May 12, 2012
Dispatches (XXI): Governor Walker only 244,100 Short of 250,000 New Private Sector Jobs by 2015!
Gov. Scott Walker recommitted Saturday to his pledge to create 250,000 private-sector jobs by 2015, a promise all the more difficult to achieve since he first made it because of anemic job growth during his tenure.
In my April 30th post, which addressed Governor Walker's fears that Wisconsin net job creation would go negative if he lost the recall (despite the fact that reported net job creation was already negative), I included this graph:
Figure 1: Wisconsin private nonfarm payroll employment from BLS March 2012 release (blue), from BLS November 2011 release (teal), and projections from Wisconsin Economic Outlook (October 2011) (red), in 000’s. NBER defined recession dates shaded gray. Vertical line at 2011M01. Sources: BLS, Wisconsin Economic Outlook and NBER.
As of March, private employment is 34,000 below the October 2011 forecasted level.
Several individuals have pointed out difficulties with the state level CES based employment series. Tim Duy, Joshua Lehner, and reader Tom have helped me understand the tentative nature of the CES-based numbes. They pointed me to the contrasting figures coming from the Quarterly Census of Employment and Wages, which suggest private employment would have continued to rise through September 2011 (the extent of QCEW data). However, interestingly, over that same period, the household series suggests sideways movement in overall employment.
Should employment be re-benchmarked up, the subsequent trend in recorded private employment would still put employment below the forecast from the October 2011 Economic Outlook.*
* Procedure: Seasonally adjusting the QCEW data, then using a regression estimated over 2009M06-2011M06 to extrapolate 2011M07-M09, then adding recorded changes in private employment from CES over the 2011M10-2012M03 period.
Update, 5:25pm Pacific
Here is a graph with the implied path of private employment, given Governor Walker's 250,000 net private jobs objective.
Figure 2: Wisconsin private nonfarm payroll employment from BLS March 2012 release (blue), projections from Wisconsin Economic Outlook (October 2011) (red), and implied path for employment given 250,000 net job increase by 2015M01 (green), in 000’s. NBER defined recession dates shaded gray. Vertical line at 2011M01. Sources: BLS, Wisconsin Economic Outlook, NBER, author's calculations.
Update, 5/13, 3:35pm Pacific Open question: why has the Wisconsin measured labor force shrunk (0.2%) while the US labor force has increased a percentage point? An interesting observation to keep in mind when looking at the WI unemployment rate.
Update, 5/15 8pm Pacific: Rumor has it that the Walker Administration will release their own employment series.  , based on other indicators. Interesting fact: Wisconsin ranked 50th out of 50 in 2011Q3-2011Q4 personal income growth.  (Table 6)
Posted by Menzie Chinn at May 12, 2012 01:19 PMdigg this | reddit
Menzie, the election is coming up, and it must not look good for your side.
Posted by: CoRev at May 12, 2012 01:45 PM
Unlike the rest of the country under Obummer, Wisconsin is actually creating jobs thanks to our great Governor.
Posted by: I Love Scott Walker Thanks at May 12, 2012 02:35 PM
So "Wisconsin is actually creating jobs thanks to our great Governor." My first reaction was that this had to be a piece of ironic satire, but since it looks like it might have come from some Walker hack using state email servers I have to assume it's serious. In any event, Scott Walker's lover lacks basic math skills. In Jan 2011 total nonfarm seasonally adjusted employment in Wisconsin was 2,744.8 thousand. The latest for March 2012 puts that number at 2,730.6 thousand. In what world is 2730.6 a bigger number than 2744.8?
Posted by: 2slugbaits at May 12, 2012 03:11 PM
I guess Co Rev must have some trouble with math too
Posted by: Robert hurley at May 12, 2012 07:17 PM
kinda ironic: i added up the reported net worth of Walkers 25 or so wealthy donors and they could create 250,000, $50k/yr jobs and still have billions of $ leftover. maybe if they invested as money in Wisconsin instead of giving 500k at a time to his campaign, he might actually succeed.
Doesn't it bother anyone in Wisconsin that a lot of these donors don't even live in Wisconsin? One lives in CA, and I hear the Templeton are Pittsburgh Steeler Fans, not cheeseheads.
what a corrupt system.
Posted by: dwb at May 12, 2012 08:01 PM
Wait! Menzie, I thought you were a big lover of adjusting for those no longer participating in employment. I would have thought you would appreciate the numbers from the BLS:
Based on unemployment insurance claims and a monthly survey of 1,400 households, BLS said Wisconsin’s seasonally adjusted unemployment rate for March was 6.8 percent, down slightly from January and February, and down from 7.6 percent in March 2011.
The unemployment rates encompass Wisconsinites who are available for work and actively seeking jobs and are generated by BLS from Wisconsin household surveys and other input.
