A Project of The Annenberg Public Policy Center

Richardson’s Job Boast


Summary

Democratic presidential contender Bill Richardson boasts of creating 80,000 jobs since becoming governor of New Mexico. Not yet, he hasn’t. The state has gained fewer than 76,000 payroll jobs since he took office, and official figures showed a mere 68,100 gain when he first started making his inflated boast last year. He bases his claim on a definition of “jobs” that includes unpaid workers in family businesses and freelancers who don’t draw a paycheck.

Richardson also claims he “made New Mexico 6th in job growth,” which is misleading at best. In fact, the state already ranked 6th for the 12-month period before he took office. It has ranked 6th for a few selected months since, but it currently ranks 17th.

Analysis

We’ll start by saying that the truth about Richardson’s job record is actually quite respectable and hardly needs the sort of petty exaggeration we find in Richardson’s TV ads, interviews and stump speeches.

As can be seen in the chart below, the number of payroll jobs in New Mexico has increased by nearly 10 percent since Richardson took office Jan. 1, 2003. The state is far from being the standout in the fast-growing Sun Belt region, lagging well behind neighboring Arizona and nearby Nevada, each of which has experienced job growth more than twice as fast. Utah and Wyoming, to which New Mexico state labor officials regularly compare their growth, also outpaced the state handily. But New Mexico’s job growth is nicely above the 6.1 percent gain for the nation as a whole during the same period. The unemployment rate for the state is now 3.7 percent, substantially below the 4.6 percent rate for the nation.

Not true then …

The job picture is not, however, quite as rosy as Richardson keeps claiming. As early as Dec. 13, 2006, he said on CNBC’s “Kudlow & Company” program, “Our economy is growing. We’re – created 80,000 new jobs.” When he made that statement the most recent figures available from the U.S. Bureau of Labor Statistics had been announced in a news release issued Nov. 21, covering the month of October 2006. The preliminary figures in that release showed a gain of 68,100. That was later revised upward to 69,000 and still later to 69,100. But the governor couldn’t have known that when he spoke, and even the revised figures fall far short of the gain he claimed.

[TET ]

Richardson for President “Focused”

Announcer: The New Mexico comeback, a model for the nation. Governor Bill Richardson started with tax credits for creating jobs that pay above the prevailing wage. He passed a permanent rural jobs tax credit and invested in brand new industries like wind and solar energy, aerospace and laser technology. Over 80,000 new jobs, up to 6th in the nation for job growth.
Richardson: I’m Bill Richardson and I approve this message because we need a president who is focused on good paying jobs again.

[/TET]

Nevertheless, Richardson has continued to use the 80,000 figure as a centerpiece of his presidential campaign. On Feb. 2, Richardson told the Democratic National Committee’s winter meeting: “We have created 80,000 new jobs.” He says the same thing on his Web site, in news releases and in TV ads, including a 60-second ad that ran in New Hampshire and Iowa during April and May, and a spot that started running in Iowa Aug. 14.

 … And not true now
New Mexico has continued to gain jobs but still hasn’t caught up with Richardson’s inflated figure. The most recent BLS figures put the state payroll employment for July just 75,800 above where it stood the month before Richardson was sworn in. His recent ad would be stretching things only a little if it said “nearly 80,000 jobs,” but saying “over 80,000” simply doesn’t square with payroll figures.

Richardson’s definition of “jobs”

Here we should explain that the standard definition of “jobs” that is used by practically all economists, journalists and political leaders of both parties is payroll employment. This is the figure that journalists refer to in monthly stories about job gains or losses in the economy and that the Bureau of Labor Statistics posts prominently on its Web site as the prime indicator of job growth or loss. This figure (technically called “total nonfarm employment, seasonally adjusted”) is projected from payroll records of 400,000 business establishments nationwide, sampled monthly in what is known as the “establishment survey.”

When we asked Richardson’s aides to justify the 80,000 figure, they pointed to a different BLS survey, called the “household survey,” which is used to calculate the unemployment rate but not normally cited to gauge the number of jobs gained or lost. The household survey uses a much smaller sample, for one thing. It covers 60,000 households, while the payroll records of the establishment survey include millions of workers. But more importantly, the household survey counts as “employed” a lot of persons who don’t have payroll jobs. Included, for example, are unpaid workers in family businesses, domestic help and self-employed workers such as day laborers. The Richardson campaign makes a point of saying, as it did in an Aug. 17 news release, that “many” of the new jobs are “in high tech and other new industries that pay well.” That may be so, but they get their 80,000 figure by counting some unpaid workers, day laborers and others without a paycheck.

Weasel words

Richardson’s latest ad says New Mexico was “up to 6th in the nation” in job growth under Richardson’s governorship. This is highly misleading. The state ranked 17th in June, according to the New Mexico Department of Labor. It has ranked 6th in only three months out of the 41 months since Richardson’s first year in office. The most recent month it ranked 6th was August 2006. 

 

Saying the state ranks “up to” 6th is therefore literally true, since it has ranked that high at least once. But the words “up to” are the sort of qualifiers that voters and consumers need to question. Such qualifiers are called “weasel words,” because they suck the meaning out of a phrase the way weasels supposedly suck the insides out of an egg. It would be equally true to say that under Richardson, the state has ranked “as low as 23rd,” which it did for one month, February 2005, according to the New Mexico Department of Labor.

We also find it misleading for Richardson’s Web site to proclaim that “we have made New Mexico 6th in job growth.” The fact is, according to BLS figures, the state already ranked 6th before Richardson took office. It ranked 2nd, 3rd or 4th for most of his first months in office. But a year after he was sworn in, it had dropped to 12th – and slipped to 16th the following month.

To be accurate, Richardson should say that “we briefly regained 6th place” under his leadership. And he could truly say, “We’re going to hit 80,000 additional jobs any month now.” We have little doubt that the 80,000 figure will be right, eventually. But then, you could say the same thing about a stopped clock.

– by Brooks Jackson

Sources

“Kudlow & Company.” “Governor Bill Richardson of New Mexico discusses immigration reform.” CNBC News Transcripts. 14 Dec. 2006New Mexico Department of Labor, “Total Nonfarm Employment Growth Rankings, New Mexico and United States,” New Mexico Labor Market Report, issues of January 2003 through July 2006 inclusive; 7.

U.S. Department of Labor, Bureau of Labor Statistics, Employment, Hours, and Earnings from the Current Employment Statistics survey (State & Metro Area), figures for New Mexico and various states downloaded from BLS website Aug. 16 – 22.

U.S. Department of Labor, Bureau of Labor Statistics, Local Area Unemployment Statistics, New Mexico unemployment rate downloaded 22 Aug 2007

U.S. Department of Labor, Bureau of Labor Statistics. Employment From the BLS Household and Payroll Surveys: A Summary of Recent Trends. 5 May 2006.

Bill Richardson for President. TV Ad: “Candidates.”