Debating job growth

Posted: Mar 11, 2004 12:00 AM

WASHINGTON, D.C. -- Recently, I have been making my own scholarly contribution to political scientists' understanding of the 2004 election by identifying a rising new constituency within the electorate, the moron vote.

Those who compose it are the angry, the fearful and the unaccountably neurotic. When they beheld Dr. Howard Dean hollering in public about how very angry he was, they thought of Abraham Lincoln. Now, they behold Sen. John Pierre Kerry boasting of all the hair he has on his chest, the medals on his wall and his grim plans for President George W. Bush, and they think of John F. Kennedy or maybe Robespierre -- Kerry is still very French-looking, (BEG ITAL) n'est-ce pas? (END ITAL)

Yet Kerry has to cast his net more widely if he is to give the Bush of his tirades the promised heave-ho. Thus, he now goes beyond anger and personal braggadocio to speak of economics and foreign policy. In doing so, he is not merely addressing our country's morons. He is addressing the understandably confused.

For whatever reason, in addressing them he merely adds to their confusion. Possibly he, too, is understandably confused. He sees hostilities in Iraq that have gone on beyond four months and cannot understand why our troops are not en route home. Certainly, his experience in war lasted only four months and then it was homeward bound. He sees an economy that is growing at a brisk 4 percent or more and sees economic despair. He is the perfect candidate for the understandably confused.

Yet elections are not supposed to spread confusion. Those of us who relish democracy always hope that an election is an opportunity for debate and for spreading the truth. Once the Massachusetts Braggart has quieted down, allow me to file two caveats against his lamentations. First, in Iraq, we have won the war and seem to be winning the peace. Though it would be imprudent for our government to mention it, our casualties have dropped dramatically this past month. The Iraqis may soon be governing themselves with minimum involvement from us or our heroic allies, the French and the Germans.

As for the economy, its robust growth suggests that job growth must be strong also. Yet the Bureau of Labor Statistics publishes data declaring job growth is low, only 21,000 new jobs in February as opposed to the forecasted 125,000. Are these statistics sound? Kerry does not ask that question, but some economists are asking it. One, Brian Wesbury, a man distinguished for his reading of economic trends and business achievement, has looked carefully at the economy and found job growth where others have failed to look.

Wesbury claims that in the New Economy, invigorated as it is by developments in software and technology that make founding small businesses more feasible, job creation is missed by the old way of measuring it. The old way was through the job survey called the Establishment Survey. The new way is through the survey called the Household Survey.

The Establishment Survey takes into account business establishments nationwide by measuring (BEG ITAL) payroll employment. (END ITAL) "But," writes Wesbury in the April issue of The American Spectator, "payrolls are not where the action is today. The real growth is entrepreneurial. Self-employment and Limited Liability Corporations (LLC) are growing like weeds, and these types of employment do not fit into the normal payroll." They do fit into the Household Survey.

Whereas the Establishment Survey tells us that since the end of the recession in November 2001 payroll jobs have declined by 718,000, the Household Survey indicates 1.9 million jobs have been created. Naturally, Kerry, the candidate of confusion, relies on the Establishment Survey. I doubt he has ever paid any attention to the Household Survey.

Wesbury believes that he should. It not only calculates job growth more accurately than the other survey, it also has tracked a trend. For two decades, self-employment has represented an ever-larger percentage of post-recession job growth. In the months following the 1982 recession, self-employment accounted for 5.4 percent of job growth. In the months following the 1991 recession, it accounted for 9.3 percent of job growth. "Since the recession ended in November 2001," Wesbury writes, "total household employment has climbed 2.1 million, and self-employment has grown by 644,000 ... 31.1 percent of all job growth in the Household Survey."

Is it possible to have the healthy growth we now have and a decline in jobs? The understandably confused are confused by this, as well they should be. If Wesbury is right, the confusion is caused by economic statisticians' failure to keep up with our dynamic economy. The economy is growing, and so is the job market.