The U.S. seasonally adjusted unemployment rate was 8.2 percent, down slightly from 8.3 percent in February and 8.9 percent in March 2011. Wisconsin unemployment rates remain below the national rates and, through February, below rates of other major manufacturing Midwest states including Illinois, Indiana, Michigan and Ohio.
Now Menzie, I know you would never want to be guilty of using different methods of calculation just to support a political position when comparing the results of President Obama with the results of Governor Walker.
Posted by: Ricardo at May 13, 2012 06:21 AM
Ricardo: You have two (and a half) non-sequiters in your comment. First, I have mentioned the adjusted for discouraged workers unemployment rate twice in all my posts, once tangentially and once citing a data series "like" that series. Second, all the data you mention don't take into account discouraged workers. Third, this post doesn't mention at all the unemployment rate. All I can conclude is that you don't understand the construction of the data I am referring to in this post. Which is not unusual.
Posted by: Menzie Chinn at May 13, 2012 08:09 AM
Applying the same bogus "saved jobs" standard to Scott Walker that Menzie and the slugger (with a 0 batting average) constantly apply to Obama's claim that his stimulus would CREATE 3+ million jobs within 2 years of passage of ARRA, I bet Walker would be doing fine.
Posted by: Robert at May 13, 2012 08:27 AM
Robert: To my knowledge, the Walker Administration did not provide a baseline scenario with which to compare against.
Posted by: Menzie Chinn at May 13, 2012 09:17 AM
Robert First, the Administration did not claim that ARRA would "CREATE" 3 million jobs within 2 years of passage. The Administration said that ARRA would "CREATE OR SAVE" 3 million jobs within 2 years. Kind of an important difference. Second, obviously you're a Fox News addict and therefore unfamiliar with independent verification of facts, so let me help you out. Here is the CBO's latest analysis of the effects of ARRA. I suggest you review the data in Table 1:
Posted by: 2slugbaits at May 13, 2012 09:50 AM
Actually, the ARRA and Walker arguments are good comparisons, because the U.S. is now gaining private sector jobs at a rate of about 2 million + a year, while Wisconsin is losing jobs.
In fact, the graph Menzie isn't showing you is the one that shows Wisconsin has lost 65,000 jobs because of Walker's policies. This is easy to prove because merely keeping pace with the rate of growth of the U.S. would have Wisconsin gain 51,000 jobs since Walker took office (and nearly 58,000 in the private sector). Instead they've LOST 14,000 overall and only gained 800 in the private sector.
Even more remarkable, the rest of the Midwest has had above-trend job growth in the same time period. As an "economic growth" policy, Walker austerity HAS UNQUESTIONABLY FAILED.
Posted by: Anonymous at May 13, 2012 01:37 PM
These conversations remind of this joke:
Guy approaches a woman in a bar and asks, “Would you have sex with me for a million dollars?” She says, “Yes.” He says, “What about fifty dollars?” and she snaps, “What the hell do you think I am — a whore?” He replies, “We’ve already established that you’re a whore; now we’re just negotiating the price.”
The original promise was that Walker policies would make Wisconsin better than other states. Now the conversation is whether Walker policies are better than awful. We've already established the promise was a lie. Now we're just negotiating.
Posted by: jonathan at May 13, 2012 03:04 PM
Third, this post doesn't mention at all the unemployment rate. All I can conclude is that you don't understand the construction of the data I am referring to in this post. Which is not unusual.
I understand the constructions just fine. The fact that you did not meniton the unemployment rate is just my point. The bigger issue is your motivation.
Posted by: Ricardo at May 14, 2012 04:28 AM
Ricardo - another sloppy attempt to muddy the water around the issue at hand. The point is that Walker's record on JOB CREATION in the PRIVATE SECTOR is lousy. If you want to try to bash Obama's record then I will counter with the following: Obama's PRIVATE SECTOR JOB CREATION is better than Walkers', and both Bush Presidencies' first 3.5 years. Simply put, Walker's job creation policies are failing so far - that's the topic of conversation here. Case closed.
Posted by: Ettaroo at May 14, 2012 07:41 AM
Ricardo: Governor Walker made reference to the 250,000 job creation number; my post was on job numbers. That seemed a reasonable delineation for the post. I could write a paper on the general subject of Governor Walker's economic stewardship, but I have a day job, and this is a blog. But if you are interested, you should consult the data (links are in the blog), and analyse the CPS data sets yourself, and post a comment on what you find.
Posted by: Menzie Chinn at May 14, 2012 07:45 AM
And yet the people of Wisconsin seem inclined to keep Scott Walker.
It's as if they don't like pension fund fatcat union goons or something.
Posted by: W.C. Varones at May 14, 2012 09:19 AM
slugs ---- if you can't CREATE jobs dream up a new criterion, saved Jobs. What a hoot! If it's good enuff for a clown like Obama (and Romer), it's good enuff for Walker.
