Sept. 3, 2004 — Q: The Bush administration keeps quoting how they've created 1.2 million jobs (in the last 10 months, I believe). And, the media keeps reporting a net job loss of about the same amount.
However, from everything I've read, America has approximately between 130,000 to 150,000 people entering the work force each month. Bush has been in office from January 2001 till now. That's 42 months or 5.46 million. If Bush has created 1.2 million jobs, isn't the net loss the difference in those two numbers and should be 4.26 million?
Are my calculations sound or am I way off here?
— John, Egg Harbor Township, N.J.
A: The nice thing about statistics is that, by choosing the right numbers, you can make them say just about anything you want.
The Bush administration is correct in saying that it has created more than a million jobs (1.7 million, in fact) in the last 12 months. And Democrats are correct in saying that 1.1 million jobs have been lost since Bush took office. How can they both be right?
The answer is that the job market, while improving, still hasn’t made up for the jobs lost during the worst of the latest recession. Here are the numbers: when Bush took office in January 2001, total non-farm employment stood at 132.4 million. By August 2003, that number had shrunk to 129.8 million, a loss of about 2.6 million jobs. Since then, job growth picked up, raising the jobs number to 131.5, a gain of 1.7 million. (By contrast, during the eight years Clinton was in office, the economy produced something like 22.7 million jobs — or about 2.8 million jobs per year on average.)
Those numbers mask a huge churn of jobs moving from one part of the economy to another. Last year, some 30 million U.S. jobs were created — about 24 million from companies that expanded their payrolls and the rest from newly-created companies. But those gains were offset by the loss of 30.2 million jobs — from layoffs and companies going out of business.
Meanwhile, the labor force, as you point out, has been steadily growing — on average by about 90,000 workers every month since Bush took office. But there weren’t enough jobs to go around for all those new workers. That’s why the unemployment rate went up — from 4.2 percent when Bush took office to a peak of 6.3 percent last June. Since then, the unemployment rate has fallen to 5.4 percent, thanks to all those new jobs created in the past 10 months. So your math isn’t far off. But it’s not really accurate to say that those unemployed people represent jobs lost. Since they were new to the work force, they didn’t have a job to begin with.
Before you all take these statistics to the next political rally to support your favorite candidate, keep in mind that these are only estimates. And it’s worth noting that even though the folks at the Bureau of Labor Statistics take two separate monthly surveys, the numbers don’t add up. The data from the household survey — obtained by calling people up at home and asking them if they have a job — don’t match the payroll survey of employers. (Because the payroll survey covers more jobs, it’s generally considered more accurate of the two surveys, so those are the numbers we’ve used here.)
Q: There is a widespread belief in N.J. that our reported unemployment rate, recently said to be 4.9 percent in a mailout from our governor, is considerably below the true value. One reason is said to be that when your unemployment benefits run out after 6 months, you are no longer considered unemployed. This sounds ludicrous, but the story is repeated by word-of-mouth so frequently that I wanted to get to the bottom of it. I would also appreciate your comments regarding how this rate calculation is handled in other states. I am currently unemployed and this issue is near and dear to my heart. I see far too many men driving around and jogging during the day in the neighborhood, and I think the true unemployment rate (when all the jobseekers are included) is much higher than what we are being told. — Tom S., Pennington, N.J.
A:The New Jersey governor’s mailing is correct — even if you add the upcoming loss of his job to the statistics. The state's employment picture roughly mirrors the rest of the nation: the unemployment rate has been falling over the last year from a high of 6.1 percent in July, 2003. Though the job drought is easing somewhat, the situation is nowhere near as rosy as it was during the boom of the late '90s — when the jobless rate in the state hit a low of 3.4 percent in February 2001.
As for how gets counted, the Bureau of Labor Statistics asks people in it household survey if they are employed, looking for work or not looking. If you’re looking for work and unemployed, you get counted as unemployed even if your benefits have run out.
Keep in mind these are statewide averages — the unemployment rate in your neighborhood will almost certainly be higher or lower. In New Jersey, for example, the numbers at the county level range from a low of 2.7 percent in Hunterdon County to a high of 7.0 percent in Cumberland County.
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