Friday, February 21, 2014

Facts about Guam's latest unemployment report

A recent anonymous commenter on my last blog post, "Running to catch up to low employment numbers" wrote the following:
So you counter hard evidence that the economy is improving with simple pessimistic conjecture? Anyone can be a naysayer, but to be a naysayer in the face of hard evidence of improvement just shows that the you take the contrarianism that Democrats have exhibited with our administration as gospel.
This criticism of my blog post is incorrect because my argument was not about whether the economy was getting better, but about the depressed state in which Guam's economy finds itself.  Obviously this comment is one piece of evidence that there is popular demand for an analysis of Guam's employment situation and whether it is, in fact, getting better.  I would certainly hope so, but let's see where the evidence leads.

Look at a snapshot of the latest unemployment report and the year-on-year changes in different measures.  According to the September 2013 unemployment report:
  • The Civilian Labor Force declined by 1,550, or 2.1%.
  • Employment declined by 1,300, or 2.0%.
  • Full Time Employment declined by 2,260, or 4.2%.
  • Part Time Employment increased by 1,520.
  • Unemployment declined by 810.
Is this hard evidence of improvement? No. Full time employment declined by about 4.2% and employment overall declined by 2.0%.  Unemployment declined but more than all of the decline in employment is accounted for in the drop in labor force participation.  Additionally, the number of people outside of the labor force who did not want a job increased by about 3,380. Is that good news? No. It is a further sign of economic stagnation: that many people have not only stopped looking for jobs, but now are telling themselves they didn't want one, in the first place.

When I approach these numbers, I prefer to actually look at ratios rather than the raw numbers, since the reported numbers are no more than estimates of the current population.  The main ratio I examine is the employment-population ratio, since it gives a good glimpse of how many of Guam's civilian population are employed. What we find is that the employment ratio was 53.7% in September 2012 but only 52.5% in September 2013, a decline of 0.8 percentage points in a year.  A curious fact is that the employment-population ratio has only been at or below 52.5% one time before the current administration, in May 1976. As I pointed out in my previous post, the employment-population ratio has remained below its rate of 54.3% in March 2011 since that point, as far as data is available.  Here is a list of quarters where employment ratio was at or lower than 54.3%:
  • May 1976: 51.2%
  • March 1982: 53.6%
  • March 2011: 54.3%
  • March 2012: 49.9%
  • June 2012: 51.9%
  • September 2012: 53.7%
  • December 2012: 53.4%
  • March 2013: 52.4%
  • June 2013: 53.7%
  • September 2013: 52.5%
Please note that only two are prior to the current administration. Unfortunately, employment remains very low and the apparent direction of change is not unambiguously positive.

Monday, February 17, 2014

Running to catch up to low employment numbers

Since the early days of the Governor Eddie Calvo's administration, Guam's employment has struggled to get back to comparable levels of opportunity experienced in the first months of 2011. Shortly after Governor Calvo took office, the employment-population ratio was 54.2% (March 2011), currently the ratio stands at 52.5% (September 2013), a loss of 1.7% percentage points.  Here are some numbers to put things into perspective:


  • The labor participation rate has declined from 62.6% in March 2011 to 58.9% in September 2013.
  • Full time employment has declined by 2,270 or about 4.2% from March 2011 (54,450) to September 2011 (52,180), while part time employment has increased by 1,570.
  • From the Current Employment Reports, we can find that over the same period, average hourly private sector wages increased by only 3.2%, while the Consumer Price Index increased by 5.2%. That means that an average hour of work for production workers in September buys 1.9% less stuff than in March 2011. If this trend continues, the average private sector hourly wage will buy 5.2% less stuff by March 2019, right after the next elected governor leaves office.

The Governor's office recently issued a press release claiming victory over unemployment, proclaiming, "Unemployment Drops… in Almost Every Category." That's correct, as far as it goes, but it is terribly misleading if you don't take a longer view and look at the measures that really matter to the quality of life of many Guamanians. They also point out that those who are not in the labor force, but want a job is down. That is correct, but it probably has more to do with the length of unemployment and the loss of hope that can come with extended unemployment than a sign that things are getting better. If you look at just about any method of measuring employment without looking at misleading unemployment numbers, it's a dismal picture.

