Where the Jobs Went, Oct '07 vs Year-ago

Yesterday I caught Lou Dobbs on CNN for the first time in months.  Every time he worked his opinion about jobs into the conversation, he had the same look of contemptuous disgust on his face as he's had for a long time now.  His unsurprising message, communicated in no uncertain terms via words and body language: Those evil old US corporations (full of "idiots") are still exporting high-paying jobs from America to the Asian communists. 

Sadly, it was the same message I'd expected to hear from him.  But I remain optimistic: I keep hoping someday Lou Dobbs will surprise me, and actually take a look at the employment numbers in a little more detail before deciding whether the companies driving our economy are still worthy of his contempt and disgust.  That's why I plan to continue sampling his show on CNN frequently—specifically, every four months or so—before switching back to a more objective (and pleasant, and educational) experience with Larry Kudlow on CNBC—which I try to catch every weekday at 7pm Eastern, 6pm Central. 

With that plan in mind, I added a "Lou Dobbs information box" on this month's employment chart.  Do you think it will do any good?  In any case, below are the latest jobs numbers from the Bureau of Labor Statistics.  The economy added 1.38 million jobs (private nonfarm).  Lou Dobbs's favorite categories to flog, manufacturing and construction, "lost" 322,200 jobs that paid an average of $18.88/hr.  Happily, the companies driving our economy added 586,500 jobs that pay more than that ($20.55/hr avg), and also added 1,114,400 other jobs averaging $15.06/hr.  If those numbers aren't good enough, it makes one wonder what the numbers would have to be to deserve a smile instead of a sneer, doesn't it?   

Here are the usual charts; click to enlarge.

Comments

[muirgeo]

"The economy added 1.38 million jobs ..."

I assume this was for 12 months. And this is something I don't understand. Doesn't the population and thus the job pool grow by 2.5 million a year?

[Steve]

muirgeo:
First: yes, 12 months, as the titles say.

Second: Those who tend to look for whatever can be spun as bad news have lately been pointing to the "employment-to-population ratio" I've been noticing. Sounds like you are alluding to that statistic.

For a thorough analysis of the information content of that number, compared to the more familiar unemployment rate, I recommend reading chapter 7 of Gene Epstein's book, Econospinning. Krugman and DeLong are mentioned in that chapter, so if you're fans of theirs, it would be educational to see what Epstein says about their arguments.

I'm on my way out the door, but here's a quick summary of chapter 7: pay attention to the unemployment rate, because it carries more relevant information than the employment to population ratio.

[Stephen Reed]

Muirgeo,

Is that the population growth of the labor force or the population growth of the entire country?

Stephen

[Bob]

Well, I'd really like to see better data from the BEA, too. Nevertheless, it is sufficient to counter Mr. Dobbs' assertion until he provides more detail.

The declines should cause no one to wring their hands as there was a bubble in residential construction.

Manufacturing has seen in declines from some time now. I'd like to see how many new technology jobs are created for every durable job lost because there is more code and less crank turning in the plant these days.

And for all those that lament the loss let me ask a question:

Would you rather pay $45 or $70 for a basic microwave oven?

[Kevin]

"Doesn't the population and thus the job pool grow by 2.5 million a year?"

Newborn babies are in the labor force now? Shouldn't we let them at least get through kindergarten first?

Actually, if you look at the BLS reports, the number of humans in the labor pool is growing about 1.2 to 1.3 million a year. Almost exactly one-half of the total population is considered to be in the civilian labor force. Infants are not counted in the BLS reports.

[Frank Monaldo]

Is there a summary number like the median salary of jobs lost and the median salary of jobs gained?

Thanks,
Frank

[PseudoNoise]

Muirgeo & I are on the same page, but it's not "looking for bad news", it's called being aware of the rate of inflation (working force inflation).

Working population is growing at about 1% / yr, which is about 137k jobs per month.
source: http://www.epinet.org/content.cfm/webfeatures_snapshots_archive_03152004
(a bit old, may have slowed)

If we're not meeting that rate on average, unemployment will be growing.

It's just being a realist (rather than an optimist, I suppose) -- how do we know that 160k jobs is a good number? It's pretty good, actually. 100k is not so good. 10k is awful...from a realist's point of view. I suppose from an optimist's point of view, 1 job per month is still positive growth, and -4k is better than it could have otherwise been.

Frank -- I don't know of that breakdown, but I do know you can see average hourly earnings:
http://angrybear.blogspot.com/2007/11/average-hourly-earnings.html

[JorgXMcKie]

If the new jobs to new working population is all that important then the French must be in a panic.

The Japanese, OTOH, have a very different problem, hmmmm?

If we're going to use that sort of statistic, then we really, really, really need to know what the number of illegal immigrant working force increase per year is and what the number of gray market jobs is, no?

For me this is the equivalent of the hand-wringing over exactly who is actually *in* the labor market. For instance, I've got a layabout ex-brother-in-law who would willing take a very high paying job that required no real work, but he's 'discouraged' from looking for work because, well, he'd probably have to do actual work. How do those like him get counted?

Finally, I'd really like to see the numbers of self-employed 'new jobs' for those who are making a living at it. It's just possible that we're not properly counting 'jobs' any more.

[Andrew]

"If those numbers aren't good enough, it makes one wonder what the numbers would have to be to deserve a smile instead of a sneer, doesn't it?"

I'm pretty sure we could add 10 service sector and technology jobs for every one manufacturing job lost, and Lou still wouldn't be happy.

Lou, and more importantly the disaffected generation (my father's generation) he panders to, only considers manufacturing (physical labor) jobs to be "real work". My dad himself holds the view that my life in a cubicle is both insecure and short term. Which it is... but that isn't really a big deal to my generation. I certainly don't plan to have the same job with the same company for 30 years like his generation did.