An economist and reality
On today's Wall Street Journal opinion page you will find an essay by economist Allan H. Meltzer arguing that, thanks to some fluky contradictions in the statistics, this "recovery's" employment situation isn't as bad as it looks. Meltzer makes a reasonable case (though one that is more theoretical than based on hard evidence) that the jobless numbers look worse than they really are because the Labor Department's "Establishment Survey" records jobs shed by large companies faster than the government tracks jobs generated by small new companies.
What's happening in the economy today, Meltzer argues, is that a lot of big corporations are outsourcing lots of service jobs to other, often smaller, companies. So that the janitor who might once have shown up as an employee of BigCorp disappears from the government's numbers, and we think a "manufacturing" job has been lost, but that's not what's happened. Same number of jobs, same work being done: "In fact," according to Meltzer, "nothing real happened."
Oh, but there is one other little thing that Meltzer notes, almost as an aside: that worker "may receive fewer benefits and perhaps lower wages."
This strikes me as a critical point, both for said worker and for the economy as a whole, which is depending on consumers' purchasing power and which is trying to cope with a burgeoning health care crisis. But to Meltzer, all of this is "nothing real." Who cares if hundreds of thousands of workers are making less money and losing their benefits? "Nothing real."
It came as no surprise to read, in the author's description at the end of the piece, that Meltzer is affiliated with the American Enterprise Institute.
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