Lucas County sees lower unemployment rate, but what's the rest of the story?

The headlines read:

"Lucas County unemployment rate dropping"

"April’s jobless rates at lowest in over 10 years"

Yes, the unemployment rate in the county dropped to 5.7 percent, but that's not the lowest it's been and the drop really isn't due to people finding jobs.

The county is facing the same issue as the state, as I wrote at Ohio Watchdog. The statistic is easily manipulated by changing the number in the workforce.

As a commissioner, I rarely looked at the unemployment rate. Instead, I tracked employment - the number of people actually working - as I thought it a much better gauge of the health of the economy.

The last time Lucas County saw an unemployment rate this low was October 2006 when the rate was 5.4 percent. It was 5.6 percent in September and November that year.

But here's the catch: the number of people employed in October 2006 was 214,400.

The number of people with jobs in April 2014 was 192,400 - 22,000 less!

The loss of people in the workforce is even greater. In October 2006, there were 226,700 people counted. But in April 2014, there were only 204,100. That's a difference of 22,600.

To put that in perspective, that's more people than live in the cities of Maumee (pop. 14,129) or Oregon (pop. 20,291) or Sylvania (pop. 18,892).

So even though the unemployment is down, it's not because there are more people employed - it's because we have 22,600 who aren't being counted in the workforce. And the number of people with jobs is actually less.

Here's a chart showing the declining workforce and the historical employment numbers from January 2006 to April 2014:

As you can see, the number of people in the workforce has steadily declined, even as the number of employed fluctuates up and down, though still not reaching pre-recession numbers.

Certainly, loss of population, retiring baby boomers and others who are no longer counted in the workforce contribute to the declining numbers - but they cannot account for all of the drop. At least some of the loss of workforce is due to individuals who are no longer seeking work because they don't believe there are any opportunities for them.

The key is to understand how much of the loss of workforce is due to what factor.

So rather than celebrate or tout the declining unemployment rate, elected officials, policy makers and citizens should insist on good analysis to find out why the number of employed people has not returned to historic levels. This is a critical factor as the cities make long-term decisions about taxation and services.

Ohio House passes 'Shared Work' program

Press Release from the Ohio House:

“Shared Work” Program Passes Ohio House

COLUMBUS—The Ohio House of Representatives today passed House Bill 37, legislation that creates the SharedWork Ohio Program.

The program allows employers to reduce the number of hours worked by employees in lieu of layoffs. It also makes it easier for employees to avoid being laid off and to receive partial unemployment benefits.

“This bill gives more flexibility to employers and employees when assessing layoffs,” Speaker of the Ohio House William G. Batchelder said. “Rather than having to decide on a zero-sum scale, through the Shared Work Ohio program workers can still have the opportunity for partial employment. At the same time, this will reduce the strain on the state’s unemployment benefits system.”

Participating employers must submit a plan to the director of the Ohio Department of Job and Family Services. The plan must satisfy certain requirements and be approved by the department. Each plan takes effect on the date on which it received approval and ends at the end of the 52nd week after the plan’s effective date.

HB 37 now will go to the Ohio Senate for further consideration.

WSPD show recap - Sept. 26, 2012

Here are the links to the subjects we discussed Wednesday on 1370 WSPD:

* Bacon shortage?!? I'm stockpiling.

link to story

* Lucas County jobless rate lowest since '08 is headline in the local paper...but the actual numbers show something different:

Link to Ohio statistics website

Link to Ohio Labor Force Estimates

Employment numbers - not the unemployment rate - is the statistic we should watch.

205,900 was the Lucas County employment in May 2008.
192,900 was the Lucas County employment in Aug 2012.

Even though unemployment rate is low, there were 13,000 more people working in Lucas County back in 2008.

131,200 was the Toledo employment rate in May 2008.
119,800 was the Toledo employment rate in Aug 2012.

Even though there was only a difference of 200 in the number unemployed in Toledo when you compare May 2008 to August 2012, there are 11,400 people NOT working in August than were working in May.

The picture might be slightly better, but the headline is based on distorted numbers and the real truth of the job situation is revealed when you look at the number employed.

* Mayor Mike Bell doesn't like the presidential candidates bashing China in Toledo when he's holding an economic forum for dozens of Chinese investors on the same day.

Link to story

Note Councilman Joe McNamara's comment at the end of the story and then check out page 7 of this report from Ohio which shows that employment, compared to last year, in the categories of Motor Vehicles and Motor Vehicle Parts is down 1,400 and 1,000 jobs, respectively.

* With President Barack Obama touting his tariffs on Chinese tires, it's important t know it didn't really do anything to help the American tire market. The article has the details

Link to story

* Fritz Wenzel of Wenzel Strategies revealed the inside story about the latest New York Times/CBS/Quinnipiac poll which shows Obama leading Romney by 10 points.

Podcast of interview is available here.

Hugh Hewitt interviewed Peter Brown, assistant director of Quinnipiac Polls, who said that "it is probably unlikely" that Democrats will turn out to the polls in the margins at which they are reflected in the polls. Here is the link to the blog post.

