Friday’s jobs report is not the home run that Democrats and the mainstream media claim. In their rush to champion topline job creation, they overlook how the jobs report is actually made up of two surveys. And the other doesn’t look so good, though it’s far more reflective of the economic reality facing ordinary Americans and small businesses.
The Bureau of Labor Statistics surveys business establishments and households each month to generate its report on labor market conditions. The establishment survey of payrolls produces the monthly job creation number the media is quick to champion. Yet even the BLS admits the household survey is “more expansive” because it also measures self-employed workers and those employed privately in households. This survey produces the unemployment rate.
For years, these surveys have tracked each other in terms of employment growth, as you’d expect. However, beginning in mid-2022, they began to diverge, with the payroll survey showing far more job creation than the household survey. Over the last year, the payroll survey finds 2.9 million jobs have been created, while the household survey reveals only 1.1 million new jobs.
In stark contrast to the 353,000 jobs created in the payroll survey, the household survey shows employment actually declined by 31,000 last month. Full-time jobs declined by 63,000. That’s a far cry from today’s headlines about a booming economy.
These household survey numbers are in line with other anecdotal and empirical data. On Thursday, the job placement firm Challenger, Gray and Christmas reported a historic 82,300 layoffs in January. This week, UPS announced 12,000 layoffs. Major companies such as Zerox, Spotify, and Hasbro have recently laid off at least 15% of their workforce. There’s also a jobs bloodbath currently occurring in the media sector.
On Wednesday, ADP reported that only 107,000 private-sector jobs were created in January.
There are other technical problems with the jobs report. Seasonal adjustments and annual revisions to population estimates have made January jobs reports notoriously untrustworthy. I can’t understand why we need opaque “seasonal adjustments” to the job numbers at all. Americans are smart enough to understand that job creation will be higher in some months and lower in others for seasonal reasons. We don’t need green eyeshades smoothing them for us.
Bipartisan tax cut legislation passed this week in the House of Representatives can turbocharge job creation in both surveys in the months ahead. The legislation, brokered by House Ways and Means Chairman Jason Smith (R-MO), extends key tax cuts passed as part of the Tax Cuts and Jobs Act in 2017, making it easier for small businesses to invest, expand, and hire.
This legislation is overwhelmingly supported by Main Street, with small businesses calling the immediate expensing provision “a game-changer.” The Senate should quickly pass this legislation and send it to President Biden’s desk to be signed into law.
In the meantime, let’s see if the payroll and household surveys continue to diverge in the jobs reports ahead. If they do, it will be more confirmation that the economy is not out of the woods yet.
Alfredo Ortiz is a contributor to The Daily Caller News Foundation, president and CEO of Job Creators Network, author of “The Real Race Revolutionaries,” and co-host of the Main Street Matters podcast.
Suddenly America is facing a severe structural labor shortage. We all feel it, whether we’re trying for reservations at a restaurant that has reduced hours, seeking handyman help, or just trying to get somebody to answer the dang phone.
Nurses and teachers are in short supply. Employers report at least two job openings for each job seeker. Beyond personal inconvenience, when workers produce fewer services and goods for dollars to chase, prices go up and inflation results.
You can partly blame it on COVID. Politicians shut down much of the economy, then shoved trillions of dollars in “COVID relief funds” to those forced not to work.
Unfortunately, the spigot was never fully closed, and many Americans found that sleeping in agreed with them. Europe, Canada, and Japan all rebounded while the U.S. was left with about one million fewer workers.
Adding to the problem, the youth anti-work movement continues to grow. Work is for suckers and victims. Social media outlets praise workers for quitting their jobs. Others are lionized for being “quiet quitters,” idlers who do the least work possible while still collecting a paycheck.
The inspiration for the anti-work cult traces back to the Marxist anti-capitalist movement, a long-time foe of the American work tradition. Their thesis is that capitalist employment is exploitive and therefore, not working is virtuous.
It coincidentally turns out that, for many Americans, government policy has significantly disincentivized work. And for these people, working harder is no longer the way to get ahead.
