In 2010s, lower unemployment claims =/= better job numbers

A common refrain from Scott Walker's "It's Working" crowd is something similar to a line we saw in the most recent monthly jobs report from DWD.

Initial weekly Unemployment Insurance (UI) claims for the first 14 weeks of 2014 dropped to the lowest point since 2000, and the annual average weekly UI claims are at a 13-year low.

And on its face, this is true- unemployment claims are indeed lower in Wisconsin than they have in years, and are down quite a bit from where they were last year, as the chart below will show. This also shows the spike in claims in February, which corresponded to 13,000 jobs lost, and how claims have fallen back to levels below that of recent years.

Unemployment claims, Wisconsin, 2011-2014


Granted, last April was a horrible month for jobs with 7,300 lost, but the annual bump we usually see around this year hasn't happened yet either. Now maybe some of that is due to difficulties in processing claims that led to a legislative audit being ordered in late April (would you put it past this crew to be screwing over people out of work just so their economic numbers look good?), but on the whole, we can safely say that reported claims are indeed down in the last 2 months.

But what the Walker Administration won't say is that unemployment claims are down everywhere. The U.S. continues its downward slide on unemployment claims, as the number of new claims have been cut in half from what we were seeing in 2009, at the depths of Great Recession job losses. In fact, new unemployment claims numbers are similar to the Housing Bubble year of 2005, and are only 20% higher than we were seeing near the end of the dot-com bubble of 2000- times where U.S. unemployment was at or below 5%. So when the Walker folks make this "lower claims in more than a decade" argument, it's really not that significant.

And the low unemployment claims don't necessarily translate into better job growth, because we're not adding as many jobs as we used to either. Take a look at a report issued this week by the Bureau of Labor Statistics, called the Business Employment Dynamics survey. This goes through the 3rd Quarter of 2013 (it's a more complete measure and takes more time to compile), and it measures the total number of jobs gained and lost in the country, as well as in each of the 50 states. Between June and September 2013, it shows 7.0 million jobs were added in America, and 6.6 million were lost, for a net gain of 400,000. What's noteworthy is the lack of dynamics in recent years, as reflected by lower numbers in both gains and losses.



Even with a work force that has 1.7 million more people than April 2008, and 8.6 million more than April 2004, the number of jobs being gained and lost is less than in those time periods. This is another indication that employers are squeezing every bit they can out of their current employees and refusing to hire unless they have no other option, but the losses are also down quite a bit, and that's reflected in the lower amounts of unemployment claims.

Wisconsin takes this trend to an extreme. The U.S.'s "churn rate" is slow, but our state's is much slower, befitting a state that's bottom 5 in entrepreneurship.

1st 3 Quarters, U.S. vs. Wisconsin. Change as % of total jobs
1stQ 2013 U.S. 6.4% gained, 5.6% lost (net 0.8%)
1stQ 2013 Wis. 5.4% gained, 5.2% lost (net 0.2%)

2ndQ 2013 U.S. 6.4% gained, 5.8% lost (net 0.6%)
2ndQ 2013 Wis. 5.8% gained, 5.4% lost (net 0.4%)

3rdQ 2013 U.S. 6.1% gained, 5.8% lost (net 0.3%)
3rdQ 2013 Wis. 5.5% gained, 5.5% lost (net 0.1%)

So if you hear Walker's DWD and other right-wing spinmeisters try to imply Wisconsin is "bouncing back" because our unemployment claims are lower, understand that it's not necessarily true. Some of it is due to increased stagnation in the job market and an unwillingness to step up and take chances to sink or swim.

But I guess that's development's not too surprising, since we have a governor and state Legislature who is owned by the corporate oligarchs at Wisconsin Manufacturers and Commerce and the Koch/ALEC consortium. Those people don't want a dynamic economy with new ideas and workers entering and leaving the field of play, but instead want minimal competition in firms, and workers who are made desperate by a lack of a safety net and fewer firms to choose from. These low numbers of job creation and reduction make sense in light of this.