Republicans Are Not Being Truthful When They Blame "Uncertainty" for Lack of Hiring

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Monday, 19 September 2011 03:11

The Washington Post has a front page article outlining President Obama's plans for deficit reduction. It then quotes Representative Paul Ryan blaming "uncertainty" for slow growth and high unemployment.

If it were the case that firms would actually be hiring except for uncertainty then we would expect to see firms increasing the average number of hours worked per workers and also turning to temporary workers. The argument here is that firms are seeing demand for labor, but they are scared to take on the commitment of hiring another worker because they think that President Obama would regulate them to death. This means that they would seek to fill this demand through alternative routes.

The data contradict the uncertainty story. Average weekly hours worked is still about 1 percent below its pre-recession level when firms presumably did not suffer from uncertainty.

avg.hours

Source: Bureau of Labor Statistics.

The data on temp employment is even less friendly to the uncertainty story. Temp employment is still down more than 15 percent from its pre-recession level.

temp_emp

Source: Bureau of Labor Statistics.

In short, the evidence does not support Representative Ryan's assertion that uncertainty is a major obstacle to hiring and recovery. It would have been appropriate to call readers attention to the fact that the data contradicts Ryan's assertions. Post reporters have the time to evaluate the evidence, the vast majority of its readers do not.

Serious news stories, unlike this one, do not include in their first sentence a reference to "the nation’s rocketing federal debt." Such phrases are best left for the opinion pages.