Well I can't get my review done until they fix the site so I'll just share some notes as I go in and out this weekend:
Very disturbing looking jobs data acourding to this article in Financial Sense, which pretty much sums up what was bothering me about the figures. I knew something wasn't adding up and I think Chris hits the nail on the head by pointing out that the bulk of our job "growth" is coming from the administration tinkering with the numbers, not from actual jobs.
He points out that changes in the BDM, the Birth/Death Model which is used to derive the NFP (Non-Farm Payroll) number has been adjust downwards by 69% since the beginning of '05, which causes job gains to appear 69% higher than they would have been under the old model. While I'm sure the President thinks that this amazing drop in mortality is a reflection of his health care plan (or lack thereof), it's really the birth and death of businesses they are tracking.
The BLS surveys 160,000 employers at 400,000 worksites across the countty to product the NFP number. It adjusts those results using the Birth/Death model to account for how many new businesses are "born" and how many "die" during the period. So if the average construction project employes 40 workers and the government assumes that there is a 10% birth-rate in construciton jobs, then there's 5,000 more jobs right there (95,000 construction jobs were "born" in '06)! There was a big deal made about phasing in adjusted numbers and they started making changes in 2000 with the final adjustments made in 2003 but the sampling assumptions are based on business growth during the Clinton administration, where 22M jobs were created in 8 years.
It is very possible that the 100,000 jobs claimed to be added recently are simply the statistal average between the 275,000 per month average of the 90s, on which the model is based, and the reality of 75,000 lost jobs per month this decade.
How do they tinker with the numbers. Simple rule changes: A non-respondents' (a place of business that doesn't answer the phone) job growth is automatically given the same growth rate as the average respondant. In other words, "That business isn't dead, they just don't answer their phones anymore." Also, by NOT budgeting to go out and get an accurate survey of actual business births and deaths (and this can be done by simply running the SIC codes through the IRS and get the total number of filing companies in each industry – something that would take a mediocre programmer an afternoon to work out) we are still working under the assumption that there is a tech, financial and housing boom so 10,000 layoffs by the brokers in Q4 is offset by the birth of hundreds of new brokerages who all must (even though they are new) be employing the average number of people for the sector.
So budget cuts can help the government hide things! Smaller government means less people looking over their shoulder while the people in charge hold the threat of job losses though "additional department cutbacks" over the head of everyone who remains. When people are secure in their jobs or truly feel that other jobs are readily available the are far more apt to be whistle blowers or may even (gasp!) demand higher wages or, dare I say (choke!) – benefits.
This article on wage slavery is a little lot left, even for me , but they do make some excellent points along the way and in the middle they have a very nice summary of how the system oppresses the average worker. I'm not anti-capitalist but when the disparity of wealth grows to the point that, if 1,000 of the world's wealthiest people (every one of them a Billionaire) were to give up 1/2 of their wealth they would double the standard of living for the rest of the planet, then don't start that revolution without me!