* Jason Hart of Media Trackers Ohio talking about his investigations into the personal biases behind the so-call objective fact-checking that PolitiFact supposedly does.

Podcast is available here.

Additionally, I referenced a series being done by Ohio Watchdog that checks the fact-checkers at PolitiFact and finds much of it is fiction.

Here is the lastest post in the series, "OH: PolitiFact claim in Brown ad refuted by PolitiFact" with the earlier entries linked at the bottom of the story.

Thursday Show:

We'll talk about the letter Mike Rowe, Dirty Jobs, sent to Mitt Romney and what it means in terms of future jobs. Also, Andrew Marcus, the writer and director of the soon-to-be released movie, "Hating Breitbart."

Toledo should be cautious about May's unemployment rate

As an elected official, employment numbers were very important to me. Now that I'm out of office, they still are.

But it isn't the publicized UNemployment rate I pay attention to.

We get a better - and more accurate - picture of what is going on when we look at the employment rate and the number of people actually in the workforce.

Today's paper has an article about city revenues (more about that in a separate post) which mentions unemployment rates dropping:

Unemployment in Toledo was 8.5 percent in May, down from 10.2 percent in May, 2011.

"People are going back to work," finance committee chairman George Sarantou said.

"Not as fast as we would like but … clearly the unemployment numbers are dropping."

And yes, it is true that the unemployment rate has dropped from 10.2% in May 2011 to 8.5% this May.

But the employment numbers have barely changed!

According to Ohio's Labor Market Information web page, the number of people employed in the City of Toledo in May 2011 was 119,300. The number of people employed this May is 119,600. We have 300 more people at work this May than we did last May.

That does not equate to a near 2-point change in unemployment.

The key is the total number of people in the workforce.

There were 132,800 people in the civilian workforce in May 2011.
There are 130,600 people in the civilian workforce in May 2012.

Now, either we lost 2,200 people from our workforce or from the city itself. While I don't discount the fact that people are leaving Toledo, the more likely explanation is that the majority of those people are still here, still without a job, but just not being counted anymore.

For the sake of argument, let's add them back into the mix. If we include them in the labor force, our unemployment rate jumps to 9.9%. Still better than the 10.5% of last May, but nothing to tout.

Politicians can pat themselves on the back, give credit to others (presidents and/or governors) and use this as an indication of an improving economy.

But it's not an accurate picture - and decisions based upon the false idea that it is an accurate picture will prove very costly.

New website - Statehouse News Online

I wanted to let you know that Tom Blumer, BizzyBlog, and I have recently begun writing for Statehouse News Online. We'll both be doing regular posts, sharing information and perspective on items of interest within the state of Ohio.

Statehouse News is the brainchild of the Franklin Center for Government & Public Integrity, "a 501(c)3 non-profit organization dedicated to promoting new media journalism." They are the sponsor of the Citizen Watchdog training I've been talking and writing about (here and here), though they are not responsible for anything that appears on the Statehouse News site.

StateHouseNewsOnline.com is a collection of independent journalists covering state-specific and local government activity. StatehouseNewsOnline.com is the national leading news website dedicated to providing news from the nation’s state capitols. The news website networks with dozens of state-based news organizations to provide in depth coverage of state legislation, government & special interests, state budgets and political/campaign news.

The site contains both straight news reporting and commentary, often covering stories traditional media miss - or don't have the time to fully investigate.

My first post, "Ohio: Good marks in economic ranking, but still room for improvement," takes at look at how Ohio ranked in the recent Rich States, Poor States annual report.

Tom's most recent "Ohio employment: A tale of three cities," analyzes President Barack Obama's claim that bailing out the auto industry is the reason for the decreased unemployment in the state.

Yesterday, I took a look at the questions that should have been asked at an anti-gun press conference where Columbus Democrats called on a Republican to cancel her 'Shoot for Liberty' fundraiser at a gun club.

I hope you'll make Statehouse News a regular stop - and if you have a news tips or story that isn't getting the attention it deserves, let me know!

Reality check on unemployment

The most recent unemployment figure is 8.2%.

This is supposed to represent the number of people who are unemployed. 

But let's look at this another way.  If unemployment is 8.2%, it stands to reason that employment is 91.8%. (100-8.2)

Do you really believe that 91.8% of the American people are actually employed?

In December, I did a post, Unemployment rate vs. the number employed, where I explained how the unemployment rate can go down while the number of people with jobs could stay the same or increase.

At that time, the percent of people participating in the labor force (those who actually have jobs) was unchanged at 64%.

Rather than keep track of the unemployed - which doesn't include those who are without a job but have stopped (at least temporarily) looking for one - why don't we track the actual employment numbers?

They're much more accurate on a month-to-month basis and are more reflective of the work status of the nation.

Here are the recent Ohio Civilian Labor Force Estimates for Lucas County.

