Saturday, August 06, 2005

To Learn About Friday's Jobs Report, You Had To Read An Editorial

The headline in today's New York Times sounded sunny: "Employers in U.S. Add 207,000 Jobs to July Payrolls."

"With the exception of manufacturing, the labor market was strong across the board, offering further confirmation of the economic expansion evident in recent data on consumer spending, industrial production and home sales," reporter Eduardo Porter offered.

Meanwhile, over on the Times' editorial page, readers were given some interesting context.

In "Some Caveats on Job Growth," the op-ed board wrote:

"Since the spring of 2003, when job losses bottomed out, the monthly average has been 152,000. That's enough to absorb the 150,000 or so new workers who enter the labor force each month, and then some. Still, it's not robust. If jobs were being created today at the same pace as in other economic recoveries since World War II, the monthly average would be about 250,000."

Put that way, the "booming" economy that conservatives talk about doesn't sound nearly as ... uh ... booming.

You might recall that during the presidential election, President Bush and the RNC touted 10 straight months of job gains, then 11, then 12 ... even when those monthly job gains were less than 50,000. The soundbite sounded good -- no need for context.

Is this a good economy? Sure. Relatively speaking, it's good. Not great. But certainly good. But it comes at a cost -- a federal deficit projected at $333 billion for 2005, following a $412 billion deficit in 2004.

Some conservatives suggest that deficits don't matter -- that the country will grow its way out of its balance-sheet problems. But which would you rather have: modest job growth and a balanced (or nearly balanced) budget, or modest job growth and the largest annual deficits in the nation's history?

***

"Average hourly wages of production and nonmanagement workers rose nearly 0.4 percent, the fastest rate since July of last year," Porter wrote in his sunny, front-page assessment of the July job growth numbers.

But over on the editorial page, we learned:

"Average hourly wages rose a surprising 0.4 percent in July, the strongest monthly surge in a year. But they're up only 2.7 percent over the past year, hardly keeping up with inflation. Asked about that yesterday, Secretary (Elaine) Chao replied that overall compensation -- which includes employer-provided health care and other benefits -- was rising faster than the cost of living. That's correct, but somewhat disingenuous. The fact that workers' raises are, in effect, being diverted to cover the exploding cost of benefits is hardly a positive development."

***

What to make of this? Well, variations of the Times' sunny front-page story were written in newspapers all over the country. And while those stories factually recite the necessary statistics for July, isn't it a shame that to get context, readers have to turn to an editorial?

***

There was a grear article in a recent issue of New York magazine, in which there was a discussion of the trickle-down effect of each newly minted rich person. Every time someone earns $500,000, economists say, about four jobs are created.

But what kind of jobs? Service-industry jobs -- chauffers, waiters, etc. Most of those jobs pay $50,000 or less, which doesn't get you very far in New York, or most of the other high-flying environments were the super-rich spend their money.

Here's the point: You can look at the job-creation numbers and simply say, things are good. Or you can ask questions: What kind of jobs were created? What kind of wages and benefits do these jobs bring? What effect do these jobs have on the economy?

We live in a soundbite society, but before we congratulate the Bush Administration based on a few statistics, it may make sense to seek some context.

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