Opinion: Media Mangle

Are Government Jobs Up or Down, and by How Much?

ESC reports government lost 2.5 times more jobs when Perdue, Dems were in charge

RALEIGH — Did you hear the good news? Today, the state Employment Security Commission reported that North Carolina’s unemployment rate fell slightly, from 10.4 percent in June to 10.3 percent last month. Moreover, local education agencies added 2,900 jobs over the past year, as employment in school districts rose from 129,400 in July 2010 to 132,300 last month. Even during a recession and notwithstanding a tight budget climate in Raleigh, the employment level at K-12 schools remained steady.

Over the past 12 months, local government employment (including public educators) stayed fairly stable as well, dropping slightly from 348,600 last July to 347,900 last month — a scant 800 jobs lost.

Wait, that’s not what you heard? You say the news reports said the rate rose from 9.9 percent to 10.1 percent. And that 11,000 government jobs were lost, with a majority of those cutbacks from teachers.

If you look at numbers that are not seasonally adjusted, the monthly rate actually dropped from 10.4 percent to 10.3 percent, while the number of government jobs fell by a much larger amount — 77,700.

The numbers that were reported widely, perhaps as a somber soundtrack moaned in the background, also came from ESC. And for all practical purposes, they’re a guess, perhaps a wildly inaccurate one. They came from a series of estimates that have been “seasonally adjusted,” based on yet another guess of how many people should have been working in a normal economic environment.

Because so much of the jobs data result from surveys, estimates, and computer modeling — including that mysterious factor of “seasonal adjustment” — it’s important to note that a single month’s report is merely a snapshot, often a fuzzy one, of an ever-changing job market. Besides, the information in today’s release will be revised, perhaps significantly, in the coming weeks, possibly negating any conclusions you could draw from what we know now.

It’s unfortunate when astute observers of state government draw sweeping conclusions from data that is, shall we say, squishy.

Take the drop in July’s unemployment rate to 10.3 percent I cited, along with the addition of 2,900 local education jobs over the past year. That’s a guess, too, though it’s one that was not seasonally adjusted. It came from an actual survey of government agencies and private employers, so it could be more credible.

To be sure, the same ESC report found not-seasonally-adjusted government agencies overall losing 77,700 jobs from June to July of this year, 70,000 of them in local education. (You can get the not-seasonally-adjusted data from the ESC’s site here.

Such a fluctuation in employment isn’t unusual. It happens every summer when schools are not in session. School buildings empty as teachers, custodians, cafeteria workers, bus drivers, principals, and other employees take well-deserved vacations.

A reporter could have concluded that when Democrats ran the General Assembly, local educators lost even more jobs. In 2009, jobs in local education (including teachers) fell by 72,700 from June to July, and last year they plummeted by a jaw-dropping 80,000! For some reason, the Democrats’ decimation of the education work force didn’t deserve headlines.

What’s the correct employment figure? Roughly 3,000 more jobs, 11,000 fewer, or a whopping plunge of nearly 78,000? No one knows. The government employment reports — both the “raw data” and the seasonally adjusted data — rely on a confidential survey of public agencies and are plugged into a secret economic model that the state’s number-crunchers refuse to share with the general public.

To get an idea of how unreliable the seasonally adjusted information can be, and how easy it is to manipulate for political gain, look back 12 months to the ESC’s August 2010 employment release (PDF download). In it, the agency noted a 0.2 percent drop in the unemployment rate, from 10.0 percent in June to 9.8 percent in July. The report also notes that government employment fell by 27,300 jobs — roughly 2.5 times the job losses the government experienced this year. But again, Democrats were in charge of things then, so those devastating numbers were no big deal.

That said, Gov. Bev Perdue was quick to use the current 11,000 number as a club to pound her Republican adversaries. At a speech to the Rotary Club of Asheville last night, she criticized the “new political leadership in the General Assembly” for cutting school spending.

How the governor learned what the ESC was going to report today is troubling, because no one is supposed to comment on that information until it is released formally to the public on the third Friday of each month. Perdue’s predecessor, convicted felon Mike Easley, took some heat seven years ago when my colleague Don Carrington reported that Easley had leaked ESC employment data to tout his economic agenda.

While what Easley did was not against the law (on that occasion), anyone leaking information from the federal Bureau of Labor Statistics, which partners with ESC for some state-level data collection and analysis, is subject to fines and jail time. And after Carrington reported the premature release of ESC data, Easley stopped leaking it.

As Carrington said last month, “Commentators who don’t understand the jobs numbers, or how they’re derived, simply should refrain from commenting on statistics they don’t understand.”

Or, to paraphrase Mark Twain, when you’re trying to make sweeping policy declarations using difficult-to-understand technical data, better to remain silent and be thought a fool than to speak and remove all doubt.

Rick Henderson is managing editor of Carolina Journal.