Friday, August 19, 2011

State of Confusion

I know that I'm supposed to jump on the Snyder administration on the news that Michigan's unemployment numbers are trending upward again. It would be so easy. But I can't. In fact, I find it horribly depressing - and more than a bit confusing, actually.

We added jobs in July. We've added jobs year-over-year, 60,000 in fact. We also had people drop out of the labor force. Usually, those factors help to suppress the reported jobless rate, and yet it ticked up 0.4% last month, which is a moderately significant jump.

Why? The DNews takes a half-hearted stab at an explanation.

The monthly report contained some confusing numbers. A household survey of workers found 33,000 fewer had jobs in July, but a poll of employers showed a gain of 23,000 nonfarm payroll jobs for the month, with a loss of just 3,000 business and professional jobs, mostly among temporary workers.

Some of that contradiction is caused by the different approaches of the two surveys, explained Bruce Weaver. The household survey captures self-employed workers and those who haven't recently been on an employer's payroll.

The survey only asks people if they have a job and, if not, whether they are looking for one. When discouraged workers come off the sidelines and start job-hunting again, their numbers can swell the jobless count.

But they didn't come off the sidelines this time; 17,000 of them dropped out, so they aren't being counted in this current jump. The article also goes on to explain the seasonal factors; automakers didn't lay-off in the usual numbers during the summer months, which apparently is padding the number of manufacturing jobs. Tourism, education, same thing. This will be revised in the future, as these numbers often are, and perhaps that will account for the disparity. It's still rather puzzling for reasons that no one can quite adequately explain.

Doesn't matter though, really. They are what they are. The problem comes in public perception as to the state of the economy right now. Even though we have gained jobs at a pace that leads the nation...

Michigan led the nation with the highest unemployment rate for years, but has been recovering faster than the nation as a whole. Since July 2010, unemployment in Michigan has fallen by 14 percent, outpacing the national rate of decline of about 5 percent.

... these new numbers will be used by the Snyder administration as proof that we need more business tax cuts, now! Granted, that would be their answer to any set of numbers that came out, good or bad, but it gives them a ready-made excuse to turn up the heat on the urgency. On one hand, the CW is that the recent tax cuts haven't kicked in yet, so THAT can't be it, but on the other hand, they are using these numbers as an excuse to push for more, more, more...

Gov. Rick Snyder has been talking about job growth this week during a tour of the Upper Peninsula. A spokeswoman for him said Wednesday that the jobless rate rise is another reason the Republican governor wants to push ahead with changes to make Michigan a more business-friendly state. Most companies will benefit from $1.1 billion in annual business tax relief starting next year, an amount that will climb to $1.7 billion in 2013.

"This reinforces why that is so crucial," spokeswoman Geralyn Lasher said of the climbing jobless rate. "We need to continue to be aggressive on all fronts. ... We want to see these numbers dramatically turn around."

... which is going to kill our revenue down the road. All this comes just as consumers are starting to show a marked drop in confidence about the economy, causing analysts to revise auto-sales figures downward for 2011. The wallets start snapping shut all over America as everyone freaks out about the wild swings in the market coupled with these rising unemployment numbers, and as it has before, that will hit Michigan harder than any other state.

We begin the cycle again. And, since Snyder doesn't seem interested in the idea of diversifying our economy by actively recruiting new industry to come here (no "aggression" on that front that is apparent, anyway), preferring to rest on tax cuts and deregulation as his only economic weapons - we are about to make the same mistakes we have made in the past, except this time it's going to be worse. Republicans are already gutting the safety net, cutting weeks of unemployment insurance, throwing families off assistance, eliminating tax credits which will only push more people (especially children) into poverty. And they're just getting started.

We have to turn our eyes elsewhere to interrupt this trend - and that means the feds. Yeah. I know. I'm going to reserve judgment on any plan from Obama until I hear what it is; all I can say is that he better go big on the stimulus side, and play the "hope" card once again (yes, it will work) in a major way, because we need people feeling confident and buying those cars. Right, John?

Without that, it's hard to see how we continue the momentum we started in 2010. Even if it doesn't get through the House, which it probably won't, people need something they can look forward to - even if it's just the thought of another wave election in 2012.

Until then, they have a right to be confused and scared about the numbers they are seeing from day-to-day. Give them a reason to change their attitude, and they will.