Stop Looking at the Unemployment Rate: The New York Example

 by Ray Keating

The Keating Files – October 20, 2020

 

Throughout my career as an economist, one of my pet peeves has been the unemployment rate. It’s widely cited by the media, politicians, and even fellow economists, yet it can be a grossly misleading economic indicator.

 

Why does the unemployment rate get so much attention? Well, it’s supposedly a straightforward picture of what’s happening in terms of jobs. After all, if the unemployment rate increases, that’s bad news; and if the unemployment rate drops, that’s good news. So, if you need a reliable number that tells the story on people working or not, just look at the unemployment rate, right? Well, no.

It turns out that a rise in the unemployment rate can occur when the jobs market is improving, and a drop in the unemployment rate can happen when the employment situation is getting worse.

 

The latest jobs data on New York provides an example that probably would surprise most. 

 

For September, the U.S. Bureau of Labor Statistics reported that the New York unemployment rate dropped from 12.5 percent in August to 9.7 percent in September. In addition, the number of unemployed declined from 1.19 million in August to 884,650 in September. 

 

That all great, right? Again, the answer is a resounding “no.” 

 

It turns out that the labor force in New York declined from 9.5 million in August to 9.13 million in September, and employment actually dropped from 8.31 million in August to 8.25 million in September. That is, the labor force decline by 362,889 and employment fell by 60,867.

 

Wait, employment fell and the unemployment rate declined? How does that work? Well, it turns out that the decline in the unemployment rate was all about a declining labor force. The unemployment rate is calculated as the number of unemployed as a share of the labor force. Leave the labor force, and you’re no longer counted. 

 

So, New York’s unemployment rate didn’t fall in September because the number of employed increased (indeed, the number of employed actually fell), but because a large chunk of people simply left the labor force altogether.

 

What’s better than the unemployment rate in terms of gauging the jobs market? Two measures – the labor force participation rate and the employment-population ratio. And it turns out that both declined in New York in September. 

 

The New York labor force participation rate (the percentage of the civilian noninstitutional population 16 years and older that is working or looking for work) declined from 60.8 percent in August to 58.5 percent in September, which is a drastic falloff. And the employment-population ratio (the percentage of the civilian noninstitutional population that is employed) in New York dropped from 53.2 percent in August to 52.8 percent in September.

 

So, to get the real story on the jobs market, toss aside the unemployment rate, and look at the numbers that actually matter. When doing that, it turns out that the jobs story for New York in September was quite negative.

 

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Recent and Related Columns by Ray Keating…

 

“Is Trump Toast?”

 

“Is Trump Turning Texas Purple?”

 

“A Flood of Bad Economics on Tech and Immigration”

 

“Polls Before the Dreaded Presidential Debates”

 

“Voting Your Conscience Isn’t Wasting Your Vote”

 

“Character-Rich Sci-Fi: Take the Netflix Journey with ‘Away’”

 

__________

 

Ray Keating is a columnist, novelist, economist, podcaster and entrepreneur.  You can order his new book Behind Enemy Lines: Conservative Communiques from Left-Wing New York  from Amazon or signed books  at RayKeatingOnline.com. His other recent nonfiction book is Free Trade Rocks! 10 Points on International Trade Everyone Should Know. The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

 

Keating’s latest novel is  The Traitor: A Pastor Stephen Grant Novel, which is the 12thbook in the series. The best way to fully enjoy Ray Keating’s Pastor Stephen Grant thrillers and mysteries is to join the Pastor Stephen Grant Fellowship! For the BEST VALUE, consider the Book of the Month Club.  Check it all out at https://www.patreon.com/pastorstephengrantfellowship

 

Also, tune in to Ray Keating’s podcasts – the PRESS CLUB C Podcast  and the Free Enterprise in Three Minutes Podcast  

 

Check out Ray Keating’s Disney news and entertainment site at www.DisneyBizJournal.com.