February 2012:
Labor Force:  210,500
Employment:  191,300
Unemployed:   19,200
Rate:     9.1%

January 2012:
Labor Force:  208,900
Employment:  189,300
Unemployed:   19,600
Rate:     9.4%

December 2011:
Labor Force:  210,700
Employment:  193,000
Unemployed:   17,700
Rate:     8.4%

November 2011:
Labor Force:  211,800
Employment:  194,100
Unemployed:   17,700
Rate:     8.4%

As you can see, our employment rate is varying between 189,000 and 194,000.  But the December unemployment rate was the same as the November employment rate despite the fact that more people were employed in November.  That's because the 'labor force' number decreased. 

By increasing and decreasing the labor force number, the unemployment rate can be manipulated.

Politicians are constantly talking about jobs.  They use declining unemployment numbers as an indicator of success, but the actual unemployment number is subject to manipulation and doesn't tell us what we need to know:  how many people are working.

They also use the 'jobs created' each month as another indicator, but that number, too, is subject to manipulation.

The number that would give us a good measurement is the number of people actually employed.  When that number goes up, we're doing well.  When that number goes down, we're not.

And we don't have to worry about doing any division or multiplication, though I expect that, sooner or later, some politician or bureaucrat would figure out a way to manipulate that as well.

Unemployment rate vs. the number employed

The December unemployment rate is out and - SURPRISE!!! - it's down to 8.5%. Isn't that just wonderful? Think of all the people who now have jobs.

Actually, the percent of people participating in the labor force (those who actually have jobs) was unchanged at 64%. So if the percent of people employed stayed the same, how did the unemployment rate go down?

These are just statistics and unless you truly understand what they're measuring and how they're calculated, it means little, especially if you're one of the people still without a job.

As a commissioner, every month I checked the employment information put out by the state of Ohio. What I found is that unemployment rates went up and down and, because they're a result of dividing two numbers, the better thing to watch was the actual numbers and not the calculations.

Ohio's report, Civilian Labor Force Estimates, lists the number of people in the labor force, the number of people employed and then calculates the number of people unemployed by subtracting the second number from the first. They then divide the number of unemployed by the total in the labor force and end up with an unemployment rate.

For November 2011, Lucas County had 216,600 in the labor force and 198,100 employed leaving 18,500 without work for an unemployment rate of 8.5%. December numbers have not yet been released.

Toledo is one of the cities that the state tracks. They had 142,400 in the labor force and 129,600 employed leaving 12,800 without work resulting in an unemployment rate of 9.0%.

But the state also has a search tool on their website where you can get these same numbers for the whole year - and that's where the numbers get interesting.

This chart (click for a larger view) shows the civilian labor force (CFL) for Lucas County for 2011:


You can see how the number of people in the labor market varies greatly over just a year.

This chart shows the number of people employed in Lucas County for 2011:

















Yes, there were roughly 5,000 more people working in November than there were in January of last year, but the November figure is less than the number working in the months of April, May, June, August, September and October.

And yet the unemployment rate for those six months was HIGHER than it was for November.

How can we have fewer people working and still have a decrease in the unemployment rate?

The only way the unemployment rate went down, despite having fewer people employed, is because the base number - the number of people in the labor force - went down, as the first chart demonstrates.

We went from a high of 221,900 in the labor force down to 216,600. And even though November had 200 less people employed than August (198,100 vs. 198,300), the unemployment rate dropped from August's rate of 10.0% to November's rate of 8.5%.

Clearly, a difference of 200 people actually working does not result in a drop of 1.5%. But it does if the base number (CLF) also goes down.

August:
220,400 Civilian Labor force
- 198,300 employed
_________
22,100 unemployed for an unemployment rate of 10.0%

November:
216,600 Civilian Labor Force
- 198,100 employed (roughly the same number as August)
_________
18,500 unemployed for an unemployment rate of 8.5%

See how easy it is to manipulate the unemployment rate simply by lowering or raising the labor force number?

This also applies to the national unemployment rate, since the rates are calculated the same way.

I realize this is a lot of numbers, but it's important to know how unemployment rates are calculated and what is behind the numbers. That way, you won't come to a wrong conclusion based only upon the results of the calculation (unemployment rate) or what the politicians and talking heads tell you it means.

After publishing this post, I found this article (posted after mine) which makes the same argument:

Real Jobless Rate Is 11.4% With Realistic Labor Force Participation Rate

One does not need to be a rocket scientist to grasp the fudging the BLS has been doing every month for years now in order to bring the unemployment rate lower: the BLS constantly lowers the labor force participation rate as more and more people "drop out" of the labor force for one reason or another.

Maybe we are starting to get it.

Why aren't we drilling in the Gulf?

Despite the fact that President Barack Obama has 'lifted' the moratorium put into place after the BP oil rig accident, there is no new drilling in the Gulf of Mexico. If the President is so keen to put people back to work, why hasn't the simple solution of granting permits been implemented?

As this video shows (HT BizzyBlog) the problem is the bureaucracy - we'd be drilling if the regulators could process the paperwork their own regulations require.

And people want to put government in charge of our health care!

'I'm just quitting': why there's no recovery and where the jobs are going

Thanks to Tom Blumer at BizzyBlog, I read this post by David McElroy, a writer and filmmaker in Birmingham, Ala., called "I'm just quitting': A scene right out of ‘Atlas Shrugged’ in Birmingham.

