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Conservative Attacks on Payroll Survey |
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Conservative Attacks on the Payroll Survey
A March 2004 paper from the conservative Heritage Organization stated that the Payroll Survey is no longer a good indicator and that "employment in America is rebounding strongly." (Link to PDF)
This paper had two main criticisms. First, that the Payroll Survey gives artificially high employment levels when job turnover is high (further explanation). This criticism is soundly refuted by BLS reserch: Low job turnover is not a significant factor in why payroll employment has decreased during the Bush Administration (PDF file).
Second, the paper asserts that the economy has fundamentally changed and that the payroll survey fails to account for the dramatic rise in self-employed proprieters and consultants. However, Household Survey data state that the growth in self-employment counts for only twenty percent of divergence between the payroll and the household survey since November 2001.
It is true that the economy is fundamentally changing; technology increasingly allows people be self-employed to in their own home offices. However, the decrease in payroll employment is not primarily driven by these consultants. Increasingly, due to high costs of benefits and cheap, high-skilled foreign labor, employers keep only a small, core staff on their payrolls. The rest must fend for themselves.
Finally, the paper does not show adequate evidence that historical trends have totally changed. Over fifty years of data support the claim that higher than average gains in non-payroll jobs are associated with high unemployment and economic recession (see detailed graphical analysis). The graph below shows that as a higher percentage of the labor force is employed in non-payroll jobs the unemployment rate rises. So far this has proved true for the 21st century.
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http://zfacts.com/p/747.html | 01/18/12 07:30 GMT
Modified: Mon, 17 Apr 2006 18:32:57 GMT
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