Jobs Numbers Jimmied by Bush Admin

Last week the Bush Labor Dept released unemployment numbers nearly double what was expected. Now, this week, the NY Post’s John Crudele writes that the real number is – hang onto your hats – 147,000. The difference is pure smoke.

[T]he total loss was 147,000 when you include revisions that were made to previous months.

Not scared yet?

Well, the government kept last Friday’s reported loss at just 80,000 by adding 142,000 make-believe jobs to the count.

Those are positions that the Labor Department believes but can’t prove were created by newly formed companies that are beyond the surveying abilities of the government.

That little bit of razzle-dazzle is called the Current Employment Statistics Birth/Death Model, and you can look up that 142,000 number if you don’t believe me.

Previously the government added 135,000 jobs to the February job count, which lessened the loss in that month.

(emphasis added)

Ooooooh. So that’s how it’s done. Is there any reality at all in those…um…projections? Well, probably not.

A closer look shows why these birth/death assumptions are so preposterous.

According to the government, 28,000 jobs were quietly created – but couldn’t be officially counted – last month in the construction industry.

Construction! And that’s despite the fact that the homebuilding industry nationwide is flat on the seat of its Levis.

And through birth/death modeling the Labor Department would also like you to believe that 6,000 new jobs were created in “financial activities.”

Unless the government is talking about the hiring of a new crop of bankruptcy attorneys that’s absolutely crazy.

And then there’s the addition of 23,000 jobs in what the government calls “professional and business services” – in short, consultants.

People lose their corporate positions and go out on their own – and the Labor Department thinks this is actually a new job.

So the numbers – which we already knew were cooked because they don’t include people whose unemployment has run out, people who have taken part-time jobs because they can’t find full-time work, people who gave up looking for a job altogether, and people who had to take menial labor far beneath their training and previous pay-rate – are actually hopelessly skewed by the inclusion of tens of thoousands of fantasy jobs?

Well, um…yeah. So this is the Bush Administration. So what’d you expect? Honesty?

Labor Dept Does Something–May Be a First

Elaine Chao’s tenure at Labor hasn’t exactly been known for its aggressive treatment of illegal corporate labor practices, despite the inconvenient fact that that’s what it was created to do, and as the head of it, that’s her job. She has usually supported whatever lame legal excuse or maneuver corporate attorneys came up with to justify their clients’ behaviour, and been exceedingly lax in enforcing labor laws; when she bothered to enforce them at all, it was normally because lawsuits or outside pressure forced her to. So we are only too happy to note that DoL investigators responded to information from a small watchdog group in LA and busted a Target contractor’s Wal-Mart-style treatment of its janitors: wages below minimum, a 7-days/wk work schedule, hiring 15 and 16-year-olds as full-time employees, 50 and 60-hr/wk work schedules without overtime, non-payment of taxes, particularly Social Security–you know the drill.

Labor Department Wins $1.9 Million in Back Pay for Janitors

Published: NYT, August 26, 2004

The United States Department of Labor announced yesterday that it had reached a $1.9 million settlement with a contractor for the Target Corporation after finding that the contractor had not paid overtime to hundreds of immigrant janitors who often worked seven nights a week cleaning Target stores.

Several janitors said in interviews that the Target contractor was doing much the same as contractors for Wal-Mart had done before an immigration raid at Wal-Mart stores last October – making late-night janitors work nearly 365 days a year, without paying overtime or Social Security and other taxes.

The Labor Department announced its back-pay settlement with Global Building Services of Newhall, Calif., after a two-year investigation found that Global had not paid overtime to 775 immigrant janitors who cleaned Target stores in California, Arizona, Nevada, New Mexico and Texas.

The Labor Department was tipped off to the violations by a Los Angeles group, the Maintenance Cooperation Trust Fund, that monitors whether employers are breaking the law when they use janitors.

“We investigated 50 Target stores, and we saw that janitors were being paid in cash, a flat rate with no overtime, no payroll taxes, no workers comp,” said Lilia Garcia, the trust fund’s executive director. “It’s a cancer in the industry; too many of these big retailers are using problematic contractors.”

Ms. Garcia said her group found that a half dozen of the late-night cleaners were only 15 or 16 years old. She said Global Building Services fired them soon after the federal inquiry started largely because state law bars teenagers so young from working so late at night and so many hours a day or a week. California officials participated in the inquiry.

