{"id":18519,"date":"2013-07-31T20:38:17","date_gmt":"2013-08-01T00:38:17","guid":{"rendered":"http:\/\/cfif.org\/v\/freedom_line_blog\/?p=18519"},"modified":"2013-07-31T20:38:17","modified_gmt":"2013-08-01T00:38:17","slug":"gallup-fed-unemployment-formula-distorts-jobs-picture","status":"publish","type":"post","link":"https:\/\/cfif.org\/v\/freedom_line_blog\/18519\/gallup-fed-unemployment-formula-distorts-jobs-picture\/","title":{"rendered":"Gallup: Fed Unemployment Formula Distorts Jobs Picture"},"content":{"rendered":"<p>Beware of financial bureaucrats posing as economists. That\u2019s my main takeaway from some pre-analysis of Friday\u2019s unemployment numbers by Gallup\u2019s lead economist, <a href=\"http:\/\/behavioraleconomy.gallup.com\/2013\/07\/fed-should-target-full-time-jobs-not.html\" target=\"_blank\">Dennis Jacobe<\/a>.<\/p>\n<p>As is sometimes the case when using metrics to understand reality, it looks like the federal government isn\u2019t counting the right economic event if it truly wants to understand the employment market.<\/p>\n<p>According to Jacobe, \u201cThe current government job measures leave a lot to be desired in terms of face-validity. For example, [Federal Reserve Chairman Ben] Bernanke noted in his testimony to Congress that the Fed\u2019s unemployment target may need to be adjusted, depending on the labor participation rate. A declining participation rate can artificially lower the unemployment rate as job seekers give up looking for work, while an increasing participation rate can do the reverse.\u201d<\/p>\n<p>The problem is particularly acute when one considers how the feds count part-time jobs.<\/p>\n<p>\u201cSimilarly, the establishment survey can be distorted by a surge in part-time jobs \u2013 a factor that may need to be considered when one evaluates Friday\u2019s report,\u201d writes Jacobe. \u201cPart-time jobs not only count as new jobs for this survey, but if an American having one part-time job adds an additional part-time job, it counts the same as the creation of a new full-time job.\u201d<\/p>\n<p>This kind of counting completely misrepresents the <a href=\"http:\/\/www.theblaze.com\/stories\/2013\/07\/09\/the-disturbing-rise-of-part-time-work-in-the-u-s\/\" target=\"_blank\">rise in multiple part-time jobs<\/a>. By treating two-part time jobs as the equivalent of one full-time job, the metric leaves out the fact that unlike just about every full-time job, almost no part-time job provides health or retirement benefits. Thus, while the hours worked my be roughly the same, the overall compensation is not.<\/p>\n<p>What makes this an especially pernicious way to describe today\u2019s employment market is the <a href=\"http:\/\/blog.heritage.org\/2013\/07\/25\/obamacare-continues-to-cut-workers-hours\/\" target=\"_blank\">well-documented impact<\/a> ObamaCare is having on the decline of full-time employment. If the federal unemployment survey continues to equate workers with multiple part-time jobs and those with full-time employment, a huge net loss in millions of workers\u2019 standard of living will be lost because the official formula simply doesn\u2019t account for it.<\/p>\n<p>That\u2019s a point worth remembering if Friday\u2019s unemployment numbers come back better than expected.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Beware of financial bureaucrats posing as economists. That\u2019s my main takeaway from some pre-analysis of Friday\u2019s unemployment numbers by Gallup\u2019s lead economist, Dennis Jacobe. As is sometimes the case when using metrics to understand reality, it looks like the federal government isn\u2019t counting the right economic event if it truly wants to understand the employment [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[19,544,842,1186,862,18],"class_list":["post-18519","post","type-post","status-publish","format-standard","hentry","category-posts","tag-economy","tag-federal-reserve","tag-gallup","tag-labor","tag-market","tag-unemployment"],"_links":{"self":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts\/18519","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/comments?post=18519"}],"version-history":[{"count":5,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts\/18519\/revisions"}],"predecessor-version":[{"id":18524,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts\/18519\/revisions\/18524"}],"wp:attachment":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/media?parent=18519"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/categories?post=18519"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/tags?post=18519"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}