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Obamacare Job Double Counting and Other Economic Distortions
Reader Tim Wallace provided another excellent series of charts on the employment situation. These charts compare June employment in 2013 to June in prior years.
June Full-Time Employment
June Part-Time Employment
Wallace writes " Hello Mish. The full-time job loss since June of 2007 now tops five million. The overall job loss is still 2 million, in spite of the fact the US now has a working-age population that is 14 million higher than in June 2007."
Snapshot 2007 vs. 2013
Snapshot vs. Prior Year
By this comparison only 2012 looks anything close to a normal recovery year. Some of the jump in 2012 is due to revisions from 2010 and 2011 that were not as bad as originally reported.
In the last year, the economy gained 1.316 million full-time jobs, about 110,000 a month. Overall jobs rose by 1.639 million, about 137,000 a month, a number just above what it should take to hold the unemployment rate flat.
Month-over-month distortions abound. As noted on Friday, Part-Time Jobs Increased by 486,000 with 326,000 Full-Time Jobs Lost.
Seasonally Adjusted Part-Time Employment
Wallace charts show non-adjusted numbers vs. the same month in prior years, and that is a valid statistical comparison.
Let's also look at seasonally adjusted numbers vs. the prior month, also a valid comparison.
The trend towards part-time employment since 2010 is volatile, yet unmistakable.
Part-Time Employment vs. Prior Month
Obamacare Job Double Counting
The above part-time numbers do not show the trend one might expect. Moreover, establishment survey numbers show a fair amount of hiring (+195,000 in the latest report), with recent months revised higher.
Here's the problem: The establishment survey double counts jobs when someone takes an extra part-time job, whereas someone working two part-time jobs is counted as employed just once in the household survey.
For example: Thanks to Obamacare, someone who used to work 35 hours a week for Olive Garden now works 22 hours for Olive Garden and 12 for Applebees. And Someone who worked 35 hours for Applebees now works 22 for Applebees and 12 for Olive Garden. The establishment survey sees two additional jobs created when precisely zero jobs were created.
Since this is happening en masse, I expect downward revisions in the future over Obamacare Double Counting.
The Obamcare effect is real. The distortions are complicated, numerous, and not widely understood.
Obamacare Economic Distortion Synopsis
- October 10, 2012: Prepping for Obamacare, Olive Garden and Red Lobster Cut Workers' Hours; Are Other Companies Doing the same?
- October 20, 2012: Mish Obamacare Mailbag: Expect More Part-Time Jobs
- February 02, 2013: Obamacare in Action: Retail Workweek Hits 3-Year Low
- February 19, 2013: Opting Out of Obamacare (the Unaffordable Health Care Act); Not Even Labor Unions Want It
- May 3, 2013: Obamacare Affects Part-Time Employment Yet Again; Nullification Bill Passes South Carolina House; Analysis of Healthcare Penalty Rates
- May 20, 2013: Obamacare Premiums 47% Higher But Deductibles 27% Lower Than Grandfathered Health Plans; Obamacare Lies
- June 21, 2013: Obamacare Effects Hit Local Governments, Small Businesses, Temp Staffing Agencies; Chicago Dumps Retirees Into Obamacare
For more on Obamacare Economic Distortions, please peruse the above links to your heart's content.
Originally posted at Mish's Global Economic Trend Analysis
© Mike "Mish" Shedlock
Investment Advisor Representative