Free Markets, Free People

job creation


Economic ignorance, thy name is Obama

I’m not sure how else to describe this statement from “the smartest man in the room” concerning the Keystone XL pipeline and unemployment benefits:

As Obama called for passage of those bills, he also responded to a recent Republican push to require him to approve the construction of the Keystone XL pipeline from Canada. "However many jobs might be generated by a Keystone pipeline," he said, "they’re going to be a lot fewer than the jobs that are created by extending the payroll tax cut and extending unemployment insurance."

It’s rather hard to even imagine someone thinking that’s true.  Yet here’s the guy who is supposed to be making jobs his focus and economic recovery his priority and he thinks he’s doing his job by trying to get unemployment insurance extended?  He believes that the extension of the payroll tax cut is job creator?   Note the word – create, as in what Obama said.  While it certainly can be argued that on some level it might save a few jobs, if there were any to be created from its extension, they’ve most likely already been created. 

The Keystone XL pipeline on the other hand, will create thousands and thousands of jobs.

TransCanada is poised to put 13,000 Americans to work to construct the pipeline – pipefitters, welders, mechanics, electricians, heavy equipment operators, among other jobs – in addition to 7,000 manufacturing jobs that would be created across the U.S.  Additionally, local businesses along the pipeline route will benefit from the 118,000 spin-off jobs Keystone XL will create through increased business for local goods and service providers.

Of course, besides the pure economic ignorance displayed by the statement, Mr. Obama offers nothing in terms of numbers to back his claim.  It’s another in a long line of claims made recently that just aren’t true.

~McQ

Twitter: @McQandO


More on those Texas jobs

In addition to what Bruce wrote below, I’d like to point you to Political Math’s analysis of Texas’ job performance. In this analysis, he takes the criticisms we’ve been hearing for the last two days and refutes them, point by point, using actual BLS statistical data. It’s a great job of analysis, with, like, charts, and stuff. They key takeaway:

My advice to anti-Perry advocates is this: Give up talking about Texas jobs. Texas is an incredible outlier among the states when it comes to jobs. Not only are they creating them, they’re creating ones with higher wages.

And he has the actual statistical work to back that claim up. For instance, here are two of the charts he presents, that I have superimposed to create a single chart showing the employment level in the US, compared to Texas. It’s most instructive:

TX vs US Unemployment

This single chart says a whole lot.

~
Dale Franks
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December Unemployment

The employment numbers from this morning are no cause for any sighs of relief, yet.  The number of persons employed increased faster than the increase in population–which seems to be unusually small compared to recent months.

In any event, according to my calculation method, this is where we stand (all numbers in thousands):

DECEMBER 2010
Civilian Non-Institutional Adult Population:
238,889
Average Labor Force Participation Rate: 66.2%
Proper Labor Force Size: 158,145
Actually employed: 139,206

UNEMPLOYMENT RATE: 13.6%

The labor force participation rate continues to decline, coming in at 64.3% this month, a 30-year low.  The actual size of the labor force was 153,690.  Using the historical average participation rate of 66.2%, that means the current labor force is running with about 4.45 million fewer workers than it should.

This month’s non-farm payroll increase of 103k new jobs is really just a drop in the bucket. We would need 11 million jobs created to get the unemployment rate back to 5%.  Even if there were no increase in population at all, we would need to create 300k new jobs per month for 37 months to get those 11 million jobs back. The only possible bright spot is that, this year, the first of the baby boomers hit 65 and begin retiring. So maybe the actual labor force participation rate is due to naturally drop, as is the size of the labor force.

All we have to do, then, is figure out how to pay social security to more retirees with a shrinking labor force.  That should be fun.


Wasserman Schultz – Obama creating more jobs than in entire Bush presidency (update)

Tis the season where absurd and wild claims are made (to be fair – by both sides) hoping they’ll hold up at least until the election has passed. Some, however, just are too off the wall and blow up immediately upon being uttered. An example is this claim by Democratic Congresswoman Debbie Wasserman Schultz:

“On the pace that we’re on with job creation in the last four months — if we continue on that pace — all the leading economists say it is likely that we will — we will have created more jobs in this year than in the entire Bush Presidency,” Wasserman Schultz, a Democrat from Weston, said on FOX News.

On its face, you immediately say –wait a minute, that can’t be true.  To make that claim, one has to ignore the jobs lost prior to the “last four months” and disregard the total jobs created during the Bush era.  Obviously the same process was going on during the Bush administration (job losses vs. job gains) which ended with a net positive.  Wasserman Schultz would like you to ignore the meaning of “net” and job loss numbers in favor of only focusing on the pace of job creation.  And I’m not sure she’s right about that.

