Letters by a modern St. Ferdinand III about cults

'US has a Jobless recovery' says the Media. In the 1990s during the media love in with the Clintonites every new job created brought a rush of new adoring headlines. Yet with the hated Bushites in power the Media ignores reality and tells its loyal audiences that the US is in economic decline. We have heard this story before - during the 1980s for instance when reforms were being instituted that gave rise to the booming 1990s. In the past 2 years, over 1.2 million payroll jobs have been created, and about 2.4 million non-payroll, ie. self employed or new start up jobs, were created. In sum the US has generated about 3.5 million new jobs in the past 2 years. This is an outstanding rate of real job creation, considering that 9-11 was a Trillion dollar impact on its economy and the War on Terror is consuming about $400 billion per year in new spend.

There are many problems with the way the media portrays the job creationism in the US and in Canada. Some key problems are:

1. Ignoring Household Surveys: In analysing US job creation the media uses the out of date and laggardly Payroll surveys of jobs - which does not capture new, growing or very small firms which create employment. Payroll data is relevant but captures only part of the total story. A missing ingredient in the media analysis are the Household surveys which show that 2.4 million jobs [non-payroll] have been created in 2 years.

Not counting, small, new or single proprietorship creationism is folly. A main reason for ‘off payroll’ increases is the shift to a services economy and the wish by many to avoid the burdens of payroll taxation and social security deductions. Both of which need massive reform in the US as well as in Canada.

2. Employment Rates: The US employment rate is higher than ever, and the unemployment rate, which can be a bad indicator since it can be subject to government manipulation, [especially in Europe and Canada] is lower than at any time in the past 20 years. The current unemployment level is now 5.4 percent which is lower than the historical average [which is about 6.2 %] and more Americans in aggregate are working than at any time in their history. If the Democrats were still in power, these facts would be daily front page news and the source of endless talking points about the wonders of Democratic party capitalism.

Unemployment rates:
-1970s average was 6.4 percent,
-1980s average was 7.3 percent
-1990s average was 5.8 percent.
[ www.bls.gov/newsreleases/pdf
or
http://www.heritage.org/Research/Taxes/wm363.cfm ]

From Brian S. Wesbury, a highly ranked U.S. economic forecaster we have the following thoughts: ”The Bureau of Labor Statistics will not admit it, but there is something terribly wrong with the non-farm payroll statistics and the Establishment Survey that produces them. We find it very hard to believe that the December increase of just 1,000 jobs was anywhere near accurate. Every other major economic statistic paints a picture of rapid economic expansion. Initial claims have fallen rapidly, ISM employment indices have soared and Monster.com is advertising on TV again.

Moreover, the Household Survey paints a wildly different picture of employment. During the 12 months ending in December 2003, the household survey (which does a better job of capturing small firm hiring) shows more than 2 million new jobs were created, while the unemployment rate fell to 5.7%. During the same time period, the Establishment Survey shows that non-farm payrolls fell by 74,000. This discrepancy is the widest on record.”

Exactly. Most job losses in the US have occurred in government; manufacturing and transportation. Job gains are in services and yes technology contrary to media obsession about IT job outsourcing [less than 1 % of US IT jobs are outsourced, and the US has 9 million workers in ‘insourced’ jobs]. Ignoring service job creation and startup or self-employed status is a poor way to gauge job growth.