No Runny Eggs

The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.

The Solis “Miracle” – less than what was claimed

by @ 11:22 on December 6, 2011. Filed under Economy, Politics - National.

The Right Scoop flagged me to an interview Labor Secretary Hilda Solis did on The Bill Press Show yesterday (or at least it was posted yesterday) and asked whether I could look into a few claims she made at the beginning of the interview:

  • Over the last 22 months, the economy added 3 million private-sector jobs.
  • Over the last 21 months, the average private-sector job gain was around 160 thousand.
  • Both numbers were significanly better than the George W. Bush record.

It took a bit longer than I thought because I wanted to be a lot more thorough than the Labor Secretary, but it isn’t exactly all that Solis claims.

The first bit is the closest to the truth. Using the Current Establishment Survey (the part of the jobs report that differentiates between the non-farm private-sector jobs and the government jobs), the economy did gain 2,926,000 jobs between January 2010 and November 2011. While it is a bit of a stretch (like Ford’s stretch of the 302 V-8 into “5.0L”), it’s close enough for government work.

Unfortunately, the 21-month recovery in private-sector jobs, from February 2010 to November 2011, saw an average gain of 140,333 jobs per month. I don’t call overestimating reality by over 14% close, especially when the CES covers roughly a third of all workers (or somewhere just north of 40 million).

The last item on the list requires a rather lenghty bit of explanation. I could go the very-cheap route and point out that for the entirety of the Obama administration (starting with the change from January 2009 to February 2009 as the January surveys are taken before the Presidential inauguration), the private sector lost an average of 37,120 jobs per month, while over the 8 years of the Bush administration (again starting with the January 2001-February 2001 change and ending with the December 2008-January 2009 change), the private sector lost just an average of 6,800 jobs per month despite a full recession and 2/3rds of a second. That would be way too easy, however.

I could also compare the first 21-month stretch of unbroken private-sector job growth under Bush to the current streak under Obama (average of +152,860 jobs/month to +140,333 jobs/month), but Bush’s streak began far later than Obama’s. In fact, it was exactly one year later into the recovery, August 2003, that the jobs market stopped producing CES private-sector losses.

Using the CES numbers, the private sector added 705,000 jobs between July 2002 and April 2004, for an average of +33,570 per month. The private sector added 2,947,000 jobs between February 2010 and November 2011, for the aforementioned average of +140,333 per month. However, if the 22-month time frame is narrowed down to the last 6 months, the Obama recovery (May 2011-November 2011) lags behind the Bush recovery (October 2003-April 2004), with an average of +132,830 per month compared to an average of +144,500 per month.

The bad news is the CES, while it covers an estimated 1/3rd of the labor force, double-counts those who hold multiple jobs and pretty much misses those who are either self-employed or working at a start-up. The Current Population Survey, though it is far smaller than the CES because it covers “only” 60,000 people each month, is still an order of magnitude bigger than your typical political survey, counts multiple job-holders only once and covers the portion of the survey who are self-employed.

The CPS chart that comes closest to the non-farm private payroll CES is the private wage-and-salaried non-farm workers chart. Between July 2002 and April 2004, 1,987,000 more people found private-sector wage/salaried work (an average of +94,620 per month), while between February 2010 and November 2011, 3,103,000 more people found private-sector work (an average of +147,760 per month).

However, that still doesn’t include the self-employed. While 299,000 more people were self-employed between July 2002 and April 2004, 364,000 fewer people were self-employed between February 2010 and November 2011.

Adding the two together nets 2,286,000 more people either self-employed or employed by a private entity between July 2002 and April 2004 (an average of +108,860 per month), and 2,739,000 more people either self-employed or employed by a private entity between February 2010 and November 2011 (an average of +130,430 per month). The same “last-6-month” metric shows the same lag for the Obama recovery – +111,170 self-employed/private employed per month between May 2011 and November 2011, and +132,830 self-employed/private employed per month between October 2003 and April 2004.

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