Nathan Newman wrote:
>The monthly employment estimates and the household surveys are giving
>completely different messages each month. Last month, there were massive
>job gains according to the household survey. Now, there's little doubt
>that the establishment survey is more reliable,
> but it's not "creationism"
>to suspect that there are statistical problems in the establishment survey
>given these wide divergences.
-That's a big change from what you've been arguing. -You're not doing a very good job of specifying what those problems -are. Is it the birth/death model? The technique of seasaonal -adjustment? The household data is seasonally adjusted too.
I'm not sure where you see such a big change, since I cited Crudele complaining about the birth/death model. The point is that models are fine as long as the pattern in this recession is similar to the pattern from the past on which they base the model. But if new things are happening in the economy, then the model will be inherently skewed.
I'm not even sure what has you in the tizzy-- except for disliking Crudele-- since raising the question of whether this recession might be different, and therefore throwing off lots of different economic models, is a pretty basic question raised by a lot of people.
>The HH survey showed big headline gains (and to be comparable to the
>payroll survey, make sure you're using nonag HH). But these were
>heavily concentrated in part-time work and self-employment - and were
>mostly gained by workers with a high-school diploma or less. So the
>skew was towards some fairly shitty jobs.
That may be-- and nowhere am I arguing that the real economy is doing so much better than that indicated by the establishment survey. But the creation of a lot of shitty jobs, possibly not caught by the establishment survey, is important. I've also highlight Stephen Roach quite a bit, who also has emphasized the low wage jobs created.
>And to repeat, you just can't convince me that the statistics are accurate
>for a whole range of workers in the informal economy, from undocumented
>workers to "independence contractors" to sweatshop laborers, whose work is
>not on any clear statistical radars. To argue such workers involve only a
>few percent of the workforce is hardly persuasive, since they are likely
to
>involve a disproportionate share of any fluxuation in job creation and
>destruction.
-Why should they represent a disproportionate share? Manufacturing -work is very cyclical, and that's mostly formal labor. Illegals are -heavily employed in agriculture, which isn't included in the payroll -survey. They're also employed in restaurants, and food service -employment has tracked the cycle pretty precisely.
Contingent workers are also employed heavily in construction, janitorial services and basically most of the economy. They are all over the place and definitely in the position to be dumped and picked up as the economy busts and booms.
I should say that such contingent workers are likely to represent a disproportionate share of fluxuations in jobs that traditional seasonal adjustments wouldn't account for. I'm questioning the models and their ability to catch changes in the economy that are different from patterns from past recessions. And changes that might involve these informal sectors are exactly what they are likely to completely miss.
-And I don't get your point here. ...Are you arguing that they're -missing a whole lot of off-the-books employment? The official stats -show not only weak employment growth - we're short some 8 million -jobs - but declining real wages. Do you disagree with that picture? -If so, you might want to write up a memo for the Bush campaign.
Hardly. I think the economy sucks, but if there are slightly more and slightly shittier jobs out there than the establishment survey indicates, that's important to know for policy formulation. I also take seriously the criticisms of the GDP measurement, that indicate that it may be overestimating economic growth. Do you really think GDP was booming at the end of last year and the first quarter of this year? I'm a bit skeptical.
Nathan Newman