Wednesday, September 28th, 2016

Fixing the BLS estimates and finding more jobs

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The MacIver News Service reported yesterday on an increase in the jobs numbers for Wisconsin after the Bureau of Labor Statistics (BLS) finally adjusted their benchmark process.

The Senate Committee on Economic Development and Local Government held a joint hearing with the Assembly Committee on Jobs, Economy and Mining on Tuesday to discuss economic indicators in Wisconsin.

Secretary Reggie Newson, Department of Workforce Development, and John Koskinen, Chief Economist for the Department of Revenue, both gave testimony that Wisconsin is heading in the right direction.

This is in contrast to two years ago where Wisconsin had lost over 150,000 jobs, Newson explained. “Based on all the indicators we look at, the state is moving in the right direction. We are adding jobs here in the state of Wisconsin.”

Koskinen’s testimony and power point presentation showed that the Bureau of Labor Statistics was previously using data with a second quarter benchmark to provide statistics for job losses or gains. BLS found that this data was not accurate, and revised the system so that it reviewed nine months worth of data instead of just six. With the revisions, Koskinen explained that in 2011 and 2012 Wisconsin had actually gained jobs, which is in contrast to the previous reports.

Koskinen also stated that Wisconsin has consistently had a lower unemployment rate than the United States average, and pointed out that initial Unemployment Insurance claims in the state are now lower than pre-recession levels.

The Democrats took a “see no good news, speak no good news” approach and attempted to dishonestly claim Governor Scott Walker’s administration was trying to “politicize” and cook the numbers.

“I just want to remind everyone sort of the danger of politicizing economic development decisions,” said Representative Gordon Hintz (D-Oshkosh). Hintz questioned why BLS numbers were acceptable in the early 2000’s when jobs were good, but now the administration is trying to change them.

I suggest Hintz go get a massage and calm down. I’ve written previously about Newson’s efforts, along with officials from other states, to try to get the BLS to improve their numbers.

However, as dismal as the numbers looked, Wisconsin officials again criticized the method used for benchmarking the survey. The BLS uses two quarters to revise, or “benchmark,” the survey. Wisconsin officials believe that three quarters should be used, as it was until 2011.

In a letter to the BLS, Secretary Reggie Newson wrote, “Regrettably, we continue to see indications that the 2012 CES series for Wisconsin- which as you know is affected by the previous benchmarking -continues to deviate from other economic indicators. The first opportunity to rectify this won’t be until the next round of benchmarking in early 2013. We strongly believe the integrity of the CES data series would be dramatically improved if the BLS were to use three quarters of data for its next benchmarking process, as was the practice prior to 2011. Based on feedback from other states, we are not alone in this belief.”

As Newson’s letter indicates, Wisconsin is not alone in this belief. Minnesota officials have also been critical of the monthly BLS numbers. In an interview in May with Minnesota Public Radio, Steve Hine, the director of Labor Market Information for the Minnesota Department of Employment and Economic Development (DEED), said he estimated the CES numbers Minnesota saw in April were 40,000 jobs short.

“So there’s been this growing doubt. In Minnesota, you know this is a rough ball park estimate, we seem to be 40,000 jobs short by this survey compared to this full count that we’re starting to see, and that’s the situation in Wisconsin.”

Democrats know this, or should know this, and they’re just playing politics. Well, maybe one Democrat is too stupid to understand Walker can’t just make up employment numbers that are actually issued by the federal government.

Representative JoCasta Zamarripa (D-Milwaukee) ended the testimony by once again questioning the validity of the revised jobs numbers. Zamarripa said the administration was politicizing the numbers for their benefit, bringing up the release of revised data three weeks before the recall election of Governor Walker.

Chief Economist Koskinen corrected Zamarripa about the revisions stating that, “The revisions that we are speaking to were the revisions by the Bureau of Labor Statistics. They are not a product of Wisconsin.”

Unless Zamarripa believes Walker and President Barack Obama are in some sort of conspiracy together, she should know that the numbers that were released before the recall election weren’t made up, either. But never underestimate the strength of stupidity borne of willful ignorance in pursuit of political gain.

So it looks like Newson’s efforts to get corrected numbers are finally paying off and we’re seeing corrected numbers. The entire PowerPoint presentation is available online.

http://static.maciverinstitute.com/3.26.13%20Jobs%20Briefing.pdf

Not the numbers the Walker Administration hoped for, but certainly better than what was previously thought. The numbers also mean that Wisconsin is no longer 44th in job creation, although administration officials did not have the specific ranking when they testified. Now we’ll see if the 2013 jobs numbers continue the trend upward.

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