July’s jobs numbers reflect, in part, expected losses related to the census winding down. But the fact is, we’ve now added private sector jobs every month this year, instead of losing them, as we did for the first seven months of last year. And that’s a good sign.
President Barack Obama, August 6, 2010
In July 2009, unemployment was 9.4%. There were 14.5 million Americans unemployed. In July 2010, unemployment was 9.5%. There were 14.6 million Americans unemployed. That’s a bad sign.
Civil Candor, August 8, 2010
Democrats are getting in their licks on a Senate webpage entitled “The G.O.P. Job-Killing Agenda,” mimicking Republicans’ use of a similarly-phrased slogan. In the event there is confusion over exactly what “agenda” is being referred to, given that Democrats are calling the shots with House and Senate majorities and one of their own in the White House, the vexation comes from GOP reticence to support Democratic job creation initiatives, particularly the current Small Business Jobs Bill.
Defending against another bad employment report, Dems are fighting back by misrepresenting their job creation successes. If we are to believe their figures, the biggest success comes from the HIRE Act, which had a “positive jobs impact” of 5,600,000 jobs from March 2010 – July 2010.
The figure comes from a July 12, 2010 Treasury Report showing that 4.5 million employees were hired from February 2010 – May 2010, and that the jobs were offered by employers eligible for HIRE Act tax credits . When the Hire Act was passed, there was considerable debate over whether tax credits would spur hiring by employers not already planning to add headcount. Eligible employers receive an exemption from Social Security taxes paid for new employees, and a deferred $1,000 credit when they file their taxes next year. Given that average private employer compensation cost is $29.71 per hour per employee , or over $60,000.00 per year, these incentives may be insufficient to generate hiring, and may only benefit employers who would have hired anyway. Treasury admits that assessing the success of the HIRE Act will have to wait until 2011 tax returns are filed.
The recession has turned the monthly release of the Bureau of Labor Statistics’ employment figures into a media event, but there is another BLS report that sheds light on Democratic claims of job creation. The “JOLTS” Report (Job Openings and Labor Turnover Survey) tells us how many jobs are available each month, how many openings are filled, and calculates the resulting hiring and job opening rates.
It turns out that private sector hiring rates have not fluctuated a great deal since January 2009. In fact, the national hiring rate was higher in January 2009, before the passage of the Recovery Act, than in May 2010:
|Month||Hiring Rate |
The story on the rate of private sector job openings is not much different, with almost no change from January 2009 – March 2010, and a very slight change in April 2010 and May 2010:
|Month||Job Opening Rate |
*May 2010 is the most recent month for which data is available.
The “Job-Killing Agenda” webpage directs visitors to a video that asks “Are Republicans Concerned About Our Economic Recovery? or Recovering Senate Seats.” This begs the question of why the two goals should be mutually exclusive. For both parties, the issue is either retaining or gaining Congressional seats, and job creation will have a decisive impact on who stays and who goes in November. The burden of proof is on the Democrats, because they are the majority party. If they can do a better job, and they can prove it, then they deserve to stay.
The numbers speak for themselves. So far, all Democrats are doing is talking.
1..Estimates of Newly Hired Employees Eligible for the Hire Act Tax Exemption. July 12, 2010.
2..Employer Costs for Employee Compensation – March 2010. Bureau of Labor Statistics. June 9, 2010.
3..The number of hires during the month divided by the number of employees who worked during or received pay for the pay period that includes the 12th of the month. Source: Bureau of Labor Statistics Glossary.
4..The number of job openings on the last business day of the month divided by the sum of the number of employees who worked during or received pay for the pay period that includes the 12th of the month and the number of job openings on the last business day of the month. Source: Bureau of Labor Statistics Glossary.