63.6%. There is certainly a good deal of room for improvement to get younger people back into the labor force. We shouldn’t simply push the problem off to being Boomer retirement or we risk ignoring a whole generation that is unemployed and flying under the radar.

How To Read Unemployment Reports

Every time a national unemployment report comes out, I tweet the many details from @politicalmath. Frequently I get a lot of the same questions, so I thought I’d jot down a quick summary on unemployment reports and numbers and where they come from.

There are 2 kinds of employment numbers, summarized here:

  1. Establishment Data (Current Employment Statistics or CES) – this survey covers 400,000 businesses and counts the number of payroll positions that are filled.
  2. Household Data (Current Population Survey or CPS) – this survey covers 60,000 households and counts the number of people who are employed and unemployed.

When an employment report comes out from the Bureau of Labor Statistics (BLS), they usually report:

  1. The unemployment rate, which is calculated using household data
  2. The number of jobs added, which comes from the establishment data

Sometimes this data can seem contradictory. For example, between March and  June 2011, we gained 290,000 jobs but the unemployment rate went up .4% (from 8.8% to 9.2%).

There can be a couple reasons for this. The first one is that, the “jobs added” number comes from subtracting last month’s establishment jobs number from this month’s establishment jobs number, but we never use either of those numbers to calculate the unemployment data.

Why?

Because the essence of the establishment jobs number is asking employers: “How many people work for you?” It gives a nice accurate number, but it doesn’t tell us anything about how many people don’t work for them. We don’t have any number on the unemployed, only a number for jobs.

For unemployment, we have to go to individuals and ask them: “Are you employed or unemployed?” Then we take the unemployed number and divide it by the total number of people who are in the labor force, which counts both the employed and the unemployed.

But even the differences between the establishment jobs number and the household jobs number can be big. According to the household jobs number (which is supposed to exclude farm workers and the self-employed), we had 139.6 million jobs in August 2011. According to the establishment jobs number, we had 131.1 million.

That’s a difference of 8.5 million jobs, and that kind pf spread is pretty normal. The variation changes a little month-to-month, but we could get a report of  jobs created from the household number and jobs lost from the establishment number. In fact, we saw something similar in August where the household number said we gained 331,000 jobs, but the establishment number said we gained 0.

So why is the establishment number reported?

Because the establishment survey is so much larger, more reliable and gives more consistent results. In the graph below , we can see that even though the establishment data counts fewer jobs, it is a less erratic count.

So… that is a quick explanation of the employment report. I dig into this data once a month, so I’m pretty familiar and I’m delighted to answer questions or explain in greater detail in the comments.