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The BLS and that 7.8% Unemployment Rate

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By Brad Furnish

On Friday, Oct. 5, 2012, the Bureau of Labor Statistics shocked the world of business, finance and economics by declaring that unemployment in September fell to 7.8% from its August level of 8.1%. Coming just a month before the Nov. 6 Presidential election, this dubious finding gave rise to widespread rumors and even accusations of collusion between the Obama campaign and the Bureau.

It is highly unlikely that the President's men conspired with Bureau officials or employees to invent or alter employment data. The Obama campaign would have too little to gain relative to its potential loss. A 0.3% fall in the unemployment rate hardly delivered a passkey to the Oval Office, but proof of a collusive conspiracy would doom Obama's chances - even if undiscovered until after the election.

That does not mean there was no wrongdoing here - far from it. It should be obvious to all that something was indeed terribly wrong with the way this episode was handled.

Start with the fact that BLS's unemployment number is obviously wrong. "Wrong" does not connote fraud or deceit. It means there was a short-circuit in the chain of reasoning leading to 7.8% unemployment. The BLS household survey estimated a seasonally adjusted total of newly employed workers exceeding 873,000 in September. This was the largest total since June, 1983 (when annualized GDP growth was 9.3%) and January, 1990 (when growth was 4.2%). (Two larger totals in 2000 and 2003 are not comparable because of data adjustments made by BLS.) Yet our current reported growth rate is 1.3%. Moreover, some 582,000 of those estimated workers were part-time.

The BLS also conducts a survey of job growth based on a sampling of business payrolls. This estimate has declined in each of the last three months, from 181,000 to 142,000 to September's total of 114,000. It isn't just that the two surveys differ - they often do. But not by this much. And the fact that recent payrolls detect falling job growth contrasts starkly with the September household survey's stratospheric increase.

Private-sector forecasters each have their own individualized reasons for thinking that the BLS has lost its marbles. My firm, Access Advertising, is a national leader in placing truck-driver recruiting ads. We compile the Driver Recruiting Index (DRI), which estimates the demand for commercial drivers in real time by sampling classified driver ads in 32 major-metropolitan newspapers throughout the country. The DRI has been declining on a year-over-year basis throughout 2012 and by 10-20% since June. In September, the DRI fell by an average of over 14% compared to August. In order to believe the 7.8% figure, I would have to believe that the agency has detected a major economic expansion from which trucking - which carries two-thirds of the nation's freight - is somehow excluded. This is wildly unlikely.

Here is a sampling of characterizations of the 7.8% unemployment rate and the 873,000 job gain in the household survey: "Must be an anomaly;" "statistical anomaly;" "just a fluke;" "statistical quirk;" "implausible;" "almost certainly a statistical fluke;" "huge statistical outlier on the upside;" "not reality;" "an aberration." All of these comments come from respected economists, forecasters and consultants, one of whom is a former director of the Congressional Budget Office. Some of them are known to be supporter of the Obama administration. None are rabid anti-administration partisans.

Suppose you are Hilda Solis, Obama-appointee as head of BLS. It is 8AM, Oct. 5. You have just been handed the report including the 7.8% unemployment and 870,000 household survey figures. You should: 1. order a double-check of all relevant data generation and calculation. 2. (assuming your results checked out) accompany a press release with an announcement that your sampling procedures produced one estimate that defies common sense. 3. Advise the public that no weighty conclusions be drawn from the 7.8% unemployment estimate, since it is highly suspect. 4. Invite scrutiny of your methods, results and checks by any interested parties.

What did the BLS do? Apparently, none of the above. Instead, they simply released the results with no special emphasis. (Later, Ms. Solis even refused to cast doubt on the suspect estimates and even defended them, somewhat obliquely.) This had the effect of inviting the general public, the press and even sophisticated analysts to take the information at face value. Quite a few people did. Others viewed it as a slap in the face. And some of those started to question the honesty of the whole process.

Why did the BLS do nothing instead of the right things? Their inaction may have been due to political bias or to bureaucratic inertia. In this case, the outcome of a Presidential election might ride on the procedures for handling a foul-up like this.

But the point would apply just as strongly if the data had been released on Nov. 7 or any other day. There are always important matters riding on the content of government data releases, and people want to believe that government employees are acting in good faith and providing reliable information. The best way to convince people that the government is here to help them is to go out of your way to do just that.

