[Congressional Record (Bound Edition), Volume 152 (2006), Part 2]
[House]
[Pages 1879-1880]
[From the U.S. Government Publishing Office, www.gpo.gov]




                A MODERN ECONOMY NEEDS MODERN STATISTICS

  The SPEAKER pro tempore (Mr. Westmoreland). Under a previous order of 
the House, the gentleman from California (Mr. Dreier) is recognized for 
5 minutes.
  Mr. DREIER. Mr. Speaker, today's job seekers have a vast 
technological arsenal at their disposal. They can search online for job 
openings. They can e-mail their contact of networks for leads. They can 
fax their resumes and conduct job interviews via video conferencing. 
And if they get enough of the rat race, they can start their own 
business. That is what goes on today, becoming their own boss.
  This dynamic, technologically advanced picture of the American 
workforce is fundamentally different from that that existed in the late 
1930s and 1940s. At that time, most workers typically had lifelong 
employment in long-established companies. And heavy industrial 
manufacturers were among the most common employers.
  In six and a half decades, Americans have experienced a sea change in 
how we look for work, where we work, and how often we find new work. We 
have progressed into a wired, upwardly mobile, flexible workforce. 
Small business, self-employment, and independent contracting have 
become the hallmarks of our entrepreneurial innovation-driven economy.
  With such a drastic transformation, you would expect the way we 
measure employment would have evolved too. Yet our most frequently 
cited survey of job creation remains mired in a Depression-era mindset 
and research method. The Bureau of Labor Statistics' payroll survey 
tracks payroll employment by surveying established businesses. This 
results in monthly job creation numbers. The household survey, on the 
other hand, tracks employment by household and produces the 
unemployment rate from that.
  While the household survey tracks all types of employment, from 
someone who holds a lifelong job at a big business to someone who just 
became their own boss, the public and private sectors have historically 
relied on the payroll survey to gauge national job growth. When we look 
back to the pre-World War II economy, favoring the payroll survey makes 
sense.
  Today, however, Mr. Speaker, the employment landscape is entirely 
different. Just look at the area I represent in Southern California, 
with its biotechnology facilities, independent IT contractors and 
small, specialized consulting firms. Yesterday's start-up is today's 
big business, and today's brainstorm is tomorrow's start-up. It is not 
surprising then that the payroll and household numbers portray quite 
different results.
  The disparity between the job survey became particularly apparent 
throughout the early stages of the post-recession recovery that we 
enjoyed in 2002 and 2003. While the payroll survey lagged for months, 
the household survey demonstrated a strong and growing workforce, where 
self-employment accounted for one-third of all the new job creation 
that we saw.
  Following the end of the recession in November of 2001, job creation 
in the household survey rebounded by the following May. Although there 
were some ups and downs in the ensuing months, the household job 
numbers never again dipped below the November 2001 level. By November 
of 2003, more than 2.2 million net new jobs had been created, and the 
pre-recession job numbers had been surpassed.
  By contrast, the payroll survey did not demonstrate net job growth 
until August of 2003 and did not return to the November 2001 level 
until April of 2004, nearly 2 years after the household survey had 
caught up. And the payroll survey's pre-recession job numbers were not 
surpassed until February of 2005, a year ago. This prolonged lag in the 
payroll survey's job creation numbers led to claims, and you will 
recall this, of the ``jobless recovery.''
  Mr. Speaker, while every other major indicator of economic strength 
surged forward, from the gross domestic product numbers to 
productivity, the payroll survey persisted as an anomaly of negative 
news.
  Only the household survey was able to accurately portray the strength 
of our workforce because of its ability to track the nontraditional 
employment that the payroll survey misses. In an already-dynamic 
economy, the increased churn created by economic expansion only 
highlighted the growing inadequacies of a Depression-era payroll 
survey. Using the 20th century methods to take a snapshot of the 21st 
century employment picture simply did not work.
  To launch an overhaul of our job surveys, I introduced H. Res. 14, 
which called on the Bureau of Labor Statistics to review and modernize 
the way we collect our jobs data. BLS conducted a report that analyzed 
the two surveys and evaluated options for change. While the report 
stopped far short of proposing a complete reform of the surveys, it did 
acknowledge that a growing discrepancy exists between the two numbers 
and determined that further analysis is necessary.

[[Page 1880]]

  Mr. Speaker, I am pleased that BLS has taken this very important 
first step. But it is only a first step. We must continue to push for 
reform so that our job surveys effectively track job creation. After 
all, policymakers rely on accurate economic data to draft effective 
legislation, and businesses need the right numbers to plan for their 
future. In an economy where the only constant is change, unreliable 
numbers will result in off-target legislation and poor business 
decisions.
  A modern economy needs modern statistics, and we must make sure that 
we give it that.

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