Job Loss/Gain explained.

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I have no idea if this is 100% accurate. Is anybody out her familiar with these two reports?

HAVE WE REALLY LOST JOBS UNDER GEORGE BUSH?

John Kerry is responding to a slide in his poll numbers by stepping up the rhetoric against George Bush on issues economic.  Kerry is saying that Bush has created "more excuses than jobs."  Very clever.  Kerry is now calling the last four years the "Excuse presidency."

Let's play with jobs numbers a bit.  If you're new to Nealz Nuze, or if you aren't a listener to my show, you're going to learn a few things you didn't know before.

The U.S. Bureau of Labor Statistics produces two separate jobs reports.  One is called the Establishment Survey, the other is the Household Survey [pdf].  These two surveys use different methodologies in measuring the number of people working and the rate of job growth or job loss.  The Establishment Survey questions a set list of established businesses every month on their employment numbers.  The Household Survey questions thousands of American households to see if household members are working, not working, looking for jobs, retired, etc.

There is a fairly big problem with the Establishment Survey.  Since the list of businesses canvassed every month for this survey is fairly static, any new businesses out there that have started in the last year or so won't be included.  Let's say you have a mythical town with three employers.  One large manufacturing plant that employs 1000 people, and two small businesses that have a combined employment of 60.  The large manufacturing facility has been in operation for 20 years and is a part of the government's monthly Establishment Survey.  The two small businesses were only formed late last year and are not on the Establishment Survey.  So ... let's say that in August the plant dismisses 5 people, but the small businesses hire those five people and about five more.  Additionally, four other residents have started businesses from their homes.  The Establishment Survey would show a net job loss in this town of five jobs in the September report.  The Household Survey, on the other hand, would show a net job increase of nine jobs.

Remember now, politicians generally like to use government statistics to prove the need for more government or to prove that their political foes are doing a bad job.  This means, of course, that the Democrats and the Kerry campaign will eagerly point to the Establishment Survey to prove that George Bush is losing jobs, not creating them.

By now I would bet that you're just screaming for me to get to the point.  What figures do we get from the latest Household Survey?

Hold on ... let's go back to Kerry for a moment.  Kerry says that Bush is the first president in 72 years to record a net loss of jobs during his term.  Kerry puts that number at 900,000 jobs.  NOW is the time to compare the two survey totals.

On September 3rd the Bureau of Labor Statistics published it's numbers.  The Establishment Survey showed that 131.5 million people were employed in non-farm jobs during August.  The Household Survey showed a total employment figure of 138.7 million.  That's a difference of 8.2 million jobs ... 8.2 million more Americans actually working than the numbers Kerry cites.  That sort of wipes out Kerry's 900,000 job loss, don't you think?

Come on, folks.  How in the world can you ignore small businesses when you report job numbers?  Most of the jobs in this country are in small businesses, the very businesses that can take up to two years to register on the government's Establishment Survey.  Job growth numbers in the small business private sector lag for a year or more behind than job numbers in large employers.  In other words ... the numbers Kerry is relying on are meaningless in the short term.

One more thing ... Bush inherited an economic recession that began under Bill Clinton --- then you had the dot-com bust and the terrorist attacks of 9/11.  By any measure that's a tough hand to play.  I wonder how The Soufflé would have performed?

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