October 9, 2012 in Opinion

Editorial: Furor over jobless rate is nothing but politics

 

The Spokesman-Review Editorial Board

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You know it’s the silly season when the routine tabulation and reporting of the national unemployment rate sparks a political firestorm. According to the Bureau of Labor Statistics, the jobless rate dropped from 8.1 percent to 7.8 percent in September.

“Unbelievable jobs numbers … these Chicago guys will do anything … can’t debate so change numbers,” tweeted former General Electric Chairman Jack Welch. From there, the allegations of “cooking the books” mushroomed.

The evidence? None.

Oh, there were plenty of attempts to show the alleged sleight-of-hand, but many of these amateur statisticians only demonstrated one thing: They have no clue how the numbers are typically compiled, adjusted and reported.

Gregory Mankiw, former head of the Council of Economic Advisers for President George W. Bush, is now an economics professor at Harvard. His blog addresses the confusion by noting that two surveys are conducted – one of businesses and one of households – and they don’t always gibe. Political spinners took this dissonance as evidence that politics were at play. Mankiw points to his own textbook on the matter:

“One might expect these two measures of employment to be identical, but that is not the case. Although they are positively correlated, the two measures can diverge, especially over short periods of time. A particularly large divergence occurred in the early 2000s, as the economy recovered from the recession of 2001. From November 2001 to August 2003, the establishment survey showed a decline in employment of 1 million, while the household survey showed an increase of 1.4 million.”

Fortunately, folks like Welch weren’t tweeting back then, or this divergence might’ve erupted into a false controversy. More recently, the jobless rate from November 2010 to December 2010 dropped from 9.8 percent to 9.4 percent. But the midterm elections had passed, so the numbers were accepted.

Cynicism about our institutions, whether public or private, is rampant. Some of that is earned, but some of it has been unnecessarily spread by political players. The resultant erosion in public trust stymies leaders of both parties.

The BLS numbers are an educated guess and are constantly updated as more data become available.

The September rate reflects in part adjustments to July and August data. The numbers are collected and examined by each state. There are too many players to pull off a conspiracy, especially one that was allegedly hatched after Wednesday night’s debate in time for Friday morning’s report.

Keith Hall, who was in charge of BLS data collection in the Bush administration, told McClatchy Newspapers, “People shouldn’t think at all there is any bias in the numbers.”

But this is the silly season, where a distressingly high 7.8 percent unemployment rate is cheered by one party, while the opposition implicitly roots for worse … until the election is over.

To respond to this editorial online, go to www.spokesman.com and click on Opinion under the Topics menu.


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