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Independent trader, commentator, contrarian, curmudgeon. "And for those of you playing our game at home..."
  • What Census Hiring Really Means To 2010 Employment Numbers 0 comments
    Mar 27, 2010 2:33 AM
    There's a lot of chatter in the financial press right now about the looming impact of the US Census Bureau's hiring of hundreds of thousands of temporary census workers, but I've seen surprisingly few details on what is actually scheduled and what impact it can be expected to have on the closely watched US unemployment numbers. So I've done some investigating on the official Census Bureau site, Census.gov., and the results are very interesting.

    But first: it's important to note that the unemployment-count methodology was just 'redesigned' this week, to the Obama administration's political benefit, in an important move that's drawn very little attention so far from the mainstream press. The Bureau of Labor Statistics (the same agency that recently 'discovered' that actual unemployment in 2009 was, oops, almost one million more than it had been under-reporting all along) has taken it upon itself to revise the accounting methodology so that unemployment numbers, which it admits were already being seriously under-reported by almost one million persons in 2009, could magically be made, not to rise, but to erase the under-count and to drop even further.
    Using the existing methodology from the last century up through last week, new unemployment claims actually ROSE this week by 13,000, worse than consensus forecast and confirmation that layoffs aren't abating. But thanks to the magic of the new methodology, new claims miraculously DROPPED instead by about the same number, a combined discrepancy of just under 30,000. Suddenly, the labor market iisn't worsening, it's improving. Penn and Teller would love the sleight of hand; even they can't make 30,000 people disappear with just a mouse click. To complete the Orwellian theme, the BLS is extending this 'revised methodology' retroactively, all the way back to 2005. This will have the effect of rewriting half a decade of history into a numbers narrative that's much more politically flattering for the Obama administration (and conveniently also for the Congress, most of whose incumbents predate him). So you're on your own as to whether you believe the new unemployment numbers going forward are accurate, or politically tampered with, or just so questionably compiled as to be irrelevant as a real-world indicator. Rest assured the market will still trade the numbers as always, however those numbers are arrived at, but it's worth noting that the system just changed, and significantly.

    So, back to the Census impact. The Census' major headcount happens every ten years, and with it, a surge of temporary hiring, chiefly to chase down those not responding to their questionnaires by return mail. The work is local, mostly evenings and weekends, when nonresponders are likeliest to be home. A driver's license, running car and US citizenship are each a plus, but are negotiable, and in some locations various specialty languages are wanted.
    In more prosperous decades, Census hiring was considered little more than a few weeks of extra pocket money for bored retirees and students on summer break. In the current economy it's being touted by the green-shoots cheerleaders as an important source of 'recovery' hiring. So what effect can we expect Census hiring to have on the employment numbers and on the consumer economy itself?

    The Census website provides an interactive US map which lets prospective job applicants know what hourly rate will be paid in their city. Scrolling around the map, most locations seem to pay between $11.00, $13.00 and $16.00 an hour, with a very few locations topping out at the max of $20.
    The length of employment will vary by location, with a suggested average of from 5 to no more than 10 weeks. There are 4 days of paid training, and hiring has already begun (the first hires showed up in the most recent total-employment numbers and helped nudge the unemployed total down from 10 to 9.7). 
    Each individual worker's gig ends as soon as he/she has checked off the last of his allotted names; workers from the 2000 Census tell me it's not possible to drag that out much, and none of them remember making significantly more than they might have made at a supermarket or retail aisle for the same amount of hours. Of course, 2000 was a much healthier job market; in some high-unemployment areas a shot at a few weeks of 2010 Census work may be the only game in town.

    The Census Bureau indicates it's ready to hire 'hundreds of thousands' of temp workers, but refuses to give an exact number because, frankly, they can't know yet. The need for old fashioned door-knocking with clipboards will depend on how many people don't voluntarily respond to the mail questionnaire. Those are still being sent out, so the non-response rate is anyone's guess. The actual need for census temp's could wind up being much lower than projected.

    This much is clear about the imminent Census hiring:
    Yes, it will temporarily cause a huge upward 'false positive' distortion in the weekly and monthly employment numbers, surging in April/May/June and presumably dropping off just as steeply at some point in the mid or late Summer, not to return for ten years.
    Yes, we can expect that temporary surge to be hyped beyond all proportion by both the Obama administration and the cheerleader factions of the mainstream and financial media. CNBC and the White House will be singing the same chorus.
    Yes, it will put some extra taxpayer dollars back in the pockets of some of the 25 million US  unemployed/underemployed. But it won't be a significant amount for any one worker, and perhaps more importantly, Census temp work is not a springboard into any other Government employment, Federal or otherwise. In a word, Census temp work doesn't lead anywhere, no matter how badly an unemployed Census temp may want or need it to.

    In short, it looks like the Census hiring will cause some abrupt and steep upward distortion in the employment numbers for a few months, then fade away by midsummer at the latest with no lasting positive effects on either permanent employment or consumer disposable income. 

    Politically, it would seem that the 'Census surge effect' will have dropped out of the employment numbers well before the November elections.
    As for that, and as for the actual number of Census temp's that will actually be hired, we shall see.















    Disclosure: No positions
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