April 18, 2024

Economix Blog: A Lift for the Worst Off

The American economy may be starting to help some of those who need it the most.



Notions on high and low finance.

The overall unemployment rate fell in September to 7.8 percent from 8.1 percent a month earlier. But the really impressive figures were in the categories of people who have suffered the most.

The jobless rate among people with college degrees was unchanged at 4.1 percent. But the rate among high school dropouts fell to 11.3 percent, the lowest figure for that group in nearly four years. It has declined by 1.4 percentage points over the last two months.

Similarly, the number of people who have been out of work for more than six months fell below five million for the first time since mid-2009. It peaked at 6.7 million in the spring of 2010.

None of those numbers are good, but they show real improvement, even if we should remember the household survey, on which the unemployment numbers are based, can be volatile. And the establishment report found 114,000 jobs were added during the month, in sharp contrast to the 873,000 additional people with jobs found in the household survey.

How can that be? The Obama haters are already screaming that the unemployment figure must have been manipulated. Jack Welch, the former General Electric chief executive, said on Twitter that “these Chicago guys” can’t debate, “so they change numbers.”

The two surveys often diverge. One is of employers, who are asked how many workers they have. The other is of households, who are asked which members of their households are working. If both surveys were perfect, there would still be differences, as self-employed people get counted in the household survey but not the other one, and people with two jobs get counted twice in the employer survey. Over time, however, they tend to even out.

A year ago, the the establishment numbers were looking better than the household numbers. Now the reverse is true. Over the last 12 months, the household report shows an additional 2.9 million people working. Over the same span, the establishment report says 1.8 million jobs were added, although the Labor Department has already said that figure would be revised upward in due course.

Over the last 24 months, however, the two reports are virtually identical, showing an additional 3.6 million jobs and workers.

You have to wonder why, if the Obama administration were going to fake numbers, it would choose the less-widely watched household survey. And you have to wonder why anyone would think the bureaucrats in the Bureau of Labor Statistics would follow such orders without any leaks from whistle-blowers.

Actually, it should come as no surprise that Mr. Welch would think bureaucrats would willingly change numbers. That evidently used to happen routinely at G.E. As I wrote in a 2009 column quoting James Martin, a Jesuit priest who found his calling after graduating from the Wharton School and working at G.E. in the early 1980s:

“The primary task of my first job was to issue very long, monthly statistical reports,” he wrote in his book, “In Good Company: The Fast Track From the Corporate World to Poverty, Chastity and Obedience.” “The first month,” he recalled, “I informed one executive that our results were coming in low” because of losses in overseas operations.

“So what?” replied the executive. “Just reverse a few journal entries.” Corporate headquarters, he explained, would come down hard on them if they missed the numbers.

Another boss told him he was “taking those accounting courses way too seriously.”

Article source: http://economix.blogs.nytimes.com/2012/10/05/good-news-for-the-worst-off/?partner=rss&emc=rss

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