Review of Behind Enemy Lines

by Self-Publishing Review, ★★★★

The Keating Files – June 8, 2020

The journalistic side of Ray Keating’s writing comes to the fore in Behind Enemy Lines: Conservative Communiques from Left Wing New York. Boasting a traditional conservative voice that is measured, self-aware, confident, and persuasive, Keating’s arguments are original and thought-provoking, while many of the ideas explored in this book are surprisingly nuanced.

As a journalist, fiction writer, and general observer of life, Keating has written more than 8,000 columns and pieces over the past thirty years, remaining steadily in the lane of idyllic conservatism – family, God, and country matter above most else. Having read many of Keating’s Pastor Grant novels, the conservative bent to much of this book’s arguments is unsurprising. His iconic protagonist is a gun-toting, Constitution-defending, God-fearing vigilante hero, an appealing figure for a steadfast conservative operating in a bastion of liberal progressivism like New York.

Ranging from lauding praise on Margaret Thatcher and Ronald Reagan to questioning Obama’s ultimate motives and decision-making ability, these opinion pieces are anything but impartial, but they are also well-structured and level-headed. Criticisms of taxpayers picking up the NASA tab, scathing reviews of governmental function (regardless of party leadership), and discussions of the quiet titan of Christianity within American politics are just a few of the subjects touched on in this unexpectedly riveting collection.

Keating’s journalistic style is similarly fearless to his fiction writing, unafraid to dabble in any realm and apply his firmly held beliefs into peaceful debate with those who would disagree. Unlike so much other conservative writing in recent years, especially pro-Trump partiality, Keating has a frank and honest voice that appears to be morally uncompromised. He makes it clear that while his economic, social, and geopolitical opinions may fall on the conservative spectrum, his principles are still very much in place...

Read the rest of this review here...

Ray Keating Talks about His New Book BEHIND ENEMY LINES: CONSERVATIVE COMMUNIQUES FROM LEFT-WING NEW YORK

BEHIND ENEMY LINES serves up a wide-ranging collection of columns and essays from Ray Keating. These essays cover politics, economics, faith, history, trade, New York, foreign affairs, immigration, pop culture, business, sports, books, and more. 

You’ll find paperbacks and the Kindle edition at Amazon.com via https://www.amazon.com/dp/B086PN1NNZ

In these often confusing and contradictory times, Keating describes his brand of conservatism as traditional, American and Reagan-esque, firmly rooted in Judeo-Christian values, Western Civilization, the Declaration of Independence, the U.S. Constitution, and essential ideas and institutions such as the Christian Church, the intrinsic value of each individual, the role of the family, freedom and individual responsibility, limited government, and free enterprise and free markets.

Keating is a longtime newspaper and online columnist, economist, policy analyst, podcaster, and novelist.

Pre-Order BEHIND ENEMY LINES: CONSERVATIVE COMMUNIQUES FROM LEFT-WING NEW YORK - Signed by Ray Keating

NEW! Sale on the PRE-ORDER of BEHIND ENEMY LINES: CONSERVATIVE COMMUNIQUES FROM LEFT-WING NEW YORK - Signed by Ray Keating – Go to https://raykeatingonline.com/products/behindenemylines

Here’s a wide-ranging collection of columns and essays from Ray Keating covering faith, economics, politics, history, trade, New York, foreign affairs, immigration, pop culture, business, sports, books, and more.

Keating is a longtime newspaper and online columnist, economist, policy analyst, and novelist. 

In these often confusing and contradictory times, Keating describes his brand of conservatism as traditional, American and Reagan-esque, firmly rooted in Judeo-Christian values, Western Civilization, the Declaration of Independence, the U.S. Constitution, and essential ideas and institutions such as the Christian Church, the intrinsic value of each individual, the role of the family, freedom and individual responsibility, limited government, and free enterprise and free markets.

Here are the major sections of Behind Enemy Lines from the Table of Contents...

• Introduction: What is Conservatism?          

• Faith Matters

• Economics Isn’t Dismal ... Unless Left to Politicians, the Media and Professors    

• Politics: Unsavory and Not-So-Unsavory

• Why Does Anyone Live in New York?          

