The Obamacare Discrepancy in Jobs

Mike Shedlock
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Posted: Jan 12, 2014 12:01 AM
The Obamacare Discrepancy in Jobs

The wide discrepancy between jobs and employment continues for a third month.

Jobs vs. Employment Discussion

Before diving into the details, it is important to understand limits on data, and how the BLS measures jobs in the establishment survey vs. employment in the household survey.

Establishment Survey: If you work one hour that counts as a job. There is no difference between one hour and 50 hours.
Establishment Survey: If you work multiple jobs you are counted twice. Neither the BLS nor ADP weed out duplicate social security numbers.

Household Survey: If you work one hour or 80 you are employed.
Household Survey: If you work a total of 35 hours you are considered a full time employee. If you work 25 hours at one job and 10 hours at another, you are a fulltime employee.

Following are numbers from today's BLS jobs releases.

December 2013 vs. December Prior Years

Category

DEC 2008

DEC 2009

DEC 2010

DEC 2011

DEC 2012

DEC 2013

Employed Household

143,369

138,013

139,266

140,836

143,212

144,586

Jobs Establishment

134,425

129,373

130,395

132,498

134,691

136,877



Monthly Averages December 2013 vs. December Prior Years

Category

DEC 2009

DEC 2010

DEC 2011

DEC 2012

DEC 2013

Yoy Change Household

(5,356)

1,253

1,570

2,376

1,374

Yoy Change establishment

(5,052)

1,022

2,103

2,193

2,186

Monthly Average Household

-446

104

131

198

115

Monthly Average Establishment

-421

85

175

183

182



Notice how closely in sync the household survey has been to the establishment survey in terms of average gains or losses. A divergence developed in 2013.

Here is the data I posted last month (I did not check for revisions).

November 2013 vs. November Prior Years

Category

Nov 2008

Nov 2009

Nov 2010

Nov 2011

Nov 2012

Nov 2013

Employed Household

144,100

138,665

139,046

140,771

143,277

144,386

Jobs Establishment

135,130

129,593

130,300

132,268

134,472

136,765


Monthly Averages November 2013 vs. November Prior Years

Category

Nov 2009

Nov 2010

Nov 2011

Nov 2012

Nov 2013

Yoy Change Household

(5,435)

381

1,725

2,506

1,109

Yoy Change establishment

(5,537)

707

1,968

2,204

2,293

Monthly Average Household

-453

32

144

209

92

Monthly Average Establishment

-461

59

164

184

191



Last month the discrepancy between reported employment and reported jobs was 191,000 - 92,000 = 99,000.

This month the discrepancy between reported employment and reported jobs is 182,000 - 115,000 = 67,000.

These discrepancies started in 2013.

I asked the BLS to take multiple social security numbers into consideration. They cannot because all they have is raw counts. ADP could, but wouldn't, citing privacy issues.

However, there are no privacy issues. A program would be trivial to write, but most likely one would not even have to do that. A sort utility extracting and counting duplicate social security numbers would suffice.

I believe Obamacare is the reason for the discrepancy.

Obamacare Effect

Prior to Obamacare
34 hours worked = 1 parttime job household survey
34 hours worked = 1 job establishment survey

Enter obamacare
Person cut back to 25 hours and takes a second job for 10 hours
Here is the new math

25 + 10 = 1 fulltime job on the household survey.
25 + 10 = 2 jobs on the establishment survey.

In my example, the household survey totals up all the hours and says, voilla! (35 hours = full time). So a few extra hours that people pick up working 2 part time jobs now throws someone into full time status – thus no surge in part-time employment, but there is a surge in jobs.

Establishment Survey Jobs Surge Ended This Month

Interestingly, the surge in jobs in the establishment survey ended today. See Big Miss: Nonfarm Payrolls +74,000 vs. 205,000 Expected; Unemployment Rate 6.7% as Labor Force Shrinks by 347,000.

Two Possibilities

  1. Perhaps today's weak job report is a one-time thing. Some economists blamed the weather.
  2. The other possibility is the Obamacare effect has mostly played out, and Establishment Survey results going forward will not get a multiple job boost for the rest of the year.


If the Obamacare multiple job surge has indeed played out, monthly establishment survey job gains are going to be weaker than most expect for 2014.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Read more at http://globaleconomicanalysis.blogspot.com/2014/01/employment-vs-jobs-discrepancy-december.html#creAwK9PAfe2hgPZ.99