Writing in the Wall Street Journal, Phil Gramm and John Early explain how this effect is commonly underestimated because of the way income is reported by the federal government. The Census Bureau, inexplicably, does not treat most transfer payments as income.
That’s important because government transfer payments to the bottom 20% of households, income-wise, ballooned by 269% between 1967 and 2017 while the middle 20% realized only a 154% increase in their after tax income.
The results were staggering. In 2017, the bottom 20% of households had $6,941 in “income” and only 36% of working age people actually worked. However, after the transfer payments and taxes are included, as they should be, their total income was $48,806.
The second to the bottom quintile had 85% employment and an average total income of $50,492, actually less than a $2,000 difference from the lowest group. The middle quintile was 92% employed and earned $66,453, but after taxes and transfers that shrank to $61,350, merely 26% more than the bottom quintile.
But wait, there’s more. Family units are smaller in the lowest quintile than the others. Per capita, the adjusted net income was actually $33,653 in the lowest quintile, $29,497 in the next lowest, and $32,754 in the middle.
Sorry for all the numbers, but they tell an important story. For 60% of Americans, working much harder and even earning more money produced a negligible net benefit. Means-tested government programs were just as lucrative. It’s not hard to understand why the percentage of working age people in the lowest quintile who were employed fell from 68% in 1967 to 36% in 2017.
Policymakers seem to believe that incentives don’t matter, but they do. People who choose not to work and live off the labor of others earn some understandable resentment, but they’re not acting irrationally under the circumstance. The heart of the problem is their enablers in Big Government who, for their own political purposes, created this perverse system.
It’s often forgotten that in the 1990s, governments established work requirements for many means-tested benefits. “Workfare” was a generational policy success. In spite of hysterical warnings that “children would starve in the streets,” poverty rates dropped as employment increased.
Unfortunately, the advocates for workfare declared victory and moved on. But welfare bureaucrats stayed put, patiently reestablishing their vision of welfare without requirements. So now poverty is supported rather than reduced. And Arizona was among the states that quietly removed the work requirements for Medicaid and other welfare programs.
But government handouts that replace labor don’t work. They erode self-reliance, worker pride, and self-sufficiency. They threaten our shared prosperity. And most of all, they undermine American values.
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
Less than a year and a half after the initial economic disruption of the COVID-19 pandemic, Arizona has already recovered more than 100 percent of private sector jobs, representing one of the fastest jobs recoveries in the nation.
The Arizona seasonally adjusted unemployment rate decreased to 6.2% in August 2021 from 6.6% in July 2021. The U.S. seasonally adjusted unemployment rate decreased to 5.2% in August 2021 from 5.4% in July 2021.
Month over month, Arizona’s seasonally adjusted labor force increased by 6,169 individuals or 0.2%. Year over year, the labor force increased by 119,257 individuals or 3.4%. Month over month, Arizona total non-farm employment increased by 53,600 jobs or 1.8%. Year over year, total non-farm employment increased by 162,400 jobs or 5.8%.
“The last year and a half have challenged Arizonans like never before,” said Governor Doug Ducey. “But thanks to the ingenuity and perseverance of our hard-working employees and business community, Arizona’s recovery is in full swing, with a real momentum headed in the right direction. This isn’t the case for every state, and we will continue to work hard to make sure Arizonans have ample opportunity to reenter the workforce, access new skills, and get back to work.”
If given the option between working full time or doing nothing but receiving the same or greater pay, which would you choose? Most people would choose the latter. And can you blame them? Why wake up early and work all day if the government will pay you to stay home and do nothing instead?
This is the current workforce environment in America, and it is having a detrimental impact on our economic recovery. The result? While the Biden administration was hoping to tout a million new jobs for the month of April, they ended with a paltry 266,000.
And we have seen this lag in job recovery all across the country. Restaurants have posted signs apologizing to customers for delays in service, noting that their employees refuse to come back to work. And some businesses have started offering cash simply for coming in for an interview.
Never let a crisis go to waste, right? Under the guise of a global pandemic, politicians shut down the economy, and then created a citizenry dependent on unemployment checks exceeding the wish list $15 minimum wage pushed by the likes of Bernie Sanders. How is a business, coming out of potentially months with no profit, supposed to compete with that?