• The Not-So-Ugly American

• Trying to Learn from History

• Business Isn’t Evil

• Trade: Opportunity and Stupidity

• Immigration: Hope and Opportunity

• Pop Culture Ponderings

• Sports: The Great Diversion ... Mostly

• Thoughts on Assorted Books

Leaving New York: No Mystery as to Why People Flee the Once-Empire State

by Ray Keating

The Keating Files – February 5, 2020

Depending on how the rest of the day is going, politicians can make you laugh or cry. That’s especially the case in New York. But even when laughing, it’s dark, cynical humor.

Consider the example of two members of the New York state legislature – State Senator Jim Tedisco (R) and Assemblyman Angelo Santabarbara (D) – who recently announced that they were going to get to the bottom of why people are leaving New York. Seriously?

The two politicians plan to do an online questionnaire, host roundtables, and put a report together. In a statement, Santabarbara said, “Let’s reach out to New Yorkers to find out what’s happening.” And Tedisco added, “The elephant in the room that our state government’s not talking about is why New York State is number one for highest population loss in the nation?”

New York shipping people off to other states isn’t exactly a new development.

How bad has it been? Net domestic migration measures the change in a state’s population less births, deaths and international migration. That is, it captures population movement between the states. New York had the worst record from 2010 to 2019 by losing a net 1,379,210 people to other states. And from 2000 to 2009, New York again was tops in shipping people off to other states, with net domestic migration of -1,686,583. From 1990 to 1999, when New York lost a net of 1,888,936 in population to other states, that wasn’t the worst. It was second worst, with only California losing more people to other states.

In terms of total population, from the early nineteenth century to 1970, New York had the largest state population. Then it was passed by California. Texas moved by New York into the number two spot in 1994, and Florida bumped New York from number three in 2014. 

If it weren’t for international immigration, New York would be a ghost state. And in fact, New York’s total population has declined for the last four years in a row, that is, in 2016, 2017, 2018 and 2019.

So, isn’t it nice that a couple of New York politicians have gotten around to starting to ask questions about this decades-long trend? But they don’t need polls or roundtables. It’s obvious why people have been fleeing New York. 

For example, New York inflicts very high personal, corporate and capital gains taxes. 

Indeed, consider what passes for corporate tax reform in New York. Before the reform passed in 2014, the total corporate income tax rate for businesses in the lower part of the state – the stated tax rate plus a business tax surcharge – came in at 8.307 percent. In 2020, the rate stands at 8.864 percent. Yes, that’s right, the corporate income tax rate for the bulk of businesses in the state is higher after “tax reform.” Only in New York.

Property taxes as a share of personal income in New York also are sixth highest in the nation, according to the latest Census Bureau data. That’s a state average, by the way. The property tax burden is much higher in places like Westchester and on Long Island.

Gas and diesel taxes are among the nation’s highest. Sales taxes are high. The list goes on and on.

The entire state tax, regulatory and spending regime is overtly hostile to entrepreneurship, business and investment. The Small Business & Entrepreneurship Council’s “Small Business Policy Index 2019: Ranking the States on Policy Measures and Costs Impacting Entrepreneurship and Small Business Growth,” which I author, ranks the 50 states according to 62 different policy measures, including assorted tax, regulatory and government spending measures. New York ranked an abysmal 47^th, or fourth worst, among the states. 

Crush business with burdens, and the result is reduced opportunity for all.

So, it’s no secret why people have been leaving New York: It’s overwhelmingly about intrusive, costly big government inflicting all kinds of burdens on individuals, families, entrepreneurs, businesses and investors. Why live, work, invest, and/or start up and build a business in New York when New York is so overtly hostile to working, investing, entrepreneurship and business? One can move to almost any other state in the nation, and by doing so, expand opportunity and improve quality of life.

Tedisco said that “our state government’s not talking” about why people are leaving New York. Golly, I’m just shocked. After all, the reasons for this long, vast exodus have been the decisions made by those in state (and local) government. 

Will this legislative report serve as a catalyst for substantive change in New York? That’s funny (again, dark humor). More typically, like so many other reports generated by government, it will get brief attention and then be forgotten. And politics as usual will continue in the once-Empire State. 

