Bad math, good math — and Iowa jobs

The Governor will do what the Governor wants to do. But that doesn’t mean the rest of the state or its policymakers should take their eye off what’s really happening in our economy.

Those 31 points the Iowa Hawkeyes scored last Saturday were something, huh?

It sure feels better when you don’t include Maryland’s 38 points. And that’s the way Governor Branstad counts jobs.

Enough with the bad math, and let’s talk about those Iowa jobs.

The actual job performance of Iowa’s economy is pretty simple to compute from the state’s official spreadsheet, which shows seasonally adjusted, nonfarm jobs, month by month and sector by sector, back to January 2008. You can find that sheet here.

Doing it wrong

As we have pointed out in the past on this blog, the Branstad administration chose to edit the official spreadsheet by adding a special line that only shows increases. No job losses are counted. Ask anyone who’s lost a job whether that sounds reasonable. But when you’ve promised 200,000 jobs in five years, you have to get there somehow.

A snapshot of the key but distorted line is highlighted in the photo at right. Basic RGBThat line, “Gross Over-the-month Employment Gains,” ignores the monthly performance of any job sector showing a decrease. Instead, the increases in the other job sectors each month are added, and the total inserted into the “Gross Gains” total compiled from previous months during the Governor’s current term. Twisting the numbers this way, the Governor has reached 156,500 — almost twice the actual increase since he took office.

In September, the Governor’s math turns a 1,300-increase month into 4,900. A happy result, but false.

Doing it right

The Iowa Policy Project has put out a monthly analysis of state job numbers for 11 years now. And as we point out in our latest Iowa JobWatch, not only is the Governor’s number exaggerated, but there is a better approach that does not tie him to his ambitious and apparently unreachable goal.

If you want to measure progress, you measure everything. And that’s simple: How many jobs were there in the base month, and how many are there in the latest one?

So, for the real math as of September 2014:
— Since the Governor took office in January 2011, Iowa has added 80,000 jobs.
— The pace of job growth in those 44 months has been about 1,800 jobs per month.
— To reach the Governor’s goal of 200,000 by January 2016, the next 16 months would have to show an average monthly increase of 7,500.

More importantly, the best way to look at job growth is to remove the artificial political frame and examine it the way economists would. The Economic Policy Institute came up with a sensible measure, from a relevant starting place: the start of the last recession. Look at the job change from the start of the last recession and compute what would be needed to (1) make up lost jobs and (2) keep up with increased population, which for Iowa is about a 5 percent increase.

In this approach, we can see that as of September 2014:
— Iowa showed a net gain of 31,300 net jobs since December 2007.
— To keep up with population growth, Iowa needed a net gain of 76,800 jobs from the December 2007 level of 1,524,900.
— Iowa has a jobs deficit of 45,500.

Basic RGB

The Governor will do what the Governor wants to do. But that doesn’t mean the rest of the state or its policymakers should take their eye off what’s really happening in our economy.
Owen-2013-57
Posted by Mike Owen, Executive Director

Author: iowapolicypoints

The Iowa Policy Project is a nonprofit, nonpartisan organization that provides research and analysis to engage Iowans in state policy decisions. We focus on tax and busget issues, the Iowa economy, and energy and environmental policy. By providing a foundation of fact-based, objective research and engaging the public in an informed discussion of policy alternatives, IPP advances effective, accountable and fair government.

1 thought on “Bad math, good math — and Iowa jobs”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s