Mystery of the Missing Jobs

"Black market" job pool is growing

September's jobs report from the Bureau of Labor Statistics set off an uproar when it was released, per usual, on the first Friday of the following month. Former GE CEO Jack Welch said that the drop in unemployment, from 8.1 to 7.8 percent, was "unbelievable."

Welch charged "these Chicago guys" - the Obama administration - "will do anything" to boost the president's re-election prospects, including manipulating employment numbers. The thing that had Welch and many other critics in a tizzy had to do with a huge discrepancy in the government-collected data.

According to the BLS's payroll survey, the economy added only 114,000 jobs in September, which is essentially no growth. But its survey of households found many more new jobs reported, almost 900,000. If true, those would be truly extraordinary job gains. But what could explain the huge gap between the two surveys?

The current working theory is, there weren't that many job gains in September. Late reporting by some states caused the agency to lowball unemployment and, hey, flukes happen. In the jobs report for October, released Friday, unemployment was back up to 7.9 and could climb further still.

The message coming from many labor economists is, "These are not the employment droids you were looking for. Move along."

There is, however, one problem in writing off the improved unemployment numbers as a fluke, and it matters on this Election Day. The BLS was not the only entity to find superficially screwy job numbers. The polling organization Gallup also found a big dip in reported unemployment, suddenly down to a reported 7.1 percent.

We non-economists are entitled to wonder just what in the world is going on? Why are all of these jobs popping up in surveys of people but not of businesses? Where do they all go?

We already know that the economy is creating fewer full-time and more part-time jobs to get around the threat of fines for non-compliance with Obamacare mandates. These are not good jobs. They offer awful hours, low pay and usually no benefits.

Many low-skilled workers are responding by taking on work that is off the books and under the table and thus does not show up on payroll surveys. Poring over these employment numbers, it appears quite likely we are witnessing a massive expansion of America's black market.

Is the unemployment picture in the U.S. encouraging or discouraging?

[msoler29]

Bull crap. Jobs are better, I never had trouble finding a job in Florida.

[Kptpredsfan]

I live in tennessee, You can find some of these black market opportunities around here. Restaurants paying cash for people to deliver food, construction companies bringing in a few extra hands on days involving a lot of labor and paying under the table. I can see how the report could fluctuate a lot with that kind of activity going on.

[msoler29]

@Kptpredsfan
I hate when they give false statistics. Bush put us in a major depression , and they post up their hideous numbers

[ConserveUSA]

@Kptpredsfan I watched WMC TV 5 out of Memphis and they have reported on Labor Trafficking. Teens answered an ad in the newspaper in selling magazines and then they are taken advantage of, like they were ordered to sell magazine and Boss takes the money. Poor victim was beat up over gum and stole his cell phone plus have to rely on charity to get food. Our Government needs to get tough on these scams!

[msoler29]

@ConserveUSA
I just don't trust the polls. Special interest Companies are always involved in scans! They need to fix this!

[msoler29]

@ConserveUSA
The polls are putting Obama votes as Romney and they need to fix this glitche.

[DerivePI]

According to the jobs report (the official one), this country is not creating enough jobs to keep up with population growth. The good news is that more people are getting off of unemployment. The bad news is that they are getting off of unemployment by being removed from the labor market (ie no longer considered for the unemployment rate). Unless you were recently unemployed or actively seeking a job, you are not considered in the labor market.

[tomincali]

we bring in more workers than jobs without even slowing down,makes no sense at all. and if you care to look about 2/3 of all new jobs goes to new comers while citizens get the left overs.

[Calfkiller]

Is this the same jobs report that California failed to turn in any numbers for?

[Thunderchicken]

When government is too much of an impediment, people will find a way around it. Working for cash (or paying in cash) is much easier than going through all of the BS involved in an “on the books” job. People have been doing it forever.

[PayThatCEO]

Depends on which way you want to toss the coin. My son worked "under the table" for 2 years for a small mechanics shop. He's now going back to school for another welding certificate and has qualified for a Pell Grant because there's no record of him having worked. He'll better himself and be able to advance his career.

Sometimes what doesn't work out for some, works out for others.

[Thunderchicken]

@PayThatCEO

So your son found a way around a government placed impediment. Illegal as it is, sometimes that’s just what you have to do.

[AceLuby]

This is the same logic that people who hire illegals use.

[Thunderchicken]

@AceLuby

In some ways, yes. I can see a small business operator hiring an illegal on a short term, temporary basis. When it becomes a part of everyday business, then you’re running a risk of getting caught. The way I see it is the lower you are on the economic ladder, the more the laws are like guidelines rather than set in stone. One does what one needs to in order to make it. Not that I’m condoning that, but who hasn’t paid a neighborhood kid to clean gutters etc.

[AceLuby]

@Thunderchicken You can have your strawman back.

[Calfkiller]

I don't know. Obama get's K.O.'d at the first debate, and suddenly improbable if not impossible jobs numbers come out? I think i'm gonna go with the story they released the week it happened. That when turning in employment figures for September only 49 states turned in numbers for that month, another coincidence i'm sure.

[AceLuby]

Compared to what? Compared to the 90's it's discouraging. Compared to the 2000's it's about on par. Compared to four years ago it's glorious.

[mimi57]

"These Chicago guys (thugs) will do anything to bolster Obama's election", that says it all...if Obama wins, count
on lies, scams, deception and destruction. That is what they do, that is what the President believes. That the end,
justifies the means, no matter what.. if he wins Welcome to a new America, because "that's what these guys do".
He was held back from doing the brunt of his damage,due to wanting four more years to finish,if he gets the chance , he'll do his best to finish it this time.America will only have itself to blame...

[Amtrak_Sam]

Think it's more technically "grey markets" not black. Like a parallel economy. Being paid under the table to do perfectly legal work like delivering pizza or something isn't as shady as "black market" implies.

[markwho40]

its not got any better at all because obama just saying bull he has been all talk and no real action but you think any one is smart to know the wrong man is still in office

[92284_HEG]

It is encouraging. The rate of employment is getting lower at a slow and steady pace which is a good thing.

[kenderhulk]

Encouraging slow but steady. Job gains no job loses. Btw if tax reduction means jobs where r all the Bush jobs. Obama took over while losing 800000jobs per month.