web counter Media Lies: What price "false" stories?

Wednesday, September 29, 2004

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What price "false" stories?

If you want to understand the pernicious nature of biased (or "shaded") news reporting, this op-ed in the NY Times provides an excellent example. Daniel Drezner, an associate professor of political science at the University of Chicago, in an op-ed titled "Where Did All the Jobs Go? Nowhere", writes
Not surprisingly, all this coverage had an effect on public opinion. This month a poll by Zogby International for the Foreign Policy Association found that 71 percent of Americans believed outsourcing was hurting the economy. It also found that 62 percent of American workers believed the federal government should penalize companies that send work offshore.

Now, however, we can add some actual figures to the overheated debate. The Government Accountability Office has issued its first review of the data, and one undeniable conclusion to be drawn from it is that outsourcing is not quite the job-destroying tsunami it's been made out to be. Of the 1.5 million jobs lost last year in "mass layoffs'' - that is, when 50 or more workers are let go at once - less than 1 percent were attributed to overseas relocation; that was a decline from the previous year. In 2002, only about 4 percent of the money directly invested by American companies overseas went to the developing countries that are most likely to account for outsourced jobs - and most of that money was concentrated in manufacturing.
Interesting, isn't it?

Demagoguing about job outsourcing has been a successful strategy for the Democrats and particularly for John Kerry. Yet when we look at the actual figures, we find that, while any job loss is devastating to the individual who loses their job, the impact on the nation as a whole is miniscule. The "problem" is overblown. In fact, Drezner shows that the net effect to the nation is an increase in higher paying jobs.

If you go to the Bureau of Labor Statistics and look at the figures, you find out some very interesting things about jobs and unemployment. As I'm sure you're aware, the Democrats have been blaming Bush for massive job losses (3 million jobs lost, worst record since Herbert Hoover, yada, yada, yada), but when you look at the actual figures, you find out the picture is a bit more complex than that. You have to go here and do a search and then go here and do a search to find out that:

  • The number of unemployed was lower at the end of Bush's first year in office than it was at the end of Clinton's last year in office (5, 641,000 vs. 5,653,000) and the unemployment rate was less by 0.1% (3.9 vs.4.0).
  • At the beginning of Clinton's second year in office, the unemployment rate was 6.6%. At the beginning of Bush's second year in office, the unemployment rate was 5.6%, and that was just three months after 9/11, one of the worst disasters in US history.
  • Bush has never had a 6.6% unemployment rate.
  • The number of unemployed by August 2004 was 8,022,000. Sounds terrible, doesn't it? Looks like the "3 million lost jobs", doesn't it? But wait, the unemployment rate was 5.4%, the lowest it's been in quite a while.
  • When Clinton left office, the civilian non-institutional population (whatever the heck that is) was 207,753,000.
  • Today, after almost four years of the Bush administration, the same population is 223,677,000. That's almost 16 million more people in the US than when Bush took office. If one quarter of those are looking for employment, then that's almost a million more people than the "increase" in unemployed people. So are people "losing" their jobs? Or are more people that just came to the US looking for work? Or is the rate of increase in population outstripping the rate of increase in jobs? Or to put it another way, is the economy not expanding fast enough to keep up with the expansion in population? (Puts a different perspective on the problem, doesn't it?)
  • Then you find out that the BLS doesn't even bother to count self-employed people. Huh? So, if a company lays off 5,000, and 10% of those laid off start their own business, they simply aren't counted as employed? How would the numbers change if we actually counted them?
There's an old saying - "There's lies. There's damned lies, and then there's statistics." You can demagogue the employment/unemployment numbers any way you want, and no one can prove otherwise without having to engage in complex, time-consuming discussions that don't fit into TV soundbites or 15 minute segments in talk shows.

Tim Blair blogged It's All Relative in February of this year and put the press coverage of unemployment figures in perspective.
Here's CNN in July 1996, as the Clinton-Dole election approached:

Economists didn't expect June's unemployment rate to be much different from May's, which was an already-low 5.6 percent. But in fact, it did fall -- to 5.3 percent. The unemployment rate hasn't been that low since June 1990.

So 5.6 percent is "already-low". Now here's CNN in December 2001:

The U.S. unemployment rate jumped to 5.7 percent in November - the highest in six years - as employers cut hundreds of thousands more jobs in response to the first recession in a decade in the world's largest economy.
Huh? How can 5.6 be "already low", but 5.7 is "the highest in six years"? Note that neither statement is inaccurate. It's just a matter of perspective, as Blair points out.

The point? If you really want to understand what's going on, you're going to have to look at the figures yourself and understand the context. Have we really lost 3 million jobs if the population has increased by 16 million and 3 million are out of work? Or has the economy not expanded fast enough to absorb the population increase? What about the impact of 9/11 on the airline industry? The travel industry? Aircraft production and sales? Parts? Etc., etc.

If the old media sees the glass as half full when Democrats are in the White House but half empty when Republicans are in office, has anything really changed other than the media's reporting?