Polls Don’t Decide Elections

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By Julianne Malveaux

NNPA Columnist

In late September, the “nonpartisan” Web site Real Clear Politics reported that President Obama leads Republican nominee Mitt Romney is several battleground states.  According to the polls, President Obama leads by 5.2 percent in Ohio, 4.5 percent in Virginia, 4.2 percent in Nevada, 4 percent in Iowa, and 3 percent in Florida.  Do we believe the polls?  I’m not so sure.  But I surely don’t believe these polls should alter an aggressive effort to re-elect this Democratic president. There are lots of ways to do voter suppression.  One is to deny people ballots, or to change the rules on voting. Mandatory state-issued ID, new and more distant polling places, and all of the shenanigans documented by the Lawyers Committee for Civil Rights Under Law are methods of voter suppression. In some cities and states, police cars have been parked outside polling places, intimidating those who may have minor infractions of law, including unpaid parking tickets. Another ways to suppress the vote is to attempt to influence voter attitudes.  For example, in the 2008 election, a Republican operative did robo-calls to the Black community telling people they didn’t need to vote because Democratic candidates President Obama and Gov. Martin O’Malley of Maryland had already won.  He was convicted of four counts of fraud last year and faces jail time. Other communities have experienced similar pranks, including one that crudely told people that the election was on a Wednesday instead of a Tuesday, and another that said polls were open until 10 p.m., although they closed at 8p.m.. Well-informed voters repel these shenanigans, but some voters fall for them. If such tawdry tactics affect only a few voters in a few precincts, they can have an impact on an electoral outcome.  That’s why it is so effective to go door to door on Election Day, to provide rides for those who need them, and to do anything and everything to ensure that every voter gets out.  That’s why it also makes sense to encourage early voting, especially for the elderly and others who may have challenges getting to the polls.

I am wondering if these polls showing President Obama in the lead in key swing states represent another form of subtle voter suppression.  If we think the president is leading, then some will pull back on their efforts.  And that’s exactly what some Republicans are counting on.  Jay Cost, who writes for the conservative Weekly Standard, told radio talk show host Hugh Hewitt that “Democratic enthusiasm is going to recede.”

Another analyst said that the current polls are assuming a “record Democratic turnout.”  Still another said that while 90 percent of registered Republicans will vote for Romney and 90 percent of Democrats will vote for President Obama, the race will be decided by independents, many of whom are not polled.

My grandmother used to say, “Don’t feed me fat meat and tell me it ain’t greasy.”  Or, “Don’t spit on me and tell me it’s raining.”  In other words, don’t believe the hype.  To be sure, President Obama may be leading the polls in some states, but polls are like putting your finger in the air to see which way the wind blows. They are like calling the basketball game based on who is leading after the first half. They are like handicapping the horse race based on who is first out of the gate.  They tell a story about a point in time, but not about the outcome.

Thus, polling results are both good news and provisional news. The good news – the polls tell us that an Obama win is not only possible but likely. The provisional news – President Obama won’t win unless we work for it.  Imagine that the basketball team started chilling in the second half because they led in the first, or that the horse first out of the gate decided to slow up because, after all, the win was decided.  We’ve all heard about the flash in the pan, the tortoise and the hare, and the importance of persistence.

These polls ought to be a motivator for those who support President Obama.  The goal ought to be to make these poll results a reality by ensuring that Democratic enthusiasm increases, not recedes, and that Democratic turnout does hit record numbers.  It ain’t over til it’s over, and the outcome of this election will depend on the work that is done in the next several weeks. Julianne Malveaux is a Washington, D.C.-based economist and writer.  She is President Emerita of Bennett College for Women in Greensboro, N.C.

Why Romney and Ryan want to Eliminate Labor Unions

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By Bill Fletcher, Jr.

NNPA Columnist

Let’s be clear: The Republican ticket for the presidency – Mitt Romney and Paul Ryan – have their eyes set on eliminating labor unions from the U.S. scene.  No, they will not pass a law eliminating unions; they don’t need to.  The existing labor laws are so weak that they make it difficult for workers to join and form unions.  Additionally, Romney and Ryan would make sure to appoint individuals to the National Labor Relations Board and the Federal Labor Relations Authority who are eager to undermine unions. Further, they could just turn a blind eye to employer attacks on unions. Why?  The answer is quite simple.  As opposed to the Republican Party of the early 1970s that contained notables who accepted the right of workers to join and form unions, the situation has changed dramatically.  The Republican Party has become deeply hostile to workers having any organizations.  They like to portray unions as being contrary to productivity and growth.  Actually, the facts are a bit more complicated.  If you look at the construction industry, for instance, unionized construction is both more productive and of higher quality than non-union construction.  Repeated studies have demonstrated this.  Nevertheless, people such as Romney and Ryan do not wish to let the facts stand in the way of their opinions.

Fundamentally, Romney and Ryan see in unions an obstacle to their objectives of increasing wealth for those at the top.  Unions demand that workers receive fair compensation for the work that they provide.  Unions demand that working conditions be safe in order to protect the lives of the workforce, even if such protections cost the employer a little bit.  Unions demand that workers have retirement income so that the latter years of workers’ lives are not ones found in poverty, malnutrition and poor health.  Most of the world recognizes that these demands are basic human rights.  Unfortunately, the Romney/Ryan ticket looks at them as obstacles to profits. So, when you hear attacks on unions by Romney and Ryan, and suggestions that unions somehow get in the way of growth, it is fair to ask:  ”Whose growth?”  When you hear attacks on unions for being greedy, it is fair to ask:  ”Are unions responsible for all of the wealth going to the upper 1 percent of the population?”