It's about a businessman - a job provider - who happens to have a permit to start an underground coal mine which will employ about 125 people. He attended a public hearing in an inner-city Birmingham neighborhood to hear what government officials, environmentalists and the public had to say about a proposed coal mine in their area. After listening for two hours to attendees and officials bash companies - actual job providers - he spoke. McElroy has his complete statement, but he finishes with this:

I got a permit to open up an underground coal mine that would employ probably 125 people. They’d be paid wages from $50,000 to $150,000 a year. We would consume probably $50 million to $60 million in consumables a year, putting more men to work. And my only idea today is to go home. What’s the use? I don’t know. I mean, I see these guys — I see them with tears in their eyes — looking for work. And if there’s so much opposition to these guys making a living, I feel like there’s no need in me putting out the effort to provide work for them. So as I stood against the wall here today, basically what I’ve decided is not to open the mine. I’m just quitting.
Thank you.

As if his statements weren't enough, you MUST read the comments on the post. Individuals sharing their similar stories of business men and women just saying 'no' to doing business - hiring people, purchasing supplies which leads to support jobs, paying taxes, creating a profit, contributing to their communities.

These are the stories media should be focused on. Rather than demonize people who want to (gasp!) pay people to work for them, we should be celebrating these job creators.

We should be encouraging them in their efforts and government should be asking how they can help - rather than looking for ways to shut them down, tax them more, impose more rules upon them and make them the source of all evil in the world.

Read the article and the comments - and then you'll know just how far from the American Dream we've actually come ... and then ask yourself what you're going to do to help put our country back on track.

Minimum wage jobs do not accomplish goal

As so many of us have said all along.... From the National Center for Policy Analysis:

The authors of a new study titled "Unequal Harm: Racial Disparities in the Employment Consequences of Minimum Wage Increases" state that it would be easy to say the high employment levels for young adults is an unfortunate byproduct of the recession, but you'd be wrong. The study demonstrates that increases in the minimum wage at both the state and federal level are partially to blame for the crisis in employment for minority young adults, says the Washington Examiner.

* Their study focuses on 16-to-24-year-old male high school dropouts, understandably a relatively inexperienced group of labor market participants.
* Among the white males, the authors find that "each 10 percent increase in a state or federal minimum wage has decreased employment by 2.5 percent; for Hispanic males, the figure is 1.2 percent."
* But for black males, "each 10 percent increase in the minimum wage decreased employment by 6.5 percent."

The authors compare the job loss caused by higher minimum wages with that caused by the recession and find between 2007 and 2010, employment for 16-to-24-year-old black males fell by approximately 34,300 as a result of the recession; over the same time period, approximately 26,400 lost their jobs as a result of increases in the minimum wage across the 50 states and at the federal level.

Why do young black males suffer unequal harm from minimum wage increases? The authors say that they're more likely to be employed in low-skilled jobs in eating and drinking establishments. These are businesses with narrow profit margins and are more adversely affected by increases in minimum wage.

Source: Walter Williams, "Minimum Wage Harms Those It Is Designed to Help," Washington Examiner, May 9, 2011. William Even and David Macpherson, "Unequal Harm: Racial Disparities in the Employment Consequences of Minimum Wage Increases," Employment Policies Institute, May 2011.

For text:

http://washingtonexaminer.com/opinion/columnists/2011/05/minimum-wage-harms-those-it-designed-help

For study:

http://epionline.org/studies/even_5-2011.pdf

Idle power plants or fish?

There is something seriously wrong when a news article about a local business deciding to idle a plant is celebrated because it means some fish won't die in the manufacturing process.

According to this article:

The Great Lakes region's $7 billion fishery likely will get at least a short-term benefit from FirstEnergy Corp.'s decision to temporarily idle three of its four Bay Shore operating units.

Tens of millions of fish die at the plant each year when all four units are running, most of them impinged against screens used to filter the water used by the facility.

The utility said it cannot predict how many fewer fish will die until it figures out how much less Maumee River water the Oregon power plant still will require for cooling.

FirstEnergy announced last week that one of its subsidiaries, FirstEnergy Generation Corp., plans to scale back operations at four plants because of the declining need for electricity during the recession, in large part because of less manufacturing.

Other jobs within FirstEnergy are being sought for displaced workers, the utility said.

No - this isn't a joke.

The 30-paragraph article never identifies how many employees are affected, though they tell us how many fish are estimated to be killed.

The solution, many local environmentalists tell us, for this same plant to build a $100 million (give or take) cooling tower. Of course, they think this is a perfectly acceptable price to pay for fish.

Personally, having lived on Maumee Bay all but the first 5 years of my life, I've not seen a change in the number of fish in Lake Erie and have not missed the "estimated" numbers they claim are being killed. I also know that, with politicians and all sorts of individuals claiming we have some of the highest energy rates in the state, I don't want to pay for a $100 million (give or take) cooling tower. While I care about fish, I don't like them that much.