It is completely unsustainable. States can’t afford it. The feds can’t afford it. And most importantly, small businesses can’t shoulder it any longer.
Fortunately, some states have moved in the right direction. South Carolina announced they will be ending the $300 federal unemployment supplemental payments. This comes after Montana announced the same, along with $1,200 stipends to Montanans who return to work.
PHOENIX — Across the state, chambers of commerce are applauding Governor Doug Ducey’s decision that Arizona will no longer be taking the Federal Pandemic Unemployment Compensation, and instead will offer one-time bonuses to returning workers, along with child care support, educational opportunities and rental assistance.
The announcement follows reports from employers that they are having trouble competing with the federal government’s unemployment payments, which are paying individuals more to stay home and not work than to find a job.
Arizona will stop taking the federal government’s pandemic unemployment benefits effective Saturday, July 10. Instead, the state will offer a $2,000 Back To Work bonus for eligible workers — with a goal of getting as many Arizonans as possible to rejoin the workforce by Labor Day, September 6, 2021.
Arizona will also provide support for unemployed individuals seeking to upskill their careers with adult education programs as well as additional child care opportunities.
“In Arizona, we’re going to use federal money to encourage people to work…instead of paying people not to work,” Governor Ducey said in a video.
“The best social program is a job.” – President Ronald Reagan
Arizona is back to work!
Effective July 10th, Arizona will no longer be paying the $300/week federal supplement to unemployed workers, and instead we will be helping Arizonans get back to work. 1/ pic.twitter.com/lNXPhTrWxm
“With ample supplies of the COVID-19 vaccine on hand and millions of Arizonans vaccinated, people feel safer and are finally returning to life in Arizona as we knew and loved it before,” said Ducey. “People are back in the office, restaurants are at full capacity and tourists are flocking to our state.”
“There is dignity in work. Ronald Reagan said the best social program is a job. I agree with that,” Ducey said.
“We have worked tirelessly throughout the pandemic to ensure those who were displaced received the support they needed for themselves and their families,” said Arizona Department of Economic Security (DES) Director Michael Wisehart. “Now that employers in all sectors are hiring, we’re ready to transition and enhance our assistance to families, job seekers and employers. We are committed to ensuring the long-term strength of Arizona’s economy to provide self-sufficiency for Arizona’s families.”
The Governor’s Back To Work program is garnering support from community and business leaders across the state:
“Governor Ducey is breaking down many of the barriers that prevent people from returning to work. Getting people funding for GED programs, community college, providing funding for childcare, and bonus money for their hard work is the hand up Arizonans need,” said Arizona Regional Economic Development Foundation Executive Director Mignonne Hollis.
“After last week’s disappointing federal jobs report, Arizona is implementing a common-sense, conservative plan to ensure we continue our state’s strong economic rebound,” said Prescott Chamber of Commerce President and CEO Sheri Heiney.
“Across Arizona, restaurants of all sizes are ready to hire new employees and expand their teams,” said Arizona Restaurant Association President and CEO Steve Chucri. “When it comes to the food and beverage industry, things are much different than they were a year ago. Millions are vaccinated, we know how to keep patrons and staff safe, and people are ready to eat at restaurants again. Restaurants need to ensure they have enough staff to meet the demand, but many are struggling to fill positions. I’m grateful to Governor Ducey for encouraging Arizonans to find new employment opportunities so we can get our restaurants fully staffed and continue to move the state’s economy forward.”
“We’re excited to welcome new team members and provide great jobs for Arizonans,” said Westroc Hospitality President and Chief Operating Officer Bill Nassikas. “After weathering the pandemic, we know Arizonans are looking for employment opportunities. We’re ready to hire, along with countless other businesses across the state.”
“Arizona’s tourism and hospitality industry is poised and eager to welcome visitors,” said Arizona Tourism and Lodging Association President and CEO Kim Grace Sabow. We are prepared to offer safe and unique experiences to both leisure and business travelers. An array of quality jobs are available for those seeking a rewarding industry career path — and we’re ready to hire today!”