Last October, federal agents raided 60 Wal-Mart stores in 21 states to arrest 250 cleaners who they said were illegal immigrants. The immigrants were employed by various Wal-Mart contractors, and as at the Target stores, they usually worked seven nights a week and were paid in cash without receiving overtime.

Labor Department officials declined to say whether they were investigating Wal-Mart or its contractors, although Wal-Mart has acknowledged that a federal grand jury in Pennsylvania is investigating whether it illegally cooperated with its contractors to use illegal immigrants as cleaners. Lawyers in New York have filed a class- action lawsuit against Wal-Mart charging various labor violations on behalf of what they estimate are thousands of illegal immigrant janitors.

Felipe Aguilar, who said he cleaned at five Target stores in Southern California, said in a telephone interview: “In my three years there, they gave me very few days off. And when I came back after being out injured for two weeks, the company said, ‘We can’t take you back. Someone else is working in your place.’ ”

Mr. Aguilar said that he worked about 80 hours a week, from 10 p.m. to 8 a.m. daily, and was paid $525 or $625 every 15 days. That came to less than $4 an hour, well below the federal minimum wage of $5.15.

His wife, Claudia, who also worked at Target, said, “We felt bad about the pay; sometimes we felt rage, but we were scared to complain because we needed the job.”

In a statement, Global Building Services said that after these problems were brought to its attention in November 2002, it cooperated fully with the investigation and changed its pay practices.

“We are pleased that we were able to reach an agreement with the Department of Labor to compensate our employees,” Global said. “The company is fully compliant, and we look forward to serving the needs of our retail customers. We feel this is all behind us now.”

Uh-huh. How could Global Building Services not know that something on this scale was happening? Don’t they handle the paychecks? Didn’t they notice the discrepancies, the lack of withholding? If you believe GBS’ absurd statement, you probably also believe that Saddam was responsible for 9/11 and the Easter Bunny wears tennis shoes and delivers eggs doing an impression of Tom Jones singing ‘Delilah’.

And we must add that while we’re all in favor of the Labor Dept actually doing something it wasn’t forced to do, we must in fairness note that: a) a $2Mil settlement is peanuts to a company that’s handling Target’s janitorial services in 5 states–5 huge states–and is hardly going to prevent them doing the same thing again when nobody’s looking, so it is effectively little more than the standard wrist-slap; and b) the DoL has yet to charge Target for complicity. It was Target, after all, who hired GBS and then didn’t bother to supervise them.

Oh, I forgot–‘But we didn’t know!’ Yeah, right. Ever notice that if you spend 25 cents on paperclips that wasn’t authorized, there’s a note on your desk from the comptroller the next day? How is that Target can track every expenditure to the penny except what they’re paying a contractor? How come if a buyer overpays $2 for an item their job is in jeopardy, but if they’re paying a contractor $$$MILLIONS$$$ less than the minimum he should be paying his employees, this they don’t notice?

The simple fact is, if you cost them a buck they’ll be all over you like white-on-rice, but if you save them a buck, they don’t give a damn how you did it. Steal it, extort it, exploit it–they don’t know, they don’t care, and they’ll never ask any questions.

From an old Bob & Ray routine–Wally Ballou (Bob) is interviewing a paperclip manufacturer (Ray) about how he san sell his product so cheap (10 cents a gross):

Wally Ballou: But how can your employees survive on $1.15 a week?

Ray: Oh, we don’t delve into the personal lives of our employees. That would be a wanton invasion of their privacy.

Wally: But where do they live? You can’t rent a room for a dollar a week.

Ray: Well, I understand a lot of them live in caves in the hills outside town and forage for food. They make their clothes out of tree bark and I’ve noticed, myself personally, that they don’t wear shoes. I call it ‘self-reliance’.

That routine dates back to the 50’s. Nothing much has changed, it would seem.

Bush: ‘Economy Is Improving’; Economy: ‘Like Hell I Am’

Yesterday, in a speech he made in Michigan reported by the WaPo, Bush said everything is getting better.

Bush Stumps in Dem Stronghold of Michigan

The Associated Press
Thursday, August 5, 2004; 7:44 PM

SAGINAW, Mich. – President Bush ventured into Democratic strongholds of this swing state on Thursday to attract crossover voters with a message that was tough on terrorists and full of hope for more prosperous times.

“The economy is improving – it’s getting better,” Bush said to several thousands of supporters at a community events center in a section of the state where the unemployment rate went up in June to nearly 8 percent – above the national rate of 5.6 percent.

