A Mission for Public-Private Partnerships -- Job Statistics
Finding Common Goals and Applying Current Technology.....Imagine the Possibilities!
We can do better at collecting labor statistics. They impact everything. If how we work has changed so should the measurement. With the technology we have today, we should be able to apply them to a common mission of organizing economic information and data. The labor statistics would be a great opportunity to apply a joint mission of private and public partnership to solve a problem which impacts everyone. Collecting, organizing and analyzing large amounts of data is not a new science. Social media giants do this by the second, minute, hour. Research teams at universities solve much greater complexities. Data scientists at leading companies apply frameworks that commercialize industries. If how we work has changed so should the measurement.
Why The Job Reports are Wrong — F*cks up the Policy.
Yes…. the labor stats are done by SURVEYS!! When was the last survey you filled out??! They are done in person or over the phone!
Here is how it works……
In the United States, labor statistics are primarily gathered and reported by the Bureau of Labor Statistics (BLS), a division of the U.S. Department of Labor. These statistics provide essential data about the American workforce, including information on employment, unemployment, wages, and working conditions. Here's a simplified explanation of how some of the key labor statistics are calculated:
Employment and Unemployment Rate
Data Collection: The BLS conducts a monthly survey called the Current Population Survey (CPS), often referred to as the "household survey." Around 60,000 households are surveyed to gather data on employment status, age, education, and more.
Criteria: To be considered "employed," a person must have worked for pay, or profit, or have worked without pay in a family-owned business for at least one hour a week. To be considered "unemployed," a person must be jobless, actively seeking work, and available for work.
Calculations:
Employment Rate: (Number of Employed People / Total Labor Force) x 100
Unemployment Rate: (Number of Unemployed People / Total Labor Force) x 100
Labor Force: Number of Employed People + Number of Unemployed People
Wage Data
Data Collection: The BLS uses several surveys for this, including the Occupational Employment Statistics (OES) survey and the National Compensation Survey. These surveys are usually sent to employers rather than employees.
Criteria: Data include hourly wages, weekly earnings, benefits, and other forms of compensation.
Calculations: The BLS calculates average wages and also breaks down this data by factors like industry, occupation, gender, and geographical location.
Other Labor Metrics
Labor Force Participation Rate: This rate includes the percentage of people who are either employed or actively looking for work compared to the entire working-age population.
Job Openings and Labor Turnover Survey (JOLTS): This measures job vacancies and labor turnover, including hires and separations.
All of these statistics are estimates and subject to revision, like a moving target! Ironically, they are powerful tools (constructive or destructive) for policymakers, businesses, and individuals to understand the health of the labor market.
Here is how the BLS does it…. this is the poster on their site….
All this said……unemployment(labor) data plays a significant role in shaping various U.S. policy decisions. These statistics are closely monitored by policymakers at all levels of government—federal, state, and local—as well as by central banks like the Federal Reserve…..yikes! Current examples of decisions being made impacting everyone in the US include, interest rate increases by the FED, an increase in funding to groups and organizations with “special” interests, and increased allocation of state/federal tax money to non-performing/value-added projects instead of practical solutions (we fund the wrong things).
Here are some ways unemployment data influences U.S. policy…..
Monetary Policy (cost and value of money$$)
Interest Rates: The Federal Reserve uses unemployment data as a key indicator when setting interest rates. Lower interest rates can stimulate economic activity, which can lead to increased hiring, while higher rates usually cool down the economy and can result in slower job growth.
Quantitative Easing: In periods of high unemployment, the Federal Reserve might buy financial assets like bonds to inject money into the economy and encourage lending and investment.
Fiscal Policy (spending and how much you owe!)
Stimulus Packages: During times of high unemployment, the federal government may pass stimulus packages to boost the economy. These packages often include direct payments to individuals, tax cuts, and increased funding for public projects that create jobs.
Unemployment Benefits: The scale and scope of unemployment benefits can be adjusted depending on the unemployment rate. For example, during economic downturns, Congress may decide to extend the duration of unemployment benefits.
Tax Policy: Tax cuts for businesses or individuals are sometimes implemented to stimulate economic activity and job growth. Conversely, when employment is high, policymakers might be more willing to raise taxes for various objectives, like reducing debt.
