Duped by the Face of the Labor Market?
What is the true face of the U.S. labor market? Some leading economists thought they had a clue. However, they turned out to be off. Way off.
With the release of the July 2022 U.S. “Payroll Report,” this past Friday, a shocking revelation glared across media headlines and out of pundits mouths. Job creation numbers for the month more than doubled what economists had estimated. 528,000 new jobs were created verses an expected 250,000, to be more precise.
Regardless of one’s familiarity with economics, it is understandable how such an undershoot came across as a complete shock. To cause even more head scratching, the report indicated a decline in total labor force participation at the same time. These two indicators, existing within the same report, was initially perceived as contradictory.
Initially, I was merely curious as to how the calculations that inform the estimates of the top U.S. economists could be so far off. Up until Friday, I never actually read through a monthly U.S. “Payroll Report.” I have been simply reading or listening to recaps and highlights in the media cycles. So, I tried to look at the direct source of the data, to see what all of the fuss was about. However, when I Googled “July 2022 Payroll Report,” I could not find an original report under that specific title. Turns out the term “Payroll Report” is merely the way the media refers it.
The monthly U.S. payroll reporting comes from the U.S. Bureau of Labor Statistics’s (BLS) “The Employment Situation” report. And yes, there appear to be multiple employment situations in the current U.S. labor market.
For those who may work with broad ranges of data sets outside of national economic narratives, and/or conduct user experience (UX) type work, you too may have a similar reactions upon reviewing the U.S. “The Employment Situation” report for the first time, as I did. Or, if you have viewed such types of reports before, perhaps you have wondered what it could be like if the way the data is captured and organized was reimagined.
Good quality data is subject to the quality of one’s data management plan (DMP). Investing in the curation, generation, categorization, and organization of data, ahead of the process of data analysis, and eventually data reporting, can lead to better data quality and analysis. Furthermore, practicing data science should not be a linear process. It beckons back-and-forth conversations, refining and improving the process, which should not be exclusively dependent on computers. Practicing collaboration, inclusion, critical thinking, and storytelling as part of the process as well.
What I am teeing up here is that perhaps part of the reason why many economists are likely to over or under shoot their estimates at times is because of visible cracks that exist within the very foundation of employment and payroll reporting and the data management approaches they emerge from.
For one, that the American workforce is still categorized in a partial binary construct of “nonfarm,” indirectly implying a category of “farm” employment, is not an accurate representation of the employment and labor market of the twenty first century. The workforce is more complex than being a mere bunch of nonfarmers. And, as technologies have evolved over the years, in service of the workforce and labor needs, it [technology] has become a great influencer and more active participant of the American workforce/labor force as well.
Data Management over the Course of a Century and Beyond
Nineteen years after the Civil War ended, the U.S. Bureau of Labor was founded. It evolved to become the BLS, established in 1913, a few years into The Great Migration. In 1915, before the U.S. entered World War I, before women’s right to vote was written into law, before the Fair Labor Standards Act passed, and before the civil rights era, the BLS began conducting monthly studies on employment and payrolls in America. The practice was created within an era where farming was a great point of relativity for the U.S. economy. It was a time before the existence of many scientific, technological, and social advancements that would come to be. How such catalysts over the years shape(d) and/or expose(d) the integrity of U.S. labor data management beckons further investigation.
Below are some snap shots from the “Current Employment Statistics — CES (National)” for July 2022. Looking at the data sets, underneath the category of “nonfarm,” what questions come to mind? Can you extrapolate which employment by industry is technology-based verses services based? Do not both the Education Industry and Health Services industry of today warrant their own data sets, verses being paired together?
Bloomberg Reporters Catarina Saraiva and Maria Paula Mijares Torres, extracted from the July 2022 report that the number of employed women in the U.S. grew by 327,000 last month, where as the numbers for men’s employment declined, for the fourth month in a row, by 1.6 percent. Nevertheless, both categories of employment types were higher than the advent of the pandemic. That is something to celebrate. Yet, questions should be raised about the quality of jobs made available in the labor market, and the rate of pay equity. How many people hold multiple jobs? Did over 300K women workers get a full-time job with health benefits? Or, did a large portion of the women who entered the labor force get more wage-based work in industries that are seeing greater gains like leisure and hospitality? That industry is cited as being the biggest employer of women, yet is one that predominately wage-based.
