MacIver Institute Report Misrepresents Job Data

Have you heard the great news? Gov. Scott Walker has created over 130,000 private sector jobs since he entered office in 2011, at least that’s what the Maciver Institute is trying to get people to believe when they published this report Tuesday.

Wisconsin has 137,372 more private sector jobs than when Governor Scott Walker first took office in January 2011, according to the most recent data available from the Bureau of Labor Statistics, which puts him past the halfway point towards his goal of creating 250,000 private sector jobs in his first term.

MacIver takes data from the BLS Quarterly Census of Employment and Wages since January 2011 and looks at how many private sector jobs were created since that time frame. The survey is very reliable in determining how many jobs have been either created, or lost, as it gets data from 95 percent of Wisconsin businesses.

In September 2012, the last quarter data is available, Wisconsin had 2,342,956 private sector employees, 137,372 more than the state had in January 2011.

That’s great news, except MacIver gets makes the same mistake Gov. Walker made in December.

By just subtracting jobs data from September 2012 from January 2011, the data is not seasonally adjusted, and everyone from economists and Walker’s own communications director says you cannot do this:

“Please don’t, as John Koskinen, an economist at DOR would say, compare February temperatures to July,” said Walker spokesman Cullen Werwie when we asked about job numbers last summer.

When we talked to Koskinen, here’s what he said: “The QCEW data published by DWD, and maintained by the BLS (U.S. Bureau of Labor Statistics), is not seasonally adjusted. The seasonal pattern overwhelms any trend, so a direct comparison between December 2010 and March 2012 is not valid.  The only valid comparison between December 2010 and March 2012 would be with data that is seasonally adjusted.”To get the most accurate number, you have to take the QCEW data in yearly snapshots otherwise you run the risk of accounting for say the boost in summer tourism and construction jobs the state sees every year.

Using the same numbers that MacIver used, Wisconsin will average a 94,000 increase in the number of jobs from January through September of that same year over the past decade. Taking out data from 2007-2008, because of the recession, that number increases to 97,000.

See where I’m going with this?

So what happens from September through January the next year? On average, the state loses 95,000 jobs. So all the job gains Wisconsin sees from January through September is nearly lost within the next three months.

If you look at yearlong data, from September through September in this case, Wisconsin typically adds around 21,000 jobs on average, if you take out 2007 and 2008 because of the recession.

By adding the typical summer job growth that Wisconsin goes through, but not waiting to see what happened during the fourth quarter of 2012, MacIver is trying to paint a rosy picture for people to believe, and is engaged in intellectual dishonesty, which they themselves admit:

John Koskinen, Chief Economist at the Wisconsin Department of Revenue, confirmed the private sector job growth numbers uncovered by the MacIver News Service, “That’s literally true,” however, Koskinen said economists typically use the same month from different years to avoid seasonal variations in employment.

So what would be a closer estimate of of how many jobs have been created since 2011? Well, without getting into seasonally adjusted data, I’m just going to take a two year snapshot from Sept. 2010 through Sept. 2012 because that’s the latest BLS that is available. Yes, Walker was not in office starting in Sept. 2010, but because we don’t have 2012 Q4 data yet, it’s the best we can do right now without estimating.

Just so everyone is clear, I’m using the same data that MacIver used, just looking at year-over-year changes, which economists and Walker’s own spokesman said you should do.

From Sept. 2010 through Sept. 2011, the state added 41,461 jobs, while from 2011 through 2012, it added 20,479, for a grand total of 61,940 jobs.

That’s less than half the 137,000 jobs that MacIver is trying to make people believe have been created.

So yes, it’s true that 137,000 private sector jobs have been created since January 2011, but don’t expect the number to be that high when Q4 numbers are released by BLS here in a couple months.

Update: I forgot to include total change in public sector jobs over the same period. Over the same time period, using BLS data, Wisconsin lost a total of 4,614 public sector jobs.

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