February 07, 2011

A note on the unemployment rate

Various wags around the blogosphere are having a lot of fun at the expense of Hilda Solis, Secretary of Labor, and her Bureau of Labor Statistics, which some have taken to calling the Ministry of Truth with reference to the dystopian misinformation bureau in Orwell's Nineteen Eighty-Four. The latest fuel on the fire came in the form of Friday's NFP (Non-Farm Payroll Report) which claimed that 36,000 Americans found jobs in the prior month, and that as a result the U-3 unemployment rate (which is the only one the media/political class ever pays attention to) had fallen from 9.4% to 9.0%.

Since as everyone knows (because the fact is repeated endlessly everywhere you look) the United States hatches about 125,000 to 150,000 new workers each month just through the maturation of the population, many looked askance at the effect of a number approximately 1/4th the size of the average of these two numbers in lowering the overall UE rate. Some cynics then suggested that if 36,000 new workers could lower the UE rate by .4%, then a bonanza month of hiring, say on the order of 360,000, well within historical precedent for previous recoveries, should take us all the way down to about 5%, which in Darwinian capitalism (the kind we practice) represents full employment. In other words, we're almost there.

Yet that seems a little crazy. How could such a huge problem of unemployment be solved with one fairly average good month, and with such a paltry number compared to the problem? Thus, rather than being like the other guys & gals writing about this, I decided to hike on over to the Bureau of Labor Stats website and see what was going on. Is Hilda, the lovely child of Mexican and Nicaraguan immigrants, a loyal cadre of BarackObama's 2008 campaign who was rewarded for helping the O-Man with the Latino vote with a plum job in his administration despite virtually no visible qualifications for the position - is she cooking the books?

Of course not. For one thing, Hilda began as a supporter for Hillary Clinton and only started delivering La Raza for Barack when that fell through (though I was thinking, she must be quite an operator to turn on a dime like that and convince the wily Obama she was worth bringing onto his team). Hilda's a good California kid from the San Gabriel Mountains area, educated at Cal State Poly-Pomona, who worked her way up through the ranks of California state politics. It's just a guess, but I doubt that she knows anything more about statistical manipulation than she does about labor policy, whatever that might be. In general, with the notable exception of Steven Chu at Energy, there isn't much correlation between career expertise and cabinet position. It's more what the cabinet-appointees "have been interested in" at some point, such as a rancher being "interested" in the Interior or Eric "Place" Holder being "interested in" law.

But one thing I learned at Albion H. Horrall Elementary School in San Mateo, California, in the halcyon 1950's of this great country of ours was that a percentage is essentially a conversion of a fraction. 3 is 60% of 5 because 5 divided into 3 = .6. It's just that simple. So these cynics and carpers can go on all they want about the ridiculousness of 36,000 hires lowering the UE rate by .4% but it still all comes down to a matter of a numerator and a denominator. And the denominator is the Obama Administration's friend, see, because the FAQ for the BLS tells you exactly who is in that pool:

Who is counted as unemployed?

Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work.

Workers expecting to be recalled from layoff are counted as unemployed, whether or not they have engaged in a specific jobseeking activity. In all other cases, the individual must have been engaged in at least one active job search activity in the 4 weeks preceding the interview and be available for work...

So there you go. Now if I can do that, why can't the other wiseguys? It's right there in front of us. Hilda has delivered once again for Obama, because I can assure you that the number he's going to use is that 9.0%, not some exotic indicator like the U-6, which sounds a lot worse, and he's not going to go into a lot of detail about how the denominator for U-3 is calculated. That's how politics works in a mass-media society, a subject which admittedly fascinates me. The public, the media, everything and everyone, are simply worn down by the repetition of the residual number, in this case 9%. There just isn't the patience or the mental space in our frenetic, crowded culture, every damn time out, to go into a whole routine about how the U-3 actually got better because the economy is so uber-shitty that no one even bothers to look for a job anymore, which is the actual, literal truth, but to point that out takes time and understanding, and those things don't exist anymore. The key to effective Presidentialness, and Obama understands this, I think, better than he understands anything else (it is the whole secret of his success) is to seize the headline numbers and make them work for you because no one, ever, is going to look at anything else, and your opponents are going to battle you on that turf.

Which is to say: modern mass-media politics is not actually about reality. It is essentially, only, exclusively, about the management of perceptions. It cannot do anything about real problems because it does not engage real problems; it only engages their simulacra, their indicia, their Platonic Shadows on the Cave Walls of Reality.

No comments:

Post a Comment