September 23, 2004
Response to the GOP's Spin on Jobs
In another attempt to cook the numbers on jobs and wages, new VT GOP figures just don't stand scrutiny.
The Real Story
Unemployment rate 8/04 3.4%
Unemployment rate 9/03 5.0%
unemployment rate 8/04 5.4%
Vermont's unemployment rate is lower than the U.S. But this is nothing new since our rate has been lower for over
So how can Jim Douglas take credit for it?
Burlington's unemployment rate is lower than the state's (3.1% vs. 3.4% ).
You can't have it both ways Jim.
Total employment 8/04 342,500
Total employment 9/03 334,400
little misdirection here. Total employment doesn't really measure
"jobs" because it includes self-employment (SE). While SE works for
some people, it offers no security, no employer assisted health care, and
requires payment of 13% for FICA. In addition, Census data shows that 31% of
self-employed Vermonters earn less than a livable wage.
any case, the growth of total employment under Jim Douglas is below the
average for the same 20 month period going back to 1978-79 (6,600 vs. 7,700).
importantly, there are only 2,900 more jobs today than when Jim
Douglas took office (301,400 today vs. 298,500 in 1/03). This is also well
below the average for the same 20 month period going back to 1990-91 (2,900
why didn't the GOP show total employment from Jan. 2003 when he took office?
Perhaps because the numbers wouldn't look as good. That's called selective
use of the data.
these findings all together we find the wages of the new jobs were slightly
higher than the wages of the jobs which were lost. And the good news is
that the main drag on the Vermont economy – the loss of IBM jobs – has ended
and even slightly rebounded. Computer & electrical equipment jobs
have even rebounded 200 or so since the turn of the year. That means
recent “job quality” has improved significantly. With this development,
the claim of low-paying jobs is not only old news but it is wrong
news. However, expect to hear more of it. This is an election
year. (The Vermont Economy Newsletter, July 2004)
methodology used to arrive at this conclusion is fatally flawed. First, the
authors used hourly wages rather than annual wages by industry.
Annual wages reflect actual hours worked, which is important because so many
jobs are part-time and others include overtime.
by only using hourly wages for "production and non-supervisory
workers", they assumed no managers have been hired or fired. This is
just not realistic.
Example: The average hourly
wage for production workers in durable manufacturing is $14.96.
At FT hours, this equals $31,117. But the average annual wage for
durable manufacturing is $47,773,
which obviously reflects the influence of manager's salaries and line
Finally, as we've shown,
the idea that their analysis is unimpeachable is demonstrably false. And the
idea that they alone are objective and that any other claim is necessarily
biased is absurd.
Burlington vs. the State
Burlington vs. the State
total employment, 1989 31,597
total employment, 2003 31,823
net job creation, '89-'03 226
percentage change, '89-'03 1%
employment, 1989 255,931
employment, 2003 294,288
job creation, '89-'03 38,357
VT percentage change, '89-'03 15%
manuf. decline, '89-'03 30%
decline, '89-'03 17%
GOP is not comparing apples to apples.
Note: The GOP figures are not total employment. They are jobs.
unlike Vermont - which has thousands of acres of undeveloped land - Burlington is limited by geography with little space
for large developments. Indeed, over the years, a number of businesses that started
in Burlington outgrew their space and expanded in nearby towns.
Second, the state gained
about 10% in population during the period 1989 - 2003, while Burlington has
virtually the same population today as 1989. Therefore, statewide job growth
adjusted for population growth is really quite modest.
Burlington's manufacturing decline is due almost entirely to cutbacks at
General Electric (now General Dynamics). The end of the Cold War led to a
drop in Pentagon procurement and the company downsized. The Mayor can hardly
be held responsible for that. If so, Jim Douglas must take responsibility for
structural changes in worldwide chip manufacturing and job cuts at IBM. Once
again, the Governor can't have it both ways.
fact, the real story is how Burlington responded to those devastating cuts at
GE (over 1,800 new jobs since the mid-90s). Moreover, Burlington actually gained
jobs from 2001 - 2003 (including a recession), while the state lost jobs (+2%
per capita income growth, '89-'03 37%
per capita income growth,
misdirection here. The GOP is using the wrong data. Per capita income = total
income divided by population. Total income includes capital gains, interest
and dividends, while most Vermonters live on wages. Per capita income tells
us nothing about average wages or how the income is distributed.
fact, the average annual wage in Burlington is $5,650 higher than the
statewide average wage.
I wonder why the GOP didn't mention this?
1. GOP figures from "For the Record: The Douglas Jobs Record" 9/21/04.
2. Sources: Bureau of Labor Statistics and VT DET.
3. Source: VT DET, Local Area Unemployment Statistics.
4. The Vermont Job Gap Study: Phase 8, p.7.
5. Source: VT DET, Local Area Unemployment Statistics, seasonally adjusted employment.
6. Source: VT DET, Current Employment Statistics, seasonally adjusted non-farm payroll employment.
7. See Vermont Economy Newsletter, Nov. 2003, p.4.
8. Source: VT DET, Current Employment Statistics, hourly earnings.
9. Source: VT DET, Covered Employment & Wages (ES-202) 2003.
10. Source: VT DET, Covered Employment & Wages (ES-202) 2001 - 2003.
11. Source: VT DET, Covered Employment & Wages (ES-202) 2003.
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