As Veronique de Rugy points out over at NRO, while the jobs picture during the Bush administration was nothing to brag about, there’s no way that Wasserman Shultz’s claim has any credibility in the face of an economy that has shed almost 3 million jobs in the private sector during Obama’s presidency. 

In effect, it’s a shot at getting a meme started with low information voters hoping they’ll accept it at face value and it will influence their vote.  You have to love the “all the leading economists” appeal to authority she dropped in there.  But if you want hard numbers, well, forget it. 

They do exist however.  Instead of providing them (you can see them in de Rugy’s post at NRO), a graph will do a much better job of pointing out the absolute nonsense of the Wasserman Schultz claim.  While it is possible that more than 675,000 jobs created in the next 4 months somewhere, as we just saw with the latest numbers, the economy is still shedding jobs (95,000).  It is the net that counts – not just one side of the ledger. If you “create” 1,000,000 jobs but lose 2,000,000 during the same period, it’s a net loss.  And that’s what we continue to suffer right now.   So her’s is an empty and meaningless claim that is disingenuous because ignores the whole picture in a transparent attempt to drag the left’s favorite punching bag back into the argument.

 

image

While total employment rose slightly (675,000 net jobs) during the Bush presidency, most of it was government employment.  During the Obama presidency there’s been no overall growth of employment except slightly at the federal government level and no net increase.  What Wasserman Shultz wants you to ignore is the blue bar on the left and the negative net job numbers we continue to see.   If you do that, the claim sounds good.  If you don’t, then her claim is nonsense.  

Bottom line is Wasserman Schultz’s claim is selective statistical nonsense, but I expect to see it somewhere, sometime repeated as gospel. 

UPDATE: Dale sends along the Bureau of Labor Statistics spread sheet which shows:

  • From Jan 01 to Jan 09, a net of 1,080,000 jobs were created.
  • From Jan 09 to present, 3,348,000 jobs have been lost.
  • The low point in non-farm employment was Dec 09, when there were 129,588,000 payroll jobs
  • Since that low, 613,000 jobs have been created.
  • There are 580,000 fewer payroll jobs today than there were in January of 2000.

Make sure you understand that last line.  In a nation that has increased its population during the last 10 years, we have a net job loss of 580,000 jobs since 2000.

~McQ


Beware of the new Obama job creation claims

T

he NY Post reminds us that the Joe Biden/Christina Romer dog-and-pony show now currently touring and touting some amazing "magical" job creation numbers are the same crew that gave us other estimates of job creation in the past:

Last year, when they touted their jobs figures, they wound up backtracking — after it turned out that hundreds of jobs were included from congressional districts that didn’t even exist.

Biden later admitted the data were flawed, noting that "further updates and corrections are going to be needed."

Then he and Obama bragged about new job numbers for May — some 430,000 of them. Except that 411,000 were temporary, part-time positions created by the Census Bureau.

Now the claim is that somehow, despite the unemployment numbers, they’ve managed to “create” or “save” anywhere from 2.5 million to 3.6 million jobs with their excellent management of the financial and economic crisis.

Of course no one can put a finger on what jobs were “created” or, really, what jobs were “saved.”  Says Romer, apparently trying desperately to keep some shred of professional integrity in tact:

"There’s obviously a lot of uncertainty about any jobs estimate," Romer acknowledged.

Really?  That’s certainly true of the estimates this administration has put forth.  However, as the Post points out, the timing of this estimate is perfect.  This estimate shows an increase of 20% over the last estimate that was found to be based in fraudulent numbers.  As the Post notes, this estimate arrives just as Obama’s poll numbers are down.

All that anyone really needs to know is that this all started within the administration when it promised that the massive pork bill of nearly a trillion dollars it passed early in its tenure would keep the unemployment rate under 8%.  It didn’t.  In fact it didn’t even come close.  And the figure is now around 9.5% and shows no indication of falling anytime soon.  Where these magic jobs are and why they haven’t had any impact remains a mystery.

Of course the entire point is to understand that they can (and are) claim whatever they wish and it’s pretty hard to check.  But skeptics, like myself, aren’t going to be convinced by mere claims.  Hard numbers that can be checked and verified will have to follow.  And it is my contention that when they do, we’ll see a repeat of the previous two attempts at pulling the wool over the eyes of the America people for political reasons – something this administration shamelessly attempts pretty consistently on a number of fronts.

~McQ

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