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Companies Use Fuzzy Math in Job Claims; Candidates Still Buy In
In an ad that has blanketed radio airwaves in the Washington region, a woman’s voice gently intones, “Imagine . . . one million new jobs.”
“One million new American jobs,” echoes a man. “One million new opportunities to build a career,” says the woman.
“Support a family.”
“Follow your dreams.”
And where will these “one million new jobs” come from? By expanding oil and gas drilling and building new pipelines, says the American Petroleum Institute, an industry lobbying group that paid for the ad campaign, which also has featured in newspapers, on television and on Metro platforms:
Oil companies aren’t the only ones promising jobs if Washington gives them their way. A wide array of businesses are saying they can help solve the country’s unemployment crisis if only the government would roll back some regulations, approve their big mergers or lower their taxes.
Yet the industry often touts debatable jobs numbers. Mergers between big companies, for instance, tend to result in layoffs rather than new positions overall. And a closer look shows that API’s ads exaggerate the effect that looser drilling policies would have on employment; more than half of its projected job growth would come between 2015 and 2030.
Nonetheless, some policymakers and presidential candidates have cited these statistics as they echo companies’ claims about creating jobs.
“We just learned today that if the federal government would pull back on all of the regulatory restrictions on American energy production, we could see 1.2 million jobs created in the United States,” Rep. Michele Bachmann (Minn.) said at a Sep. 7