Stop Silly Predictions

Terry H. Schwadron

May 9, 2021

The immediate squabbling this weekend over the “surprise” of missed expectations of a huge jobs rebound in a single month reminded me of the “surprise” ending for the March Madness college basketball tournament.

The results did not match all the hype, whether for Gonzaga basketball or for a million jobs in a month, and somehow that meant someone had “failed” rather than having witnessed simultaneous good outcomes.

What was wrong here was not the result, but the insistence on the part of government officials, television pundits and economists to set predictive expectations at all, before the facts are in, rather than waiting 10 minutes or a day or a week to analyze the facts on the ground. Just stop it. Snap out of it.

Indeed, an economy that adds 266,000 jobs in a month is an improving situation, just far short of the wild expectations that the month would bring back a million jobs even as the information about coronavirus continues to cast a shadow over how quickly businesses and individuals can respond to a year’s worth of enforced isolation and shutdowns. In other years, without a pandemic, this would have been regarded as a great event. Now, as we hope for instant recovery, somehow this was being presented as a failure, or worse, a dependency on overly generous government unemployment largess.

If we had a dollar for every time a cable news reader mentioned unemployment benefits as stopping individuals from taking low-paying jobs just so the overall jobs numbers would look better, we wouldn’t be needing any economic stimulus. Blaming workers who prefer not to return to their jobs is too simple an explanation, and too obvious a target for those who have been paid to work all along this last year, to give credence.

Obviously many of the economic sectors just returning, including restaurants and hospitality, depend on low-wage jobs that need to come up to be competitive. I would have expected to hear more commentary about the failures of Congress to deal straight up with raising the minimum wage, for example.

Plus, both on the Left and the Right, America, or at least American political television, seems to suffer from all-or-nothing thinking, that the only policies worth discussing are those that take effect within about 30 minutes of announcement. As an example, impatient Republicans can’t give Joe Biden a month to clear out overcrowded immigration holding areas after a previous administration had dismantled the appropriate legal and social apparatus, and impatient Democrats can’t stand it when Biden says he’ll need a little time to figure out how asylum rules should work better.

Likewise, the jobs numbers are not actually about who’s working, they’re about political gamesmanship. The economics reporters were on the air before they even had read the Bureau of Labor Statistics report, and were scrambling to be able to answer questions beyond the topline numbers.

Backwards-looking Data

Let’s start with the fact that these jobs numbers are backwards-looking, and that they are based on two surveys, which means that they are not a reflection of immediacy. That means that April numbers, already in the past, are still reflecting the bewildering quilt of varying state and local conditions and rules about who can open, with partial clientele, for reduced hours.

Of course that is true every month, and the reports are much more useful in showing trends rather than in specific snapshots of the success of any one economic policy.

It has not even been clear to employers how much they can be open, never mind for employees who would cede jobless benefits to return to partial work. It would be a nice change not to hear all this being presented as if it were about “laziness” of workers, and more about the need for clarity of how the job marketplace needs to respond to get the numbers needed for full employment.

One key phrase I saw in the report was this: “Both the unemployment rate, at 6.1 percent, and the number of unemployed persons, at 9.8 million, were little changed in April. These measures are down considerably from their recent highs in April 2020 but remain well above their levels prior to the coronavirus (COVID-19) pandemic.” Black unemployment continues to be almost twice as White unemployment, and confusion over coronavirus continues to put higher percentages of women out of work than men.

In other words, it is far more true that those economic pundits were wrong in setting an expectation of immediate bounce back than it is about recalcitrance of workers to take low-paying jobs. The clear implication here is we’re well short of having stabilized working conditions, whether at the city and state level or by individual workplaces.

One example of this is reflected in interviews by The New York Times with employers and unions about the unsettled nature of whether vaccines will be required to work. Relatively speaking, this seems a pretty basic question to see headed towards resolution before seeing a million jobs re-filled in a month.

The report noted that part-time work actually declined by a half-million people, as workers whose hours had been cut retrieved fulltime jobs or lost out to the elimination of part-time jobs. Still the number of persons employed part time for economic reasons is 845,000 higher than in February, 2020. Those are measures that fit into the simple explanations that flooded the airwaves.

Here’s another: In April, 9.4 million persons reported that they had been unable to work because their employer closed or lost business in the pandemic. That is down from 11.4 million in March, with about the same 9 percent receiving some employee pay. The number of discouraged workers, among those who believed that no jobs were available for them, was little changed at 565,000 in April but is 164,000 higher than in February, 2020.

Why can’t we accept that several things about jobs can be true at once?

Where Were Jobs?

The biggest increases for jobs in April came from leisure and hospitality driving by restaurant and bar re-openings, with gains in

in amusements, gambling, recreation and accommodation, though those industries are way below pre-pandemic figures.

Smaller increases were in repair and maintenance industries, child-care services, personal and laundry work, education, social assistance, financial and real estate services. Temporary jobs declined, as did warehousing and messenger jobs. Airlines were up, even though there were layoffs. Manufacturing jobs had been up in March, but down in April. Retail and construction stayed about the same — evidence that we’re not settled on coronavirus openings just yet.

But wages remained relatively stagnant as well, with average hourly jobs increasing by 21 cents following a March decline. We should expect that as demand for workers increases, we should be seeing more pressure on better wages.

My takeaway is that all this sounds like the rumblings of the economic engines getting underway, rather than either some huge success of our economic policies or the “failure” of (fill in the blank) coronavirus recovery programs, continuing unemployment payments, or Team Biden vs. Team Trump.

What we need here is a moment’s worth of understanding that vaccine programs have been effective at driving a hugely bad economic impact, and that we’re on the mend. Before we beat ourselves up for not running at full speed, we should remember that we’re not that we actually are up and walking.

##

www.terryschwadron.wordpress.com

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store