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May 20, 201301:20 PMVan Lines

with Joe Vanden Plas

About those state jobs numbers …

(page 1 of 2)

Anyone who is familiar with the phrase “lies, damned lies, and statistics” will understand the editorial decision that I’m about to explain. The poster child for this saying could well be the preliminary – and we do mean preliminary – monthly jobs data for Wisconsin that are released by the Department of Workforce Development, based on statistical information provided by the U.S. Bureau of Labor Statistics.

Last week, the preliminary report for April showed that Wisconsin’s total employment rose by 7,800 in April of 2013 and the unemployment rate was 7.1%, unchanged from the previous month.

Don’t believe it, at least not yet.

IB has made the decision not to emphasize the preliminary monthly state reports because they have proven to be wildly inaccurate and at times subject to substantial revision. The reason they are wildly inaccurate is because they are based on a very small sampling of Wisconsin businesses, roughly 3.5%, as noted during last year’s gubernatorial recall election.

Instead, we’ve made an editorial decision to highlight the previous month’s revised report and de-emphasize preliminary data from the most recent month.

IB also chooses to emphasize the Quarterly Census of Employment and Wages, the QCEW, which is published much later than the monthly reports but is based on a sample size of roughly 95% of state employers. This report shows the state gained 32,000 jobs during the past 12-month period, and 62,000 over the past two years.

For clarity’s sake, it’s more worthwhile to report revised seasonally adjusted numbers for March, which don’t paint a very pretty picture. After preliminary numbers showed the state lost 8,500 jobs that month, the revised numbers show a loss of 7,000. Keep in mind that those are seasonally adjusted numbers. The not-seasonally-adjusted numbers for March show a small gain of 100 jobs.

Note to conspiracy theorists: There is no hidden political agenda here. We have not made this decision to make Gov. Scott Walker look good. Even the more reliable quarterly reports show that job growth is about half of the 250,000 new jobs he promised when he ran for governor. We’ll let Wisconsin residents decide whether to hold that against him or give him a pass because there has at least been moderate improvement.

For those of you keeping score, the state would have had to create 62,500 jobs per year, or an average of 5,208 per month, for Walker to fulfill his pledge over the four years of his term. Since he’s at about half that pace, he would have to double those numbers, a very unlikely scenario.

Incredible shrinking deficit

No matter what either employment measure says, there is reason to be upbeat about the state (and national) economy. Higher tax collections at both levels, for one, indicate a gradually improving economy.

In Washington, a combination of higher tax collections from economic growth and lower-than-anticipated spending due to the sequester has the federal budget deficit shrinking to $642 billion in the fiscal year that ends on Sept. 30, according to the Congressional Budget Office. Three months ago, the projected FY 2013 shortfall was $845 billion, and the actual deficit for all of FY 2012 was $1.087 billion, which means we’re at least adding debt at a slower pace.

For the remaining few of us who still believe deficits matter, this is welcome news, especially after four consecutive years of deficits in excess of $1 trillion. It’s hardly time to pop champagne corks because there still is much more work to be done, but it shows what the combination of economic growth (however moderate that happens to be) and spending restraint can do to shrink an annual shortfall.

There’s more revenue to be had from tax reform that lowers the corporate rate in exchange for eliminating tax breaks for the wealthy and well connected. Such reform will be labeled as “revenue neutral” because the dynamic impacts of the lower rate will not be factored into to the CBO’s estimates, but it could spur enough hiring and business activity to blow through the CBO’s “static” scoring.

Old to new | New to old
May 21, 2013 12:03 pm
 Posted by  Anonymous

Unfortunately politicians (of both stripes) are incredibly adept at losing focus about anything important if it can't be done in a normal news cycle.

May 21, 2013 01:16 pm
 Posted by  Anonymous

What would help would be some modification of the sequester- keep many of the cuts but provide some flexibility- in the military budget for instance fund maintenance over new contracts for more equipment. Though a further reduction of the military budget would boost the economy and reduce the deficits more with less impact on the domestic economy.
We need to figure though also on Oklahoma City, the floods in New Jersey as the new normal and decide how to deal with them as rebuilding those areas will be an ongoing challenge and there will be a lot more of them in the coming years.
In terms of the scandals I agree - the IRS one especially has had bad coverage in the press. Given the Bush administration's ramp up of oversight on all 501c3s (the proposals of which went far beyond the current reviews of tea party groups) we should not be surprised that the Obama administration would take a close look at groups that were incorprating with a limited and singular political focus and a tendency to coordinate information campaigns with political ones. 501c3's have never been allowed to use resources to work on partisan political campaigns, so doing extra review on those types of applications does not seem out of line.
In terms of the state economy we'll see- expect partisan politics to hit the urban areas hard with increased costs for businesses as a result for Dane , Racine, Kenosha and Milwaukee Counties. businesses (Waukesha will be hit less because so much of their low wage labor is imported from other counties)
When the state starts collaborating to build the economy, we will see faster growth but what I see happening here is still basically the spoils system. Having the governor running for President doesn't help- there were major mistakes made late in the Thompson era for the same reason.

May 21, 2013 02:00 pm
 Posted by  Anonymous

Vanden Plas calls the Walker numbers "moderate improvement"----seriously? Yet he claims he's not pandering to republicans.

May 22, 2013 06:04 am
 Posted by  Anonymous

Mathematically speaking, yes, the numbers are moderate improvement, and based on a more sound method of gathering information. There are other concerns not addressed by the statistics -how many of these new jobs actually pay a living wage, for example, but I don't think it's pandering to either side to choose to use more reliable (3.5% businesses surveyed vs 95%) reporting methods.

May 22, 2013 06:15 am
 Posted by  John

Good column, Joe. I agree with your decision on BLS numbers. At times last year they were off by more than 100%. A joke.

Anon1: Exactly
Anon2: No one would have a problem with the IRS looking closely at ALL politically motivated nonprofits: the issue comes from a political choice to focus on potentially opposing ideologies only.
Anon3: Employment change over Gov Doyle's 2 terms: -60,000 jobs
Employment change over Gov Walker's 2+ years: +60,000 jobs. So yes, that's AT LEAST a moderate improvement to anyone not nursing a grudge.

May 23, 2013 02:32 pm
 Posted by  Anonymous

Come on people, there is no way to make a positive out of Scooter's job creation performance. His outrageous campaign promises in this area notwithstanding, our numbers are far behind the nation's and our neighboring state's job creation improvement.

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