Social Programs (more spending)
Workforce Development Programs: These are often ramped up when unemployment is high, offering training and skill development to help people re-enter the workforce.
Welfare Programs: Some welfare programs, such as the Supplemental Nutrition Assistance Program (SNAP), may see expanded eligibility or benefits during high-unemployment periods to help those who are out of work.
Regulatory Policy (how we party with other nations!)
Labor Laws: Decisions about minimum wage, workplace safety, and other labor laws might be influenced by current employment rates. For instance, there might be resistance to increasing the minimum wage during periods of high unemployment for fear it could discourage hiring.
Trade Policy: High unemployment might influence trade policy decisions, such as the imposition of tariffs to protect domestic industries and jobs.
Local and State Decisions (how much pie your city gets)
Local Initiatives: Cities and states may introduce job-creating initiatives, such as public works projects or incentives for businesses to relocate, based on local unemployment data.
Budget Allocations: State and local governments might adjust budget allocations, directing more funds toward employment services or social welfare programs during times of high unemployment.
Unemployment data is just one piece of the puzzle, but it is a crucial one. Policymakers use it alongside other economic indicators to make decisions aimed at maintaining economic stability and improving the well-being of citizens.
Bad data in….bad data out!!!?
Small businesses account for almost half the current employment in the US. What is harder to track are the independent contractors, side gigs and “non-surveyed” businesses/people. Technology has changed and altered how/when we work, the data produced, and the speed of collection. The policy making needs to catch-up to the future. I mean…. it’s not like we don’t have the compute power, intelligence and ability to make some drastic changes. The US is one of the most technologically advanced societies in the world.
So, the question remains…..should policy makers have broader business transactional backgrounds in addition to broad economic schooling backgrounds? Should we find better ways to collect labor data? IS this even possible with large free economies? Too many questions and not enough solutions.
What about contingent workers? —those who do not have a long-term, stable work relationship with an employer and often work on a project-to-project basis—are a unique category when it comes to unemployment statistics. In the United States, these statistics are “primarily” gathered by the Bureau of Labor Statistics (BLS) through the Current Population Survey (CPS). Here is an example of your tax money at work explaining what you already know…..
Here's how contingent workers are typically accounted for by the SURVEYS!!:
There are even Special Surveys!!
The BLS conducts specialized surveys, like the Contingent Worker Supplement, to gather more detailed information about contingent and alternative employment arrangements. However, this is not done regularly, so it provides only periodic snapshots rather than ongoing data.
The unique and variable nature of contingent work can make it challenging to fully capture this segment of the labor force. Policymakers and researchers often rely on specialized studies and additional metrics to better understand the complexities of contingent work and its impact on the labor market.
So, when you get the survey…. here is the guide…. don’t forget to pick up the call…the FED is dependent on it!!
“The U.S. Census Bureau conducts the household survey for BLS. Census Bureau interviewers contact households by telephone and in person and ask questions regarding the labor market activity of household members during the previous calendar week.”
With society fixated on shorter news cycles, most don’t pay attention to the revisions from previous months. The numbers are always changed and wrong…and they can be easily manipulated or massaged depending on the person reviewing the data as well as the data collection sources…...!! So……. this also makes you wonder about nationally published articles across the nation regarding shortages of workers and shortages of tech talent…….is this really the case?? Is this where they get the data from? Sounds kinda fishy to me…. :)
I’m sure there are niche areas with needs, but whole industries…. whole cities…. whole states and countries!!?? Are there really that many job openings? Browse any company site, indeed.com, LinkedIn, its sure matches the rhetoric of open positions…. BUT are the companies actually hiring? Or are they recycling jobs and just refreshing positions with lower salaried workers?
Common Sense
The reality may be closer to common sense. We have plenty of people to fill jobs. Some can be trained…some can’t. Some people prefer to be independent and do project-based business. Some people want to start their own businesses. Some businesses may be looking for that magic mix of “diversity.” Some will be able to do what they like. Some will not have the choice.
We have the people to solve the reporting problems. We have the technology to enable the solution. But, do we have the leadership to pave a new mission for benefit of something greater than ourselves?
TJ
"Big government is a disease for which it pretends to be the cure." Milton Friedman.