Economist: 100,000 Net Job Loss Since September

Economist: 100,000 Net Job Loss Since September

According to Stanford University’s Graduate School of Business professor Edward Lazear, America has lost a net 100,000 jobs since September 2013.

The Hoover Institute fellow asserts in his March 16 Wall Street Journal editorial that job employment numbers are more accurately measured by the number of total hours worked than by the number of people employed. The job gains often touted by the government don’t always tell the true story about U.S. employment. Lazear explains that an employer who replaces 100 40-hour-per-week workers with 120 20-hour-per-week workers is contracting, not expanding, operations. The professor says that this is true at the national level as well.

Using the Bureau of Labor Statistics, Lazear observed that the average U.S. work week has fallen from 34.5 hours in September 2013 to 34.2 hours in February 2014. The award-winning economist concludes that the drop in hours worked coupled with modest job growth equates to a decline in employment over the period. Calculating real labor usage and the amount of hours worked, Lazear claims employment fell the equivalent of 100,000 jobs since September.

Lazear rejects the notion that a harsh winter could be affecting the declining work hour quotients, explaining that the numbers are already seasonally adjusted. Moreover, he points out that the work week got shorter even before winter arrived, as work hours declined from September to October.  

One possibility could be declining work hours precipitated by the Affordable Care Act. Companies have cut the hours of employees in order to avoid an increase in employee healthcare costs. Lazear thinks that the “jury is still out on this explanation.” However, research by the National Bureau of Economic Research in February 2013 has demonstrated that regulatory laws can be evaded by keeping employee work hours low and can have significant effects on employment.


Please let us know if you're having issues with commenting.