Bush’s trip to Saginaw – his 18th trip to the Michigan – reflects the difficulty of an incumbent president campaigning in areas hard-hit by economic problems.

Yeah. It’s called a ‘yawning reality gap’.

The Saginaw-Bay City-Midland area of Michigan, a blue-collar, traditionally Democratic zone, has lost more than 8,000 manufacturing jobs. In Canton, Ohio, last Saturday, the president was in an area that has lost 11,000 manufacturing jobs since Bush took office.

“Factory orders are on the rise,” he said. “Manufacturing jobs are coming back. The unemployment rate has fallen a full percent and we’re not going to rest until everybody who wants to work can find a job.”

Oh, really? In today’s WaPo, the Labor Dept is forced to report otherwise.

Payroll Growth Slows Dramatically in July

By Nell Henderson
Washington Post Staff Writer
Friday, August 6, 2004; 3:30 PM

U.S. job growth nearly stalled last month, the government reported today, reinforcing other signs that the economic recovery is losing steam just four months before the presidential election.

Employers added [only] 32,000 workers to their payrolls in July, the smallest monthly gain since December and the fourth consecutive month in which the pace of job growth has slowed, the Labor Department reported.

Hiring also was weaker in May and June than previously thought, according to the department’s revisions of earlier figures, which sliced 61,000 jobs off the earlier totals. That means the economy added an average of 106,000 jobs a month since May, far below the 150,000 monthly pace many economists believe is needed to keep up with population growth.

Yet the unemployment rate declined slightly, to 5.5 percent in July, the lowest level since October 2001, from 5.6 percent the month before, as more people did find work.

The figures reflect employers’ reluctance to add to their payrolls in July after the overall pace of economic growth slowed sharply in the spring, dragged down by higher oil prices, rising interest rates and weak consumer spending, analysts said. Although they do not see the economy sliding back into recession, many forecasters expect the expansion to continue at the recent, cooler rate, with the pace influenced in large part by what happens to oil prices.

“We have slowed down dramatically,” said Stuart G. Hoffman, chief economist for PNC Financial Services Group.

So once again the Labor Dept was forced to ‘revise’ its original figures–what they had said was job growth surpassing or at least equal to what was needed to ‘keep up with population growth’, they are now, 3 months later, forced to admit is falling well below that. An infinitesimal 32,000 jobs for the whole of July is an abysmal number for a ‘recovering’ economy. What might be helpful in determining whether or not US jobs are ever going to recover is a number they won’t give us: How many jobs did US corporations create overseas in the last three months?

This staggeringly low stateside job creation performance is beginning to have even Wall Street concerned (it’s about fucking time). In a second article, WaPo reports that today’s stock market plunge was at least in part due to the Labor Dept’s numbers.

Dow Closes Down 148 to New 2004 Low

By Jerry Knight
Washington Post Staff Writer
Friday, August 6, 2004; 6:22 PM

News that job growth has stalled sent the stock market skidding for the second day in a row, driving the Dow Jones industrial average to a new low for the year.

The Dow plunged 148 points to 9,815.33 — a 1.5 percent loss that drove the blue chip index to its lowest point since the day after last Thanksgiving.

Suffering a 1.5 percent loss, the Standard & Poor’s 500 stock index fell almost 17 points to 1,063.97, its lowest since last December.

The Nasdaq Stock Market composite index dropped 45 points to 1,776.89, a 2.5 percent loss that pushed that index back to where it was in late August 2003.

As the losses accelerated during the afternoon, traders warned that stock prices will likely go lower.

“I don’t think the market is going to fall apart but will probably just continue to stay in a trading range,” Jonathan Golub, equity strategist at J.P. Morgan Fleming Asset Management in New York, told Washington Post reporter Ben White. “On the one hand you’ve had really great earnings but on the other hand you have a lot of fear in the market about the upcoming election, interest rates, terrorism, oil prices and Iraq. . . . This [jobs] number just gives one more shot of worry.”

Once again, I’ll repeat for the benefit of any free-marketers who might be looking in (yeah, right…) a question some of us have been asking for several years as offshoring, overseas outsourcing, and other corporate tactics for lowering payrolls, ducking their tax obligations, and avoiding inconvenient health, safety, and environmental laws here at home grow into SOP for more and more companies:

Who’s going to buy all this shit if you move everybody’s job to Indonesia?

