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Friday, January 08, 2016 12:13 PM

Multiple Jobholders Artificially Boost "Full-Time" Employment: Does the Sum of the Parts Equal the Whole?

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The ECRI has an interesting study out today that pretty much confirms what I have said about Obamacare boosting part-time employment at the expense of full time jobs.

Please consider Multiple Jobholders Boost “Full-Time” Employment.

The latest jobs report far exceeded consensus expectations as the economy added 292,000 nonfarm payroll jobs.

But a closer look at the details reveals why concerns remain about the health of the labor market.

In December, year-over-year (yoy) growth in multiple jobholders rose to an 11-month high, while yoy growth in single jobholders eased to a three-month low. Specifically, since May the number of multiple jobholders has increased by 752,000, while single jobholders have increased by 429,000. In other words, multiple jobholders have been responsible for 64% of the net job gains since last spring. The disproportionate importance of multiple jobholders – forced to cobble together a living – shows why the labor market is weaker than it seems.

Notably, as long as these multiple jobholders log 35 hours of work per week — no matter how many part-time jobs that takes — they are considered full-time.
Does the Sum of the Parts Equal the Whole?

I confirmed the ECRI's statement about combining multiple hours from multiple part-time jobs into one allegedly full-time job with the BLS a long time ago.

Moreover, the discrepancies go far beyond what the ECRI reports to the point of double-counting in the reported payroll numbers.

I commented on this possibility on October 21, 2015 in Does the Sum of the Parts Equal the Whole?
Double Counting Part-Time Jobs?

I remain firmly convinced the BLS is double counting part-time jobs. And in a recent phone conversation, a BLS analyst admitted it was possible.

I asked a simple question: Why don't you sort out duplicate social security numbers?

The answer I received was "we would like to but we do not have access to the data for privacy reasons".

A decent sort-merge algorithm could hash this out easily, but only if the BLS had access to Social Security numbers.

So here we are wondering why the sum of the parts exceeds the whole overall, while we frequently see the opposite effect month over month.

The much-maligned BLS is in the spotlight, but in actuality it appears as if the BLS does not have access to the data they need to produce valid numbers.

Are major discrepancies like these better than no numbers at all?
Strong Jobs Report?

When I commented today on the "Third Strong Jobs Report", please make a note that strength is relative to what was discussed above.

I cannot accurately measure jobs, nor apparently can the BLS.

ADP could do this easily, with a social security merge program, but ADP has not responded to multiple inquires by me.

Finally, please bear in mind that if you worked as little as 1 hour, including selling trinkets on EBay, you are considered "employed".

I would like to see a breakdown of how many hours people are actually working in these part-time jobs, but that data is not available either.

Strength is Relative

It's important to put the strength of some of the jobs numbers into proper perspective.

  1. In the household survey, if you work as little as 1 hour a week, at virtually anything, you are considered employed.
  2. In the household survey, if you work three part-time jobs, 12 hours each, the BLS considers you a full-time employee.
  3. In the payroll survey, three part-time jobs count as three jobs. The BLS attempts to factor this in, but they do not weed out duplicate Social Security numbers. The potential for double-counting jobs in the payroll survey is large.

Household Survey vs. Payroll Survey

  • The payroll survey (sometimes called the establishment survey) is the headline jobs number, generally released the first Friday of every month. It is based on employer reporting.
  • The household survey is a phone survey conducted by the BLS. It measures unemployment and many other factors.

If you work one hour,  you are employed. If you don't have a job and fail to look for one and you are not considered unemployed, rather, you drop out of the labor force.

Looking for jobs on Monster does not count as "looking for a job". You need an actual interview or send out a resume.

These distortions artificially lower the unemployment rate, artificially boost full-time employment, and artificially increase the payroll jobs report every month.

Mike "Mish" Shedlock

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