Today, a crowd of roughly 400, mostly labor members, protested outside of Governor Kasich’s office building with one simple message:

I love Wheel of Fortune’s new “protest” edition.

Here’s NPR’s Bill Cohen’s coverage of it, in which Kasich spokesman Rob Nichols defends Kasich on the economy: WKSU- 9-9-11- “Where are the jobs?” Protest

Governor Kasich’s press secretary defended his boss. Rob Nichols noted eight straight months of net job growth in Ohio, with a total of 45,000 new jobs. One reason, he said, the official jobless rate has gone up recently is that jobless Ohioans are more confident about the economy, so their resuming looking for work. And that can push up the unemployment rate.

The problem for Nichols’ theory for why Ohio’s unemployment rate is going up is a mountain of economic data that refutes it. But before I get to that, I need to explain that there are two main ways the U.S. Department of Labor gets its employment data, and how they use two totally different methodologies.

The first is called the Current Employment Statistics (CES), a survey of 400,000 established businesses that tracks payroll numbers, hours, wages, etc. So each survey is a “poll” of a given workplace. From that data, the U.S. Department of Labor models projections of the larger economy. As such, it has been generally accepted as the basis of counting jobs in an economy with increases called “job growth.” It was the U.S. Department of Labor’s Bureau of Labor Statistics’ CES figures that the Kasich campaign and the RGA relied upon in all their attacks about Strickland losing jobs during the economic meltdown that started when the company Kasich worked imploded causing the global economic domino effect we enjoy even still today.

The other method, and the one I have consistently used, is the Bureau’s Local Area Unemployment Statistics (LAUS). That’s a survey of households which asks whether individuals are in the labor market, and if so are they looking for work (unemployed) or working (employed). It’s the LAUS that determines our unemployment rate. One of the big differences is that LAUS is based on individual data as opposed to workplace data. Under the CES, if a person works for two employers, it’s counted as two jobs. LAUS counts them as one employed person. CES also doesn’t include people who live in the State but work out of state or the self-employed.

There are serious debates about whether the LAUS should be the preferred method of measuring jobs in an economy, including by the Heritage Foundation, because it provides a consistency in the use of other figures when discussing unemployment that using the CES does not.  I tend to stick to the LAUS, but I concede the CES is still considered the benchmark by most, including the Congressional Budget Office.  (Since the LAUS is the only measure of the labor force and unemployment rate, everyone relies on LAUS for some data.  The debate is whether the employment figure provided by the CES is a more accurate reflection of job creation that changes in LAUS for the number of employed individuals… Got that? Good, let’s move on, then.)

Using the two different surveys create a completely different picture of the economy in Ohio and demonstrates exactly why there’s an academic debate over the CES vs. LAUS.  For purposes of evaluating the merits of Nichols’ claim that Ohio has grown 45,000 jobs so far this year since Kasich took office (and what that means in context), let’s see how the first seven months of 2011 (under Kasich) compared to the first seven months of 2010 (under Strickland) to evaluate Nichols’ claim that the unemployment rate is going up despite the “creation” of 45,000 jobs because more previously unemployed Ohioans are re-entering into the labor market.  That would seem to be the fairest way to examine Nichols’ clam and put it in context.

Here’s what the same seven-month period (January through July) in 2010 and 2011 say about job growth using the U.S. Department of Labor’s CES data.  All data is based on the seasonally adjusted figures by the Bureau of Labor Statistics (BLS). 

(NOTE: These charts should not be viewed as arguing that there is correlation between the economic data observed and who happened to be governor at the time.  The reality is that a Governor can have very little effect on the economy, especially in the face of national and global economic trends.  It is especially true for Kasich because Kasich simply couldn’t have done anything to have an arguable impact on Ohio’s economy in any appreciable manner during this time period.  Kasich’s budget, which would have the greatest impact on the economy, was only law in the final month of the period we have data, for example.  The point is to take Nichols’ argument, though, at face value and measure it in context with available economic data to evaluate the validity of his claims.)

January- July

Net change in jobs (CES)

Net Change in Unemployment Rate

Strickland in 2010



Kasich in 2011



So using the CES method, we get the 45,000 “jobs created” that Nichols is talking about.  But that’s only 50% better Ohio did during the Strickland period when Kasich was slamming Strickland for not creating jobs, and during the “Strickland” time period the unemployment rate dropped twice as far as the “Kasich” period.   Furthermore, the unemployment rate went down all but one of the months under Strickland.   During the Kasich period, the unemployment rate went stagnant in May and then started going back up in the final two months.

The CES data indicates Ohio has seen seven straight months of growing job numbers, but not the eight claimed by Nichols (but that’s a minor error, especially compared to what we’re about to cover.)  Nichols suggests Ohio’s unemployment rate is going up because folks are re-entering the labor faster than jobs are being created.  But what do those same periods say when you look at LAUS data ?

  Employed Unemployed

Labor Market

Unemployment Rate











According to the LAUS data, during this period in 2010, Ohio’s unemployment rate went down because 62% of the people coming off unemployment was finding work.  That’s not what’s occurred this year so far.  In the past seven months in Ohio this year, Ohio’s unemployment rate dropped simply because twice as many unemployed people are dropping out of the labor market altogether than the employed people who became unemployed.  If Ohio’s gained 45,000 jobs, it’s done so while the number of employed Ohioans has shrunk by over 10,000 at the same time.  That suggests the “new jobs” either may not actually exist, or are the kind held by people who work multiple jobs to make ends meet.

Ohio’s labor data has been off the charts since May… and not in a good way.

If the people were re-entering the labor market like Nichols suggested, Ohio’s unemployment rate actually would be skyrocketing worse than it has.  In fact, that’s what’s prevented the June and July jobs report from looking even worse than it did.  Want to see how unenthused the labor market is about the economy on Ohio has been lately?  Here’s the chart the Kasich Administration doesn’t want anyone to see:


Like a cliff, people have been fleeing Ohio’s labor market since May.  We’ve seen the number of employed in Ohio drop by over 50k in that time, but the number of unemployed Ohioans has only grown by 20k.  That’s because during that time 30,000 Ohioans who were unemployed in May has since dropped out of the labor market.  That’s right, almost all of the drop in the labor market this year occurred in June and July.

Nichols has it completely backwards.  Ohio’s unemployment rate didn’t go up since May because more people have been rejoining the labor market faster than jobs are being created.  Instead, the only thing that’s kept Ohio’s unemployment rate from growing even faster is because for every two employed Ohioans who has become unemployed in the past two months there was three already unemployed Ohioans dropping out of the labor force entirely.  This three-month drop in the labor force is barely beaten out by the July-September period during the height of the 2009 recession, and Ohio’s labor force hasn’t been this small since October 2004 under Governor Bob Taft.

If Ohio has truly grown 45,000 jobs this year, where are they?  Because Ohio’s families are saying they can’t find them, and they are giving up looking for them in droves.

John Kasich isn’t getting the jobs done.

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