I can't help but wonder if the decision on which plants to idle had anything to do with the latest push for a cooling tower at this plant. Is it possible that the parent company decided this plant just isn't worth the hassle they're having to go through? Or the potential cost they may be forced to incur because some people are upset about fish? Of course, the company denies that the issue of fish kills had anything to do with their decision...but do you really believe that? Would you factor such an issue into your decision if you were the one that had to idle some plants?

I can only imagine what the employees at this plant must think. The message is clearly that the fish are more important than their jobs.

And what is the message that other businesses in the area - or those considering coming to this area - will take from all of this? It certainly isn't good.

The problem is that there is no perspective. While I don't want fish to die needlessly, I would weigh the number of dead fish against the potential economic impact of maintaining the status quo. I'm guessing that the vast majority of energy customers would not be willing to incur the $100 million (give or take) cost of addressing what a small number of people consider important. Given a choice between paying more for their electricity or a few fish dying - my bet's on the cost, not the fish.

Unfortunately, too many on the environmental side do not care about what their desires cost. They seem to believe that no cost is too great for whatever their special interest may be. What they fail to realize is that our nation can afford to pay attention to the environment. Only wealthy nations can afford to invest real resources for the environment's sake.

The people of most nations, especially developing ones, are too focused on providing for daily needs to worry about whether or not their killing of an animal for food might lead to its extinction. They would find it inconceivable that anyone would put the needs of an animal above the needs of their own family.

The United States, however, has been prosperous enough to meet those daily survival needs and now has the luxury of paying attention to how our actions impact our environment. But if we put the needs of the environment ahead of our own, many of our citizens will see real and lasting damage to their quality of life, negatively impacting the health of their families.

There has to be a balance - not an emotional appeal that focuses on 'harm' to the environment or animals while ignoring the 'harm' to our families and our way of life.

Bankrupt unemployment fund means serious trouble for Ohio

On Friday I received a press release from the Republican members of the Ohio House about the continued high unemployment rates in our state.

It was a standard position statement: we've got ideas and we want the other party to heed them. But there was something very troubling in the last part of the release:

On January 12, 2009 Ohio ran out of money in the Ohio Unemployment Compensation Trust Fund, which provides cash benefits for unemployed Ohioans and is funded by employer payroll taxes. The state began borrowing from the federal government to continue making payments to unemployed Ohioans. To date, Ohio has borrowed approximately $2 billion from the federal government, which must be paid back in the future. Debt projections of this nature are expected to reach $3 billion by the end of 2010.

I remember hearing about the fund running out of money last year, but I didn't realize that it still had no money and was continuing to borrow to cover the expenses.

And I certainly don't remember any news articles about this growing debt.

So I did some research and came across a guest column issued by State Senator Karen Gillmor on September 17, 2009, wherein she details the problem with the unemployment compensation fund:

Lawmakers established the Unemployment Compensation Advisory Council to recommend legislation that ensures a sound and legal unemployment compensation program for Ohio. I was honored to be appointed to this Council earlier this year.

You can imagine my surprise when I learned at my very first meeting that a July 2008 report prepared by Dr. Wayne Vroman of The Urban Institute, which makes a series of recommendations to improve the fund’s solvency, went virtually unheeded. That’s right – the Council knew the fund was in trouble, sought advice on how to head off trouble, and then failed to implement a single recommendation made by the expert they hired.

As a result, the fund became insolvent early this year for the first time since the 1980s. Beginning January 12, 2009, the State of Ohio began borrowing from the Federal government to continue making unemployment benefit payments, a sum totaling nearly $1.2 billion to date.

In April, State Auditor Mary Taylor cautioned against uncontrolled spending given our precarious economic condition. According to her projections, the state could be facing a budget shortfall of nearly $8 billion by 2013 – a problem further complicated by the state of the unemployment compensation fund.

Fortunately, the Federal stimulus bill delayed interest payments on the monies borrowed for our unemployment fund. But Ohio must begin repaying the estimated $4 billion in January 2011, when the Federal government will resume charging interest. Speculation is that the unemployment situation may not improve significantly until 2014.

So we've borrowed billions from the feds, will have to repay the money - and begin paying interest on the debt in January.

The unemployment compensation fund 'taxes' employers and puts the money collected into a separate account to pay out benefits when individuals are unemployed. The problem is that Ohio is paying out roughly $3 billion a year in benefits, but only collecting around $1 billion in employer contributions (2009 figures).

This isn't the first time Ohio has borrowed from the federal government to cover a shortage in this fund. We did so in the 1980s and it took eight years to repay the interest and principle. This time around, however, Propublica reports:

Ohio has been operating its trust fund at dangerously low levels for years, entering the recession with less than two months of reserves. The state was one of the first to begin borrowing at the beginning of 2009, and employers face a small tax increase from $266 to $270 per employee, on average, for 2010.

And with the economy the way it is, the state cannot just triple the rates on the employers who are actually still in the state. That's a sure way to push them elsewhere and discourage other companies from locating here.

