We don’t need economists to explain the economy

There’s an old joke about economists: A mathematician, a statistician and an economist apply for a job. The interviewer asks, “What’s two plus two?” The mathematician says, “Four.” The statistician thinks for a second and says, “On average, four.” And the economist gets up, closes the door, turns to the interviewer and says, “What do you want it to be?”

As it happens, this joke is particularly apt when it comes to analyzing employment numbers, and when it comes to analyzing employment numbers, economists always get the job.

Every month the Bureau of Labor Statistics issues what it calls the Current Population Survey and what everyone else calls the jobs report. On the first Friday of every month, economists wake up early, check the data and tell us all exactly what the numbers don’t mean. The CPS results are so notoriously convoluted, a mini industry has sprung up to explain the exact ways in which they’re mystified this time around. The New York Times’ new explanatory journalism venture the Upshot published three analyses of the latest jobs report — “The jobs report isn’t as good as it looks,” “It’s a mistake to pretend this jobs report tells a consistent story” and “How not to be misled by the jobs report” — all within 24 hours. The first step to not being misled? “We obsess far too much on the Labor Department’s monthly jobs report.”

While the industry does its best to walk the presumably confused public through the latest numbers, the public’s perception of economic news has remained more or less static since the 2008 financial crisis: Pew Trends has a near steady 60-33-6 split among mixed, mostly bad and mostly good. And yet every month economists delve into the jobs data as if they’re providing a public service instead of an unwelcome ritual that distracts from the more important long-term trends.

The monthly report contains not just data on employment — though that’s the industry’s bread and butter; it also provides numbers on wages. April’s report shows wages virtually unchanged, continuing a decades-long trend of stagnant earnings. While the average wage for nonsupervisory workers hasn’t budged much in 50 years, their productivity is up markedly. That means that labor’s share of the national product is down, a situation the Bolsheviks at the Cleveland Federal Reserve described this way: “The compensation that workers receive in return for their labor grows at a lower rate than the output that they contributed to producing.” Or, as Blink-182 once put it, “Work sucks./ I know.”

And people do know. Gallup’s 2013 State of the Workplace survey found only 30 percent of workers engaged in their jobs, leaving 70 percent “disengaged” or “actively disengaged.” It’s no wonder then that at the height of Occupy Wall Street, a December 2011 Quinnipiac Poll found that 68 percent of New York City voters supported the protest movement’s nebulous views — best summed up by the cardboard sign “S--- is fucked up and bull----.”

There are any number of metrics we could use to track the welfare of U.S. workers, and economists are among the first to admit that the unemployment rate, despite its media cycle dominance, isn’t a great one. You could look at the distribution of U.S. wealth and capital income, as Emmanuel Saez and Gabriel Zucman have, you could look at the simple relation between employment and population over time, or you could dig through the numbers and concoct something different, such as the percentage of unemployed by duration of unemployment. We’ve generated a lot of credible and semi-credible data about the behavior of various market actors, but they don’t seem to have done most Americans a lot of good. I’m not sure exactly who benefits when the Times publishes three articles about a dubious government press release being dubious, but I don’t think it’s the readers. Americans aren’t inclined to take their government’s word at face value in the first place: Gallup puts public trust in Washington at historic lows of below 20 percent.

The BLS monthly report doesn’t say which jobs come with dignity and fair pay and which are degrading, but no matter how you measure it, a wedge has been growing for decades between worker output and compensation. A 2012 report from the Economic Policy Institute describes the situation in clear terms: “This divergence of pay and productivity has meant that many workers are not benefiting from productivity growth — the economy can afford higher pay but is not providing it.” Increases in employment and productivity — America’s two dearest metrics — provide only the possibility of shared higher living standards; they do not and have not guaranteed them. Economists keep muddling through their data tea leaves, but who needs them when the writing is on the wall?

One other jobs report, however, does lend a little insight. Every year since 1988, CareerCast ranks hundreds of careers on the basis of work environment, stress, pay and hiring outlook. In the 2014 edition, mathematician, statistician and economist as well as tenured professor were in the top 20, and economist had the best hiring outlook of the four. As if to drive the point home, the day after the CareerCast announcement in Forbes, a Freedom of Information Act request revealed that economist and tenured professor Paul Krugman will receive a salary of $225,000 to study income inequality at the CUNY Graduate Center — no teaching required. The jokes almost write themselves, but if we let these professionals monopolize the debate around labor and pay, the joke is on us.