Fox News --- what BS as response.
Posted by: Robert at May 14, 2012 03:42 PM
Robert The benchmark was jobs created or saved. That was the benchmark from the beginnng. I can't help it if you feel cheated because the Administration didn't say what you wished they had said, but there it is. Next time pay attention to the facts. BTW...what did the CBO report say?
Ricardo That poll was bought and paid for by a consortium of manufacturing executives, so you might want to cool your enthusiasm. Most legitimate polls have the race a dead heat. Still, voters are nitwits so there's no telling what they'll do. You said voters don't like pension fund fat cat union goons. I don't know where you get these "On the Waterfront" stereotypes, but they make you look silly. It might be more realistic to point out that one reason Walker could win is that voters like to renege on promises. Voters like you for instance.
Posted by: 2slugbaits at May 14, 2012 04:02 PM
Slug -- you mean the CBO that reported Obamacare would reduce the deficit! ROFLMAO.
Only in the make believe world of you shills for Obama does jobs 'saved' have a ring...
Keep larding it up though....
Posted by: Robert at May 14, 2012 07:13 PM
I did not mention a poll. The only numbers I mentioned were BLS numbers. Do you have me confused with someone else?
Posted by: Ricardo at May 15, 2012 05:31 AM
I just created an unemployment graph using fredgraph for Wisconsin, Ohio, Illinois, and the United States, http://research.stlouisfed.org/fredgraph.png?g=7eN , and I am not sure I would be complaining too much if I lived in Wisconsin. Although Menzie correctly points out that the job creation in Wisconsin is pretty anemic, both Wisconsin and Ohio unemployment rates are below the national average. Unfortunately most of the future job gains in Wisconsin and Ohio will probably come from job losses in other states such as Illinois. As long as Illinois's unemployment rate is above the average and their government financing remains a mess, healthier states will be successful at poaching jobs.
Posted by: Bill Huber at May 15, 2012 10:02 AM
Bill Huber: As I've pointed out on several occasions, there is essentially a WI fixed effect where the measured unemployment rate is below that of other states in the region. Once you take that into account, the picture changes somewhat.
But more generally, I eschew placing too much reliance on the unemployment rate because it is the ratio of two variables; hence changes can come from two places -- changes in the measured labor force or changes in measured number of unemployed. Well, let me just observe that since 2011M01, the labor force has stayed just about constant, while population has increased. Think about that for a while.
Posted by: Menzie Chinn at May 15, 2012 12:16 PM
Ricardo You are correct. My comment was directed at W.C. Varones, although I'm sure you can understand how I managed to confuse the two of you. The phrase "peas of a pod" comes to mind.
Posted by: 2slugbaits at May 15, 2012 02:15 PM
I understand your confusion but you perhaps do not know that I put about as much weight in polls as I do on econometrics. Neither mean anything without context, but both are used in isolation to justify horribly destructive policies.
Posted by: Ricardo at May 16, 2012 07:07 AM
I no longer live in WI. I have enough trouble trying to discern what Sacremento is doing. However, I just returned from WI where I serve on a board. That company, which could not entice displaced workers to commute, is adding jobs by recruiting and training workers to fill its needs. For every 12 that begin the training, 8 complete it and get jobs. I recently learned that one of the reasons that the company can afford this fairly aggressive and expensive process is that WI subsidizes traing skilled workers. The number approximates 25% of the cost of those who succeed. I do not know, but was informed that this is a Walker policy. It will assist at least 35 previously low skilled people to obtain high paying manufacturing jobs. 35 may be a small number, but I know this is happening in another company too. If enough of this happens it will help a lot. It is slow. But, I have to say that I like THIS policy.
Posted by: JLR at May 16, 2012 11:31 AM
What? All Hispanics look alike?
Posted by: W.C. Varones at May 16, 2012 05:24 PM
W.C. Varones, The economist Ricardo was English. Based on yours and the poster Ricardo's comments I would have assumed you were both Austrian.
JLR Another structural answer to a cyclical problem. Job training is great, but so is education and Walker's record there is not so hot. And job training isn't much good as a macroeconomic policy when the core problem is weak aggregate demand. Job training programs do not create jobs, they simply fill them. If Walker and his fellow conservatives think they can fix the aggregate demand problem with job training programs, then they don't understand the root problem.
Posted by: 2slugbaits at May 16, 2012 07:28 PM
@dwb, I love your suggestion that Walker's wealthy donors spend their money actually creating jobs thus helping him achieve his goal of 250,000 jobs. The problem is that these donors don't really care about the middle class making a living or our jobs. Citigroup coined the word for it: plutonomy, which Bill Moyers defined correctly as,"an economic system where the privileged few make sure the rich get richer and that government helps them do it. Good luck finding a job in Wisconsin if Walker gets re-elected.
Posted by: victoria at May 21, 2012 08:13 PM