Deceptive September BLS Report Ignores Terrible Ground Conditions

By Joe Guzzardi
October 6, 2014

The monthly Bureau of Labor Statistics jobs report has been so manipulated and so politicized for so long that the fabricated statistics are meaningless, hardly worth compiling and publishing. In a classic example, during the weeks leading up to the 2012 November election, analysts pointed out that no sitting president had ever been reelected when the unemployment rate was below 8 percent. Presto, just like magic, only days before the election, BLS announced a 7.9 percent unemployment rate.

Last week, with the mid-terms looming, Democrats in danger of losing Senate control, and the president’s approval rating in steep decline, suddenly unemployment dropped to its lowest level since 2008. The White House hopes 5.9 percent will be as magical a statistic in 2014 as 7.9 percent was in 2012 when it propelled Obama to another term.

Two major problems with BLS statistics and the analysis of them are that first, the methodology is deeply flawed and second, that they ignore the long-term effect of natural population growth, high school graduates poised to enter the labor market and ongoing record high immigration.

Under the convoluted BLS formula, September’s 5.9 percent unemployment rate reflects people unemployed and people looking for work.  But when individuals stop looking for work, they’re no longer counted as unemployed even though they don’t have a job. Nearly 93 million Americans are out of the labor force; September’s labor participation rate dropped to 62.7 percent, a 36-year low. Those lucky few who have a job have endured nearly fifteen years without a pay raise while the median American family’s income is 8 percent less than it was before the recession and 9 percent less than in 1999. Average hourly earnings have been flat for months.

Even though more than 80 percent of September’s 248,000 new jobs paid minimum wage or pennies more, the statistic that made the headlines is 5.9 percent. The real newsmaker should be dropping labor participation, stagnant wages and the deceptive BLS accounting. 
 

To get a more complete understanding of what’s really going on and why it’s unlikely to improve anytime soon, factor in that this spring 3.3 million high school seniors will graduate. Many of them will immediately hit the pavement looking for work only to be met with the prospect of low-paying jobs, most of them temporary.  A record number of university graduates will also enter the labor market even though more than half eventually work in jobs that don’t require college degrees. A recently completed San Francisco Federal Reserve Bank study found that the average college graduate makes $692 weekly, about $36,000 annually.

Then, there’s population growth and immigration. Sustained population growth will eat up about 100,000 jobs each month. Legal immigration and guest worker visas account for another 175,000 new monthly workers who compete for jobs with Americans. Summarizing, population growth plus legal immigration plus guest workers equal 275,000 which exceeds September’s 248,000 jobs.

In today’s America  one in five have been laid off during the last five years and 22 percent of them haven’t found new jobs; 46 percent of the 30 million laid off were hired at lower salaries than they earned previously, and  42 percent have less savings with 25 percent of  those reporting “a lot less” saved.

Even though America is experiencing an extended jobs crisis with no relief in sight, Obama has promised to proceed with his executive amnesty before year end. His action would immediately legalize at least 5 million unlawful immigrants and grant them work permits. The last thing the depressed U.S. jobs market needs is 5 million more workers vying with Americans for the nation’s precious few remaining jobs.

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Joe Guzzardi is a Californians for Population Stabilization Senior Writing Fellow whose columns have been syndicated since 1987. Contact him at [email protected]