Any increase in employer costs will have negative repercussions for the state's economy. Employers cannot just pass along those costs to consumers who have already cut back on spending, meaning they must be absorbed by the company (lowering any potential profits) or offset by cuts elsewhere in the company - perhaps laying off others, who then begin to collect what isn't there, thus exacerbating the problem.

So while Ohio employers did see a rate increase for 2010, there was no change in benefits distributed to out-of-work individuals.

Historically, states have relied upon boom times to build up their funds with enough money to cover the busts. Ohio's economy, however, hasn't seen the same 'boom' as other states and our 'busts' seem to last longer, too.

The state really can't do anything about unemployment as government doesn't create jobs. But state legislatures can implement business-friendly laws and tax rates that allow companies to grow. The recent phased-in tax changes were certainly a step in the right direction - until the legislature decided to halt this year's phase of cuts. You see, the politicians decided that government needed the money more than we did, which is always a problem.

In the long term, Ohio faces the same situation as the federal government - you can only borrow for so long before the bill comes due. And when it does, someone - meaning you and me - will have to pay.

Sen. Schumer ups job losses exaggeration

I've previously written about President Barack Obama's misrepresentation of the job losses when he took office, but apparently, that exaggeration just isn't enough.

Now Sen. Chuck Schumer (D-NY) is upping the ante:

"Before the stimulus, we were losing 700,000, 800,000 jobs a month, a huge amount."

See? Now it's up to 800,000 jobs a month...

And the reason this number gets exaggerated? To make today's job losses look like improvements.

The problem is, they ARE improvements. To have 300,000 job loses is better than 400,000 or 500,000 from the months prior to Obama taking office. Everyone will agree that the numbers are still too high, but there's no need to distort the facts to try and paint an even 'prettier' picture.

Of course, they're also saying these numbers are an indication that government spending in the form of the stimulus is working, even though most of that money hasn't even hit the economy yet.

The problem with that scenario is clearly demonstrated by the similar 'cash for clunkers' spending. The minute the money ran out, so did the supposed 'stimulus.' But that just leads to calls for even more government spending by those on the left....a vicious downward spiral because, as Margaret Thatcher once said, eventually you run out of other people's money.

H/T Warner Todd Huston at Publius' Forum

Obama repeats false unemployment numbers and MSM fails to catch the error

I've previously written about President Barack Obama's claim that the 'economy was losing 700,000 jobs per month' when he took office.

I've just seen a Fox News report wherein the President repeats this claim and this number, saying that the 'recovery' will come in "fits and starts."

From the White House website, Obama's remarks on the October unemployment numbers:

"I also want to say a few words about the unemployment numbers that came out today. As I've said before, my principle focus each and every day, as well as the principle focus of my economic team, is putting our nation back on the path to prosperity. Since the period last winter when we were losing an average of 700,000 jobs per month, we've certainly made some progress on this front. But today’s job report is a sobering reminder that progress comes in fits and starts -- and that we're going to need to grind out this recovery step by step."(emphasis added)

This is just not true! As I wrote in September:

According to CNNMoney.com, job losses in November 2008 were 584,000 and job losses in December 2008 were 524,000. Total losses for the months of September and October 2008 were 792,000, so clearly neither month was '700,000.'

U.S. News and World Report says that the January 2009 job losses were 598,000, while the New York Times reported February 2009 job losses of 651,000.

These actual numbers show that the job loses never reached 700,000, much less averaged that much. So when the president repeats a false number, is he lying? Or just, perhaps, exaggerating? Or what?

You know what they say, 'when you repeat a lie often enough...'

Where is the fact-checking?

It's theft - even though we get 'ours'

H.R. 3548, The Unemployment Compensation Extension Act of 2009, will extend unemployment benefits for another 13 weeks. This is on top of the 26 weeks most states already have provided and the 53 weeks the federal government extended to the unemployed because of the recession.

But, unlike the previous actions, the money in this bill will only go to states with over 8% unemployment, Ohio included. That means that taxpayers from across the nation, including those of us here in Ohio, will be paying.

However, only people in 29 of the 50 states will get these funds. If you're in the other 21 states, you're out of luck - even if you, too, are unemployed.

Votes results show that Marcy Kaptur voted in favor of the bill, but that Bob Latta voted against it. Sadly, 104 so-called Republicans thought this was a good idea...

The other 28 states, besides Ohio, getting these monies: AL, AZ, CA, DC, FL, GA, ID, IL, IN, KY, MA, ME, MI, MS, MO, NV, NJ, NY, NC, PA, OR, PR, RI, SC, TN, WA, WV, and WI.

So if you're in a state not listed, you're going to subsidize the bad decisions of governments elsewhere.

This is not just re-distribution of wealth; it's theft from the states that have made the hard decisions that resulted in them weathering this downturn better than others. What a nice 'reward' for being fiscally prudent - to have your citizens taxed so others can have the fruits of your labors.

What happens when ALL the states have unemployment above 8%? How will the wealth be redistributed then???

Suprise! Youth unemployment skyrockets

This really shouldn't be a surprise, but the Labor Department is reporting that unemployment rates among youth have reached a post-WWII high of 52.2%. This story in the New York Post, however, never mentions one of the key contributors to this high rate: increased minimum wages.

