Wednesday, November 14, 2007

Job Losses, Job Gains, and Job Churn

Russell Roberts has a great column on why we shouldn't worry about the trade deficit. He makes a simple point, but one that ought to be repeated until it penetrates. Here's my favorite bit:
In a recent Republican presidential debate, one of the moderators said that since 1989, the United States has lost 5 million jobs to foreign trade. He wanted to know what the candidates were going to do about it.

I have no idea how you measure that number, but the implication was that 5 million lost jobs over 18 years is a big number. Five million is a large number if we’re talking about the number of pennies I have to carry in my pockets. It’s a big number if we’re talking about the number of people coming to my kid’s birthday party. But it’s a very small number when you’re talking about job destruction and the job creation that follows in a dynamic economy.

On the first Friday of every month, the U.S. Bureau of Labor Statistics produces an estimate of how many new jobs are added to the U.S. economy. That’s the net change, the gains minus the losses. The bureau also estimates quarterly gross job changes, the absolute number of jobs created and destroyed. In the fourth quarter of 2006, there were 7.7 million jobs created and 7.2 million jobs lost. That happens every quarter when there isn’t a recession — that’s how you add 50 million jobs over three decades.

Five million jobs lost over 18 years? Every three months, the U.S. job market more than makes up for those losses.

No comments: