Thursday, June 7, 2012

(for Glenn Kessler and PolitiFact) How to fact check the job recovery numbers

Originally posted on May 14, 2012 at Sublime Bloviations

A valuable media watchdog watchdog post at the new blog "counterirritant" pointed out a problem with Glenn Kessler's fact check of a claim from Republican presidential candidate Mitt Romney.

Kessler writes the fact checker feature for the Washington Post.  Romney claimed that in a normal recovery from recession the country should be adding something like 500,000 jobs per month.

Kessler decided that the best way to “check” this was determine how frequently 500,000 jobs were created in a month in the last 65 year.
The post goes on to very effectively criticize Kessler's methodology throughout.

By a funny coincidence (general leftward lean of the mainstream media, maybe?), PolitiFact used very similar reasoning on the same claim:
Is 500,000 jobs created per month normal for a recovery?

The short answer is "no."

We arrived at this conclusion by looking at the net monthly change in jobs all the way back to 1970. Since Romney was referring to total jobs, rather than private-sector jobs only, we used total jobs as our measurement. And since Romney was talking about job creation patterns during a recovery, we looked only at job creation figures for non-recessionary periods, as defined by the National Bureau of Economic Research. Finally, we excluded the current recovery.
The Kessler/PolitiFact method is entirely wrongheaded.

Romney didn't claim that 500,000 jobs created per month was a normal figure during a recovery.  I can imagine the furrowed brows of Kessler, Louis Jacobson and other mainstream media fact checkers.  Aren't they the experts?  What am I talking about?

It's actually pretty simple.

The size of the economy changes.  If country A enters a recession losing 1 million jobs  then it takes two months to regain the lost jobs at a rate of 500,000 per month.  If country B experiences a recession losing 10 million jobs then it takes 20 months to regain them at a rate of 500,000 per month.

Not only does the size of the economy vary, but so does the depth of the recession.  The rate of recovery for lost jobs needs  to account for both factors.  Neither Kessler nor PolitiFact gave any apparent consideration to those critical criteria.  It's like comparing prices between now and the 1950s without adjusting for inflation.

The Romney campaign has made a number of statements like the 500,000 jobs claim, and they probably relate to the following chart or one like it from the Bureau of Labor Statistics:

Clipped from

Romney's claim almost certainly derives from the fact that post-war recoveries usually replace lost jobs much faster than the present recovery. 

So how does one check that claim?  It's not that hard.  Take the bottom point of employment, then count the number of months that it takes to get employment back up to the peak level.  Divide the number of jobs lost by the number of months it took to return to return to the employment peak at the start of the recession.  Do the same for each of the post-war recessions, then average the numbers to obtain the average job recovery time.  After all of that, divide the number of jobs lost from the 2007 recession by the averaged job recovery time.

Why didn't the Washington Post or PolitiFact do anything remotely resembling the fact check I just described?  It could be gross incompetence.  It could be ideological bias.  Or it could be both.

Update 6/7/2012:  Added post title

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