Two sets of books

by John Quiggin on February 8, 2004

Anyone who’s been following recent discussion of the US economy will be aware that the Bureau of Labor Statistics produces employment statistics from two different surveys, and that the results have diverged radically since 2001. The BLS preferred numbers on employment growth come from a survey of employers (the Establishment Survey) while other numbers, including the unemployment rate are derived from a survey of households (Current Population Survey). As the BLS Commissioner’s latest statement notes (PDF file)

From the trough of the recession in November 2001 through January 2004, payroll employment decreased by 716,000. Over the same period, total employment as measured by the household survey increased by about 2.2 million (after accounting for the changes to that survey‚s population controls).

Not surprisingly supporters of the Administration have been pushing hard to discredit the Employment Survey in favour of the CPS. While noting some reasons for the discrepancy, the BLS seems to be sticking with the payroll survey, noting that there are a lot of problems in estimating employment growth from the CPS, and that the payroll data is consistent with data on new claims for unemployment benefits.

If that’s the case though, the implication appears to be that the CPS results are unreliable, and therefore that the unemployment rate (derived from the CPS) is an underestimate. Allowing for the fact that non-employed people are divided between unemployed and those not in the labour force, the discrepancy could easily be a full percentage point, implying that unemployment is now higher than when the recovery (as measured by output) began. This seems consistent with anecdotal impressions.

The Decembrist

by Kieran Healy on February 8, 2004

Someone needs to explain to me why I haven’t been reading The Decembrist for the last six months.

Tragedy at Morecambe

by Chris Bertram on February 8, 2004

The deaths of “nineteen Chinese illegal workers”:http://news.bbc.co.uk/1/hi/england/lancashire/3464203.stm who were cockling on the treacherous sands of Morecambe bay has generated much comment in the British press. Much of that comment has focused on their illegality, the exploitation of such workers by gangmasters, the need or otherwise for tighter immigration controls, globalization and so on. Indeed. There was a similar burst of indignation when “some immigrant workers were hit by a train back in July”:https://www.crookedtimber.org/archives/000204.html . But one thing that needs saying is that such tragedies are a normal and predictable consequence of capitalism and not simply the result of coercion and abuse by a few criminals. In his “Development as Freedom”:http://www.amazon.com/exec/obidos/ASIN/0385720270/junius-20 , Amartya Sen discusses two examples where workers, in order to assure basic capablities (such as nutrition and housing) for themselves and their families, have to expose themselves to the risk of injury or death. Jo Wolff and Avner de-Shalit have “a paper on this theme”:http://www.ucl.ac.uk/spp/download/seminars/Wolff_De-Shalit_disadvantage.doc (Word format) that is on the “programme”:http://www.ucl.ac.uk/spp/seminars/seminars_2004.php of the UCL’s School for Policy Studies for this Wednesday, they recount Sen’s examples:

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The Flynn effect

by John Quiggin on February 8, 2004

Since the discussion on Chris’ post on mumbo-jumbo went straight from the ludicrous Edward de Bono to the Flynn effect, I thought I’d repost a lightly edited version of a piece on the Flynn effect and The Bell Curve that was on my own blog a couple of months ago, but might be of interest to CT readers.

The Bell Curve got a thorough hammering on statistical grounds when it came out (this review by conservative economist Jim Heckman in Reason is damning, and it was one of the polite ones). But the thing that most annoyed me when I read it was their discussion of the Flynn effect, namely that average scores on IQ tests have risen steadily over time, by amounts sufficient to wipe out the differences between racial groups on which Murray and Herrnstein rely. As Thomas Sowell points out in this review (reproduced by Brad de Long), it’s hard to see how any claim that differences in IQ test scores observed in Western societies are mostly due to genetic factors can stand up in the face of this observation. But Murray and Herrnstein slide straight past it, saying that they are concerned with contemporary inequality, not with time trends. This is about as reasonable as a “nurturist” deciding to ignore twin studies on the grounds that most people aren’t twins.

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Ill Communication

by Henry on February 8, 2004

A cautionary tale – over the last couple of years, my wife and I have been using cheap prefix companies in Canada and the US to make long distance and international phonecalls. In the US we’ve been using 101-6868, a fairly popular – and cheap – service, which bills indirectly (you see the charge on your monthly phone bill from your carrier). No more. My wife changed phone carrier a few months ago, which apparently meant that “PT-1 Long Distance”:http://www.pt-1.com/, the proprietor of 101-6868 wasn’t able to charge us properly (I presume they didn’t have a relationship with our new carrier). PT-1’s reaction wasn’t to phone us, or to send us a bill – it was to refer the matter (involving the princely sum of $8.93) directly to a debt collection agency, which then sent my wife a dunning letter threatening the usual kinds of nastiness. A couple of very irate phonecalls seem to have sorted the problem out – but other users of the service (or its competitors) may want to take this under advisement. All the more so, as we’re apparently “not the only people”:http://www.csua.berkeley.edu/~tien/consumer/pt1-others.html who’ve had this experience with PT-1 Long Distance; indeed, it appears that we’ve gotten off quite lightly in comparison.