Last night, Fox’s Sean Hannity defended Gov. Bobby Jindal (R-LA) and attacked our recent analysis of the Louisiana labor market. In response to Jindal’s rejection of stimulus funds to expand unemployment benefits, which would benefit 25,000 unemployed workers in Louisiana, we calculated that there were 430 new unemployed people in Louisiana for each day in December.
Claiming that the “folks at the Center need to make some progress on their math skills,” Hannity pointed to an employer payroll survey showing that Louisiana added jobs in December. Watch it:
We wonder –- are Hannity and Jindal trying to assert that the fundamentals of the economy in Louisiana are strong? While their statements are technically true, the statistic they are highlighting tells us the number of jobs — not the number of people who are unemployed.
Here’s where the confusion lies: In our headline, we should have said Louisiana had 430 new unemployed people for every day in December, as opposed to 430 jobs being lost.
There are two primary ways that the government measures the labor market: the employer payroll survey and the household survey. Hannity and Jindal are relying on the fact that the employer survey, which asks businesses about additions and subtractions from their payrolls, showed that businesses added jobs (although even this measurement is down .4 percent for Louisiana from its peak in August 2008).
The household survey, however, asks members of households whether or not they have jobs or are looking for work. This measures the unemployment rate, which has been rising steadily in Louisiana, from 4 percent in December 2007 to 5.9 percent in December 2008. There was also an increase from 5.3 percent in November 2008 to 5.9 percent in December 2008. This statistic is more pertinent to the discussion at hand, since we are debating unemployment benefits.
We believe that rejecting additional funds for unemployment benefits at a time when unemployment in Louisiana is rising is an unwise decision. However, the people of Louisiana will have the final say on whether that is the right thing to do.
(Additional note on the data: the two measurements described here, the employer survey and the household survey, can diverge for several reasons. Many low-income people have multiple jobs, so an economy can add and lose jobs without necessarily increasing or decreasing the ranks of the unemployed. Changes in the labor force, such as population inflows or people graduating from school and looking for work, will affect the unemployment rate but not the payroll employment.)