It only makes sense that, when unemployment is high in general, as it is now during these recessionary times, employers are going to want the most for their money. Youth workers are the most unskilled, with the least experience. It's just common sense that a government mandate to pay a set amount will cause employers to want to get the most value for that wage, seeking out potential employees with attributes that provide that value - meaning older workers who have some level of skill and experience.

James Sherk, from The Heritage Foundation, arguing for a delay in the planned increase back in July, wrote:

On July 24, the minimum wage increase Congress passed two years ago will enter its final phase, increasing the cost of hiring unskilled workers by 10 percent. Economic research demonstrates that higher minimum wages come at the cost of higher unemployment for low-skilled workers, but when Congress passed the minimum wage increase unemployment was low. Now, in the middle of a deep recession, unemployment has risen sharply for the least skilled workers. Wage growth has flattened since the start of the year. This minimum wage increase will artificially increase costs for struggling businesses at exactly the wrong time. And as a result, it will cost 300,000 teenagers and young adults their jobs.
...
Most minimum wage research confirms this effect: Two-thirds of recent minimum wage studies find that it reduces employment, with the overwhelming majority of the most rigorous studies reaching this conclusion.

While it's hard to separate the various causes of high unemployment during a recession, one cannot ignore the fact that the increased minimum wage had some impact, contributing negatively to the other recessionary impacts.

Those who support increased minimum wages say this is a 'moral' thing to do ... that 'ensuring decent wages' for all is the proper role of government. However, such beliefs defy reason when you see that the result is higher unemployment for the unskilled and the youth - the very groups such higher minimum rates are supposed to help.

And that's in a normal economy. In a recession/down economy, the negative impact is even greater. But watch politicians campaign on the 'gift' of a higher wages that they've so generously 'given' to us, while ignoring the actual results of their actions.

Another #1 ranking for Toledo

But this one isn't so good...

Joel Kotkin, of Forbes.com, has an article on Yahoo! Real Estate ranking the Worst Cities for Jobs. It should come as no surprise that many of the cities are in the Midwest - primarily automotive focused areas. As the sub-heading says, "The Sun Belt just might recover, but employment prospects look grim in Michigan, Ohio and California."

Worst Big Cities for Jobs
1. Detroit-Livonia-Dearborn, Mich.

2. Providence-Fall River-Warwick, R.I.

3. Cleveland-Elyria-Mentor, Ohio

Click here for the full list of the Worst Big Cities For Jobs.

Worst Medium-Sized Cities for Jobs
1. Toledo, Ohio

2. Hickory-Lenoir-Morganton, N.C.

3. Bradenton-Sarasota-Venice, Fla.

Click here for the full list of the Worst Medium-Sized Cities For Jobs.

Worst Small Cities for Jobs
1. Jackson, Mich.

2. Saginaw-Saginaw Township North, Mich.

3. Flint, Mich.

Click here for the full list of the Worst Small Cities For Jobs.

Random thoughts on recent news items

* Toledo tops in unemployment - This isn't really news, though everyone seems to think so. The myriad of news articles say that Lucas County has the highest unemployment of all the urban counties in Ohio. The news that everyone is missing is that Lucas County has had the highest unemployment of all the urban counties in Ohio for about the last 20 years! Even when the economy was terrific and the other areas of the state were doing well, we still had the worst numbers.

So rather than bemoan our numbers, what are our elected officials doing? Nothing constructive, that's for sure. They're talking about, or actually voting to, raise taxes and fees, make temporary taxes permanent, starting a government-funded education fund, training people for 'green jobs' even though they have no green jobs to fill, threatening to appeal their arbitration losses, etc... All things they've done, in one form or another, for the last 20 years - and we can expect the same results: Lucas County leading the states urban counties in unemployment. You know what they say about the definition of stupidity...

* In a 'stuck on stupid' move, Toledo Mayor Carty Finkbeiner decided to 'furlough' for a couple of days before and after holidays, some of the city workers. The unions claimed this violated the terms of their contracts and they went to court. The court said to go to arbitration on the issue - so the city and unions requested an expedited arbitration. Turns out, the unions were right and Carty was wrong. The furloughs did violate the terms of the contracts and the city was ordered to compensate the covered employees for that day off.

Now Carty, with his penchant for never admitting he's wrong, is saying he's going to appeal the arbitration ruling - and he'll do more furloughs while waiting for the appeal. Some are saying he doesn't even have the right to appeal (though I couldn't find it in the Toledo Municipal Code which includes the contracts), but that little fact won't stop him from trying. Of course, if he loses the appeal (as many people predict) we'll again be paying city workers for time not worked, not to mention the costs of the arbitrator and the appeal itself.

* The city recently got a $3 million grant to go toward cleaning up the old Fiberglass Tower. A Michigan firm, the Eyde Company, has decided to purchase the building and convert it to condos, office space, a restaurant, etc. Their plan calls for a $35 million investment, once the grant helps pay for removal of asbestos.

