Jobs Discussion Hatchet Job

by: Bob McTeer

“Not a single new job has been created.”

The quote above is from a grown man considered expert enough to be a guest on financial TV. I ran to write it down; so I think it is accurate. As I recall, he made the comment to bring perspective to the jobs discussion.

Of course, the quotation is wildly inaccurate and misleading to the casual viewer, who wouldn’t have guessed he was probably referring to net job growth. This means that job losses have exceeded job gains over these past two years. The difference between net and gross job growth is not insignificant. “Not a single job has been created” implies a stagnant economy dead in the water. The gross job numbers behind the negative net tell a far different story.

The Bureau of Labor Statistics publishes quarterly gross job gains and gross job losses in a data series called Business Employment Dynamics. The latest numbers, from the second quarter of 2009, show 6,420,000 job gains, “an increase of 674,000 jobs compared to the previous quarter.” The Bureau reported that this was the largest quarterly gross job gain since the data series began in 1992.

The number of job losses during the second quarter of 2009 from private sector closing and contracting establishments fell to 8,000,000, or 7,999,000 to be more precise, for a quarterly decline in gross jobs of 487,000. The gross job gains of 674,000 (and rising) exceeded the 487,000 (and falling) of gross job losses, but not enough to turn the levels of gained and lost jobs positive.

In percentage terms, job gains in the second quarter of 2009 were 7.5 percent, compared to job losses of 6 percent. This is a far cry from “Not a single job has been created.”