Job Numbers, Spending Cuts, and Reality

by francine Hardaway on March 4, 2011

Unemployment this morning has come in at 8.9%, the best number we’ve seen in years. Unfortunately, this number — like almost every other number — has no bearing on reality. It’s a completely irrelevant number to everyone but, perhaps, political candidates and the Federal Reserve.

Pundits and economists alike are surprised at the number. But they’re surprised for all the wrong reasons. The economists thought that as the economy picked up, more people who had given up looking for jobs would come back into the labor force and be counted among the unemployed, causing the unemployment number to go up. This, apparently, didn’t happen.

Of course it didn’t, you fools. You are counting all the wrong things.  You are counting an economy that no longer exists, an economy consisting of manufacturing and construction workers, laboring in large companies or on huge projects, of fast food workers being hired by MacDonald’s or retail workers hired by WalMart. This economy has gradually vanished, having had the s**t kicked out of it for three decades by outsourcing, offshoring, the internet, and the transformation of America into a service economy. Most of it gasped its final breaths with the massive layoffs of 2008 when Wall Street fraudsters brought the banking system to a crashing halt while they figure out how to save themselves (and themselves alone).

But you are not counting the innovation that has taken place over the past few years: the growth of online startups and application developers, the proliferation of single-person businesses offering massage therapy, life coaching, credit counseling, and organic cookies. That’s where the unemployed have gone.

Even the Kauffman Foundation doesn’t count those. They are bootstrapped, because they’re not creditworthy. They are funded by parents and friends, by Kickstarter and AngelList, by Visa and Mastercard. Most of the founders are not memorable, do not reach the level of publicity. They are young men like Max Yuan, who never did look for a job. Instead, he built SECiPad, a data application for people who want to trade stocks on real time information, and began selling it in the Apple App store. Or Chad Chatterton, who turned his real estate company into a property management and maintenance business, or Moises Perez, who came out of prison and founded ClearVue Auto Glass.

These companies are in nobody’s numbers. But make no mistake, the owners are NOT unemployed and NOT looking for work. We see about 60 of these businesses a year in our Fasttrac programs, which are funded by Community Development Block Grants in four municipalities surrounding Phoenix. These programs are big job generators, and if they were in Africa, they’re be front page news in America.  But because they are in low or moderate income neighborhoods right under our noses, they are not “counted.” Worse than that, Community Development Block Grant programs themselves are on the chopping block — placed there by the Obama administration, not the “right wing.”

The government has no clue what generates jobs. I has no idea how to generate jobs. But in a moment of serendipity, it started the CDBG program and we found it to coach entrepreneurs. And now they will cut it, without even knowing what it does or how it can help in everyone’s loud proclamations that “priority one is jobs.”

Great! Local communities have been generating jobs, as well as retaining jobs, through CDBG funds. Forward this to your Congressperson. The government is counting the wrong things, emerging with inaccurate numbers, and failing to see what is in front of their faces: jobs are generated at the local level, by individuals.


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