(all emphasis added by me)

Unemployment numbers

According to the US Department of Labor’s Bureau of Labor Statistics the official seasonally adjusted unemployment rate for May 2004 was 5.6 percent. We all know that the unemployment rate is not based on an actual count of not working people; it’s based on a formula that approximates the number of people that fit in a category called “unemployed.” According to the Bureau of Labor Statistics’ website, “Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work.”

The Bureau tweaks the formula from time to time, but at no point does it ever measure the number of people who actually want work. No one knows what the real number is, except to say that it is bigger than the official unemployment rate. So far this is all old news. What’s new to me is the fact that the Bureau does attempt to produce a more accurate number. The May 2004 report includes something at the back called “Table A-12. Alternative measures of labor underutilization.” In this table they show six different ways of calculating unemployment.

The official count is number three on the table—5.6 percent last month. Methods one and two give a rosier picture. Method four adds the “permanently discouraged” and raises the total to 5.9. Method five adds the “permanently discouraged” and the “other marginally attached” (persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past). This raises the rate to 6.6. Method six adds in people who want full-time work but have had to settle for part-time, which brings us up to 9.7 percent of the labor force. How they calculate what qualifies as “the labor force” is a question for another time.

I don’t have a profound point to make out of all of this. This is just me discovering something I didn’t know. I’ve never actually read a US unemployment report (oddly, I have read Serbian ones), but I will be going back each month to check out table 12 and get a better idea of how things are.

Overtime Trojan Horse Rejected

On Tuesday, Senate Democrats, aided by a handful of moderate Republicans, handed a major rebuff to the Bush administration by blocking a Labor Department plan to scrap overtime pay for many white-collar workers. It’s not clear whether the House will follow suit and, if so, whether the White House will veto the legislation and go ahead with the changes anyway. It’s perfectly clear, though, that overtime has become an election-year political football.

The Labor Department’s changes to overtime are part of a larger overhaul of labor law, the first in 50 years. When first introduced last year, Labor’s changes included broadening overtime coverage for low-paid workers, but cutting back on eligibility of those better paid, as many as 8 million, according to Democrats. Last year’s plan capped rights to overtime at $65,000. But when the Senate voted to block the plan and the House decided to go along, the Labor Department agreed to rewrite the rules.

The Senate on Tuesday was voting on a revised version the rule changes that substantially reduced the number of workers who might lose overtime pay by guaranteeing overtime rights for workers who earn less than $23,660 a year. The new rules would also make those who earn more than $100,000 a year ineligible for overtime.

The Senate voted 52 to 47 for an amendment, tacked onto a corporate tax bill, to scrap the new rules, with five moderate Republicans breaking ranks to prevent the Bush administration from cutting overtime pay. Democrats argued that even under the revised plan, 4 million workers could lose their overtime pay.

Senator Tom Harkin, D-Iowa, who led the charge against the new labor rules, said, “This was a great victory for American workers and families” and sent a “clear message to the administration” to drop its efforts to rewrite the nation’s overtime pay rules.

(Read more…)

Administration Refuses Workers’ Overtime Pay Guarantee

April 29—During a U.S. House of Representatives hearing April 28, the Bush administration refused to guarantee that workers who currently have overtime protections would not lose them under the administration’s new overtime regulations.

Responding to questions by members of the House Education and the Workforce Committee, U.S. Secretary of Labor Elaine Chao reiterated the Bush administration’s opposition to a proposal by Sen. Tom Harkin (D-Iowa) to allow updates to the Fair Labor Standards Act’s rules that govern overtime eligibility but ensure no workers currently eligible for overtime lose their overtime pay.

AFL-CIO President John Sweeney said Chao used her appearance before the committee to continue “to tell half-truths about whether workers are at risk of losing overtime pay….The regulation will make it easier for corporations to slash overtime pay for many workers.”

After a yearlong drive to take away workers’ overtime pay rights, the Bush administration published its new overtime rules April 23 and they will go into effect in late August. But Democratic congressional leaders have vowed to continue fighting the Bush overtime pay grab.

As early as next week, the Senate may vote on the Harkin amendment to the Foreign Sales Corporation (FSC) tax legislation (S. 1637). The amendment guarantees workers’ current overtime rights, while allowing any part of the new Bush regulation that expands overtime eligibility to go into effect. The amendment would apply retroactively, so it could still block the portions of the Bush regulation that take away overtime pay.

(Read more…)