This week’s “Daily Journal” guest columnist is Don Carrington, Executive Editor of Carolina Journal.
RALEIGH — When the North Carolina Employment Security Commission released employment statistics for June, Democratic Party leaders and left-leaning pundits were quick to use ESC’s press release to blame Republican budget cuts for a monthly decline of 7,600 state government jobs, even though the new budget didn’t take effect until July.
ESC’s press release read as follows:
“North Carolina’s unemployment rate was at 9.9 percent in June. Government jobs decreased by 10,200 in June, including 7,600 in state government. This includes jobs lost in community colleges and universities. In comparison to the same time last year, there has been an increase in [unemployment] claims in state and local government. This is largely due to an increase in claims in both local and state education.”
But in fact, the 7,600 figure was an estimate, adjusted for variations in employment in a host of job classifications that occur normally at the same time every year (“seasonally adjusted”). The actual estimate suggests a loss from May to June of about 40,000 government jobs and a gain of about 20,000 private-sector jobs. Public university, community college, and local education jobs occupied by employees on summer break are counted as jobs that were lost, even if those employees return later that month, at the end of the summer, or some other time.
Did 7,600 actual people in state government lose their jobs in June? No one knows for sure. Did the 2011-12 state budget cause any government job losses in June? Hardly, because it did not take effect until July 1. It’s just as plausible to argue that the budget Gov. Bev Perdue had administered over the past two years caused those job losses.
So what is really going on here?
The numbers are estimates, subject to numerous quirky variables and often are revised — sometimes significantly — well after some commentators have delivered their definitive analysis.
How do I know? Prior to joining the John Locke Foundation in 1995, I served as deputy director of the ESC’s Labor Market Information Division. I held that job for five years and became intimately familiar with the details behind the employment statistics that ESC released every month. My division was a contract numbers gatherer for the BLS, the nation’s official employment statistics agency.
In my role at ESC, I often responded to inquiries about the numbers from reporters, researchers, and officials from Gov. Jim Martin’s administration. One of the key insights I shared with those folks was that they should not be too quick to draw conclusions from monthly changes.
Good luck with that. When ESC released the June numbers on July 22, the left-leaning N.C. Budget and Tax Center was quick to react to the state’s (estimated) rise in the unemployment rate from 9.7 percent to 9.9 percent.
“We draw a direct line between this rise in unemployment and the loss of public-sector jobs,” said the center’s director, Alexandra Forter Sirota. “As state job losses continue to mount, we will likely see more pronounced economic effects throughout North Carolina,” she added in her organization’s press release.
Democratic Party leaders were quick to agree with Sirota’s “direct line” to state budget cuts. “The responsibility for this jump in unemployment rates rests squarely on the shoulders of the Republicans and their budget,” state Senate Democratic leader Martin Nesbitt told the News & Observer. “The Republican budget led to the direct firing of 7,600 people in June,” said House Democratic leader Joe Hackney to the N&O.
An Associated Press story included the reaction of state Democratic Party Chairman David Parker. “This negative lurch is the responsibility of those who would compromise those jobs. The people who would compromise individuals’ employment for political gains, this is just unacceptable public policy,” Parker told AP.
Chris Fitzsimon of NC Policy Watch wrote, “The Employment Security Commission reported Friday that the layoff of 7,600 teacher assistants, university employees, and other state workers had pushed the unemployment rate to 9.9 percent, up from 9.7 percent in May.”
Remember: The ESC’s estimates were made before the new budget became law. Fitzsimon and the other commentators were wrong.
I talked with ESC spokesman Larry Parker about the latest numbers. He told me that in the education services category, ESC had 1,652 unemployment insurance claims last June compare to 2,089 this June. So what does this mean? He doesn’t know for sure, and neither do I.
“I think while we did see some added loss in the state government sections compared to last year, education, state government, and local government changes will be best analyzed over the next few months,” he said.
I agree with Parker because I know the estimates are not reliable enough to draw conclusions from one month to the next.
The numbers come from two separate employment statistics programs managed by the BLS. The unemployment rate comes from a U.S. Census Bureau national monthly survey for BLS of 60,000 households, with about 1,500 of them in North Carolina.
The count of jobs comes from the Current Employment Statistics program. It is based on a sample of employers. I contacted Jason Chute, a BLS official in Washington, seeking access to the monthly reporting data from North Carolina government agencies. He said that due to a “confidentiality agreement” with all survey participants, BLS would not release the raw data and would not even identify the government agencies.
ESC also has access to the BLS raw data on government employment, but spokesman Parker maintains that his agency is unable to share it with me, Sirota, Fitzsimon, or anyone else.
It’s odd that ESC would try to hide behind a confidentiality agreement between the state and federal governments over information that should be public under the state’s Public Records Act.
North Carolina most likely will show a decrease in the number of government jobs, currently estimated to be about 700,000. But as the economy recovers — and it will, at some point — the number of private-sector jobs should grow even more than the loss of any government jobs. That job growth should result in a decrease in the unemployment rate.
Commentators who don’t understand the jobs numbers, or how they’re derived, simply should refrain from commenting on statistics they don’t understand.