Hmmm, it seems like the only real answer is to, well, leave New York.

__________

Ray Keating is a columnist, an economist, a novelist (his latest novels are The Traitor: A Pastor Stephen Grant Novel, which is the 12^thbook in the series, and the second edition of Root of All Evil? A Pastor Stephen Grant Novel with a new Author Introduction), a nonfiction author (among his recent works is Free Trade Rocks! 10 Points on International Trade Everyone Should Know), a podcaster, and an entrepreneur. The views expressed here are his own.

Trump, Clinton and Sanders: Welcome to New York, America

by Ray Keating

For some bizarre reason, I’ve chosen to live my entire life in loopy New York. From a political standpoint, that has meant suffering under a one-party system. This New York reality is now spreading across the nation in the current presidential race.

Hillary Clinton, former U.S. senator from New York, squares off with Bernie Sanders, originally from New York, on the Democrat side, and New York City businessman and reality TV star Donald Trump leads among Republicans.

But what do I mean by this “one party” comment? Yes, New York is a deep blue state, but there are Republicans in the state. In fact, Republicans still have effective control of the state senate – barely. The problem is that both parties, for the most part, are Democrats.

The New York Democratic Party ranks among the most hard core of Democrats. They are unabashedly left wing, whether on economic matters or social issues.

Meanwhile, New York Republicans amount to little more than Democrat-Lite. They love big government; are a mixed bag, at best, on most social issues; and are far too interested in pandering to keep some sliver of power. Notions that Republicans should be principled in any way, and work to change hearts and minds on the issues, are treated as an absurdity. Sure, there’s a real conservative here and there in New York, but they are the exceptions. There’s a reason why New York has a Conservative Party. It was created in 1962 to serve as a conservative check on the Republicans, and that need has not gone away for more than a past half-century. Apparently, few Republican Party leaders grasp the idea that if voters have a choice between Democrats and Democrat-Lite, they’re more likely to choose the real thing. And hence, the long decline of Republicans in New York.

Welcome to New York, America.

Turning to the current presidential campaign, the Clintons, of course, chose to move to New York as this Democrat state would give her an excellent shot at winning a U.S. Senate seat. In her 2000 victory, Mrs. Clinton was helped by the fact that Republicans made a complete mess of matters, with Rudy Giuliani dropping out of the race and being replaced by Congressman Rick Lazio, who ran an inept campaign.

Of course, Clinton is an unabashed liberal on nearly every issue imaginable, from abortion to taxes to foreign policy, and beyond. That’s no secret.

Meanwhile, Senator Bernie Sanders, a New Yorker for the first 27 years of his life before moving to Vermont in 1968, manages to stake out ground to the left of Clinton. That’s not easy. But, heck, the guy warmly embraces the socialist label. What else needs to be said?

Welcome to New York, America.

And then there’s Donald Trump. Given his flip-flopping on nearly every major issue, his being devoid of any principles, and his willingness to say just about anything to gain power, along with an inability to think and express himself clearly on issues, Trump rather nicely fits the New York Republican model.

Welcome to New York, America.

In fact, America has become New York. The Democrats serve up radical Lefties. The current leader among Republicans lacks any kind of commitment to or understanding of conservatism and conservative policies.

Funny, I thought New York long ago no longer mattered when it came to national politics. Silly me.

______________

Mr. Keating is an economist and novelist who writes on a wide range of topics. His Pastor Stephen Grant novels have received considerable acclaim, including The River: A Pastor Stephen Grant Novel being a finalist for KFUO radio’s Book of the Year 2014, and Murderer’s Row: A Pastor Stephen Grant Novel winning Book of the Year 2015.

The Pastor Stephen Grant Novels are available at Amazon…

Murderer’s Row: A Pastor Stephen Grant Novel

The River: A Pastor Stephen Grant Novel

An Advent for Religious Liberty: A Pastor Stephen Grant Novel

Root of All Evil? A Pastor Stephen Grant Novel

Warrior Monk: A Pastor Stephen Grant Novel