Blaming unions, as popular as this is in many Republican circles these days, has a very simple objective:  to keep your eyes off of the prize, i.e., to keep you from focusing on who has the wealth and power.

Bill Fletcher, Jr. is a Senior Scholar with the Institute for Policy Studies, the immediate past president of TransAfrica Forum, the co-author of Solidarity Divided and the author of the new book introducing readers to unions entitled “They’re Bankrupting Us” – And Twenty other myths about unions. He can be reached at HYPERLINK "mailto:papaq54@hotmail.com"papaq54@hotmail.com.

Marching for the Sake of Marching

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By Julianne Malveaux

NNPA Columnist

Every time I see a march or rally, I think of the rally of all rallies – the 1963 March on Washington. Forty-nine years later, there is nothing that equals that march in results. These days folks march to make a point, but back in the day, we marched to get legislative action.  Shortly after the March on Washington, both the Civil Rights Act and the Voting Rights Act were passed.  I challenge anyone to tell me what other marches or rallies have yielded.  They’ve made a point, and galvanized people, yet they had no direct or immediate results.

I am thinking, in some ways, of the Occupy Movement, a self-admittedly leaderless group that has brought attention to corporate greed and growing wealth gap in our nation.  In many ways Occupy has been extremely effective in making a point, but the point has been lost with their many skirmishes with law enforcement officers, with the condition of the camps they set up, and with the vagueness of their demands.  It is specious and ineffective to call for the collapse of capitalism, as desirable as they feel such a goal might be.  Instead, the Occupy folks might agitate for tax reform that is redistributive, favoring the poor and middle class instead of the wealthy.  Such legislation will not end capitalism, but it will give people something to rally around.

Many people believe that the March on Washington was a spontaneous movement, but the march took months of planning.  The highly disciplined organizers vetted every speech and were mindful and deliberate about their goals.  To counter negative impressions of African Americans, many of the marchers dressed in their Sunday best.  All of the signs spoke to the civil rights movement, not to other issues. Today, marches seem to be a grab bag, with everyone with a cause carrying signs offering up their issues.  Again, people are marching almost for the sake of marching. The Montgomery bus boycott and the March on Washington were exceptional because of their focus and also because of their utter audacity.  Nearly 100 years after Emancipation, people of African descent were standing up for their rights, and given the long period of relative acquiescence, it was wholly unexpected that oppressed people would offer resistance to the status quo.  It was wholly unexpected that Black people would have the audacity to stand up. And, it was totally unexpected that a movement of African American people would inspire so many others to also stand up, In the wake of the March on Washington, the National Organization for Women (NOW) was founded.  In the wake of the march, the National Council of La Raza was founded, and in their own words, “traces its origins to the civil rights movement of the sixties.” The Stonewall riots happened in 1960, and gay rights marches began in the 1970s.

Unfortunately, the right win has appropriated some civil rights tactics with their own marches and movement.  Also, unfortunately, civil rights activism has become professionalized, with many activists now on the payrolls of either the government or of organization that rely on foundation funding.  In either case, activists are relatively muzzled, so that the radicalism of the 60s is muted by funding realities or government restrictions.  That former President Bill Clinton jettisoned Lani Guinier and President Barack Obama did the same thing to Van Jones is instructive.  Can activists coexist with government moderation?  Probably not.

Still, the nomination of Paul Ryan to be second on the Republican ticket is a cause for concern to anyone who has the slightest progressive tendency.  Ryan would trim the size of government, eliminating key agencies.  He opposes contraceptive rights and a woman’s right to choose.  He has not taken a position on any civil rights issues, but there is no evidence that suggests he is an ardent supporter of equality. Whether people take it to the streets or to the voting booth, it is clear that those who care about freedom have much to oppose on this Republican ticket. We can take a page from the March on Washington to organize a highly disciplined opposition to the odious positions that the official representatives of the Republican Party have taken.  Or, we can be silent, absent ourselves from the polls, and suffer the consequences.

Julianne Malveaux is a Washington, D.C.-based economist and writer.  She is President Emerita of Bennett College for Women in Greensboro, N.C.

Thieves Are Costing Businesses Big Time With Stealing Copper

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With copper selling for $3.50 a pound and recycling centers eager to buy and make money, stealing copper wiring has become a quick way for some criminals to earn money. Some have even lost limbs and their life trying to get copper from people’s air conditioners, city streetlights, and even utility companies generation stations. Legislators have started enacting laws to regulate the re-sale of copper. Law enforcement in Riverside and San Bernardino counties have even assigned units to help, but the problem continues and is rising.

This subject particularly hit home for us this week when the San Bernardino office of the Black Voice became the target for someone to make a quick buck by stealing copper wiring. In the process, they destroyed four a/c units that not only impact the office and staff, but our insurance, as well as the units themselves of course this happened on perhaps the hottest day of the summer.

We were not the only business affected this weekend. The reporting officer stated that four other businesses had been hit.

It is not only businesses that are hit some residents have found their home units have been stripped of copper so it is a problem that must be addressed by the community with law enforcement leading the discussion for solutions.

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