Right now, there is a little blip up in the data that indicates that maybe employment is increasing, but I'm not optimistic that there is a positive trend at this point.

Update: a good friend of mine has pointed out that I should have written 1.7 percentage points instead of 1.7%. Since he's right, I've corrected the figure. The percent change is actually -3.1%.

Wednesday, October 16, 2013

Lieutenant Governor Tenorio comes out against paying tax refunds

Tuesday's Pacific Daily News had a letter from Lieutenant Governor Ray Tenorio where he came out against Governor Eddie Calvo's decision to use the $15 million Section 30 windfall for tax refunds.

However, rather than acknowledge that if the Lieutenant Governor has a bone to pick with anyone, he should turn to his boss, Tenorio emerged with partisan vitriol:
Sen. Aline Yamashita sponsored a bill that would have funded a plan to maintain all public schools and build new ones. The governor felt it was such a critical bill, he called the Legislature into special session to vote on it.
Instead of acting on the important bill, the legislative majority felt session was unnecessary, so they adjourned before even talking about it. That bill would have started the process of funding Sanchez High and all the other school facilities.[1]
In other words, he is accusing the Democrats in the legislature for killing Aline Yamashita's bill. The bill Lieutenant Governor Tenorio is discussing is Bill No. 184-32 (COR), which was introduced by Senator Aline Yamashita, and would have appropriated $3 million to implement Public-Private Partnerships to maintain, operate and repair facilities of the Guam Department of Education.[2]

Lieutenant Governor Tenorio is right that the majority of senators in the Guam Legislature removed the bill from the session agenda, but his implication that the bill was killed by the Democratic majority is dead wrong. At that point, the bill could have received a public hearing and gone through the standard legislative process.

Governor Calvo destroyed any chance that the bill would become law, when he used the funding source identified in the bill to pay tax refunds. It is hard to argue against paying people the tax refunds that are owed to them by the government of Guam, but that is what Lieutenant Governor Tenorio is arguing, implicitly.

Probably most people would agree with Lieutenant Governor Tenorio that our public schools should be well-maintained. On the other hand, tax refunds represent borrowed money that has to be paid back soon. Currently, the government of Guam is required to pay tax refunds within 6 months. The Governor is meeting the minimum requirements of his job, by paying tax refunds within the legally required time-frame.

Perhaps the Lieutenant Governor would rather divert money for tax refunds to operational expenses of the government, but I do not think that is a good idea. If Lieutenant Governor Tenorio has a problem with paying tax refunds instead of using the $3 million for maintaining public schools, he should take it up with his boss.


Friday, October 11, 2013

Surprise! Low employment associated with bad things

I just read an extended 1,000+ word free advertisement rant column by Governor Eddie Calvo published in the Pacific Daily News today. Throughout the column, Governor Calvo talked about everything but the obvious, that most of the problems he cited are primarily caused by low employment.[1]

Wednesday, October 2, 2013

The truth about the government shutdown (as I see it)

Yesterday, the U.S. Federal Government shut down. The Pacific Daily News ran a story online titled, "BREAKING NEWS: Federal government shuts down". Surprisingly, the Pacific Daily News' initial release was relatively accurate in its characterization of the cause of the shutdown:
The federal government shut down for the first time in nearly two decades following more than a week of legislative jockeying by House Republicans to extract concessions from President Obama and Senate Democrats on the Affordable Care Act.[1]

Tuesday, September 10, 2013

John Boehner ignores the elephant in the room

Two days ago, Speaker of the House of Representatives', John Boehner's, editorial was printed in the Pacific Daily News. In it, Mr. Boehner said a few misleading things and left very important things unsaid about the U.S.'s financial conditions and its impact on the U.S. economy.

Thursday, September 5, 2013

Yes, property taxes on Guam are low, but not THAT low

I was firmly confident that I would not write any further posts until next week, then I read the Pacific Daily News (PDN) today. It turns out, they have whopping errors on three or four different facts in the editorial.  The PDN editorial reports that:

Guam's property tax rate is the lowest in the country -- it's just 0.005 percent of the value for land, and 0.01 percent of the value for buildings. In comparison, the lowest state property tax is Hawaii's, which is 0.40 percent.[1]