Under the the category of “Class of Worker” wage and salary workers are grouped together as one category, including “self-employed workers whose businesses are incorporated.” Packing such data sets together seems messy. Would not being able to drill down, to see by type, lead to more accurate economic and labor market assessments. It could also better help convey a clearer picture on the state of gender-based pay equity within the labor market.
On the topic of education, why not include vocational means of education as well? They too are pathways for Science, Technology, Engineering, and Mathematics (STEM)-base learning. Not to suggest that traditional education achievements are not of great value and important pathways. I highly value education. At the same time, merely crossing the milestones that these reports measure (“Less than a high school diploma,” “High School Graduate,” “Some college…,” and “Bachelor’s degree and higher”) does not adequately provide insight as to America’s technological-literacy levels for instance.
Consider the possibility that someone who has recently had “some college” could potentially know more about contemporary technologies and have particular skills that make them a better candidate for the tech-dependent job of today, compared perhaps to someone who earned a bachelor’s degree or higher, before the advent of the iPhone in 2007.
I am not suggesting that there is a direct correlation between a person’s age and their technological literacy. I am highlighting the long-standing trend that curriculums are generally based upon what is past, current, and for some, the very short-term future. Without some form of continuing education (formal or informal), keeping up with the advancements of the latest labor-based technologies, which came to be after one has completed a level of education, can become a great challenge for many, and a risk factor the U.S. economy. Gaps between quality job, availability, and labor participation rate could widen with out address.
For recall, technology now touches upon all categories of work—farm or nonfarm based—to some degree. Whereby, technology has rapidly evolved to be a major force within the U.S. economic landscape. Last year, Deloitte Insights published an article, “The tech workforce is expanding — and changing — as different sectors battle for talent,” which dives deeper on this point.
Though there are many PROs, when it comes to technological labor advancements there are several CONs as well. Consider how HR departments and teams are growing more reliant on A.I. technology to sort through job applications. Yet, A.I. recruitment tools are currently highly prone to great bias due to the biases that exists within people and the content people disseminate. To a degree, some A.I. learn from a biased-social script, which they as “smart” tech can amplify. As a result, many qualified candidates are getting overlooked in the labor market.
There needs to be greater synergy between people, technology, and how we work together in the labor market. We need clearer pictures of what is really happening now to better plan for the future. Even farmers have Dells. To better plan ahead for the future of work, we need better data management plans now!
Painting a New Picture?
After I learned the real name of the “Payroll Report” and truly engaged with “The Employment Situation” report for the first time, the painting American Gothic. by Grant Wood (1930), came to mind
Wood’s painting evolved to become a cultural icon, under the mask of satire. The amount of parodies that the painting has inspired over the decades is numerous. Many have projected narratives, assumptions, and spins to Wood’s painting. For one, it has become common thought that the woman standing to the left of the farmer in the painting is his wife, when in fact the artist envisioned her to be the farmer’s daughter. Wood had his sister, Nan Wood Graham, who was an artist and teacher, and the Wood family’s dentist, stand in as his models.
It was Wood’s intention to positively portray his perception of rural America’s values, at the early onset of the Great Depression. Small Gothic-revival architectural details, from an actual house he saw in Iowa, inspired the backdrop and name of the painting. However, in light of my new awareness of the economic term “nonfarm employment,” in conjunction with the contemporary landscape of the workforce and labor market, my interpretation of this painting’s history and story has now morphed into something else.
That Wood used actual “nonfarmers” to stand for him, as he painted a picture to represent a farm-based household, to embody strong America’s values, well, Wood’s art still continues to have the uncanny ability to spark dialogue, from multiple points of view, nearly a century later. I have now become another person to make a form of satire out of his painting, with the abstract graphic art piece I created above. However, out of respect for the artist’s art, I am also including a representation of his artwork as it was intended.