At the press conference announcing the grant, WTOL News 11 reporter Rob Wiercinski tried to ask the mayor about the wisdom of state money being the first in with the hope that private money would follow. He used the Marina District as an example of the difficulties private developers are facing with such projects. He didn't mention, though I will, the stalled plans for the Steam Plant and the public statements by those developers that Toledo, with its current market, doesn't need additional housing.

The mayor, in his usual condescending way, didn't answer the question but did manage to insult the reporter saying that people with better pedigrees than him and the mayor couldn't get loans from the banks. Such an answer would appear to support Wiercinski's concern - but the mayor was oblivious.

As a side note, I received an email several days ago about this structure. It was from an individual who had been at a meeting with engineers, architects, developers and Lt. Gov. Lee Fisher. The overwhelming consensus was that the building's layout and design was not conducive to the needs of today's potential tenants and that it would be better to tear it down than to spend a fortune trying to 'make a square peg fit into a round hole.'

* Saying that 'desperate times calls for desperate measures,' The Blade editorial board is calling for a state-wide tax amnesty. Tax amnesty programs, they claim, help the state collect money owed to them - and that's true. But what about all of us who have paid our tax bills on time - or even those who paid late, but paid the late fees because they knew they were in the wrong?

If we continue to reward bad behavior, we will continue to get bad behavior. If money is owed to the state, it should be collected - without an amnesty. If the state wants to work out any payment plan or forgive part of the late fees/fines as part of an agreement with an individual debtor, taking into account the unique circumstances that led to the non-payment, that's okay with me. But to publicly announce that any and all violators will have a period of time where they can suffer no consequences as a result of their willful and flagrant violation of the state laws just doesn't sit right with the majority of taxpayers who've done the right thing all along. Besides, the editorial argues, people don't suddenly decide to not pay their taxes just because they see this happening, so the negative consequences of amnesty programs is minor.

If the state is so desperate for funds, it should step up its collection enforcement - not reward the non-payers - and the editors at The Blade should stop arguing on behalf of lawbreakers and do more to support the lawabiders.

* There's been a lot of talk lately about government re-training of laid-off workers. Now, I'm all for laid-off workers going out and getting training that will help them get a new job, but I must question when it became the role of government to make sure this happens? When was it that government became the job trainers? We know that most people in local government didn't have 'real' job before entering politics, so do we really expect that they have the skills and ability to help others get jobs? And why are my tax dollars going to train laid-off people instead of staying in my pocket to help me better my education or training so I can move up an employment ladder?

Why is government acting as a middleman for training citizens? All the middleman does is give you information you could have gotten on your own (if you were interested) and then take your money (and everyone else's) for doing so. Think of it - Lucas County gets millions in Workforce Investment Act (WIA) funds to do this - and they spend that money in a building, in equipment like computers and chairs and desks and, especially, in staff salaries - all to provide a location where you can get information you could have gotten in numerous locations. And despite all these tax dollars being used to 'help people get jobs,' we still have the highest unemployment rate of all the urban counties in Ohio.

Government's job is NOT retraining laid-off people or helping out-of-work citizens to find jobs. That's an individual responsibility - or, at least, it used to be.

Ohio unemployment: numbers vs. percentage

The media was awash yesterday with the news that Ohio's August unemployment rate of 7.4% was the highest it's been since 1992.

EGAD!!! It's all Bush's fault!
NO - it's that Democrat Strickland!

But the reality of the situation is a bit different when you take a look at the details and not just just the headlines and the spin.

The unemployment rate is a reflection of the number of people unemployed divided by the total estimated number of people in the labor force and then multiplied by 100 to get the percentage.

And percentages can be deceiving.

If you have 100 people available to work and 20 of them are out of work, your unemployment rate is 20%. If you have 1000 people available to work and 50 of them are not working, your unemployment rate is 5%. Obviously, if you're comparing only percentages, it would seem that the 20% rate was much worse, even though fewer people are unemployed.

So it is with Ohio's rate. The number of people unemployed in August in Ohio was, according to the Ohio Department of Job and Family Services, 445,000. If you look at their historical records, that's actually 38% less than the record number of 715,200 unemployed in December 1982.

We had fewer people unemployed in August 2008 than we did in December 1982.

But, because we have fewer people in the workforce these days, the percentage is high.

We are, of course, comparing apples to apples in that the unemployment rate is always the number of people not working divided by the total estimated number of people who can work. But what does it really mean?

Is Ohio worse off now, because of a higher rate, than it was in 1982 when more people were actually unemployed? That's the question.

Sadly, the facts behind the statistics are often overlooked when it comes to how politicians and others spin the numbers. With a Democrat governor, Republicans will blame the high percentage on him and his administration of the state. This being a presidential election year, Democrats will blame the Republican in the White House.

And in trying to put the blame on each other, they will miss the real problem: that Ohio has not been a place where businesses want to be, which is why we have residents who cannot find jobs, and that our out-of-work residents either can't or won't do the jobs that are available.

Ohioans (both employed and unemployed) would be better off if those politicians would focus on making our state more business friendly, rather than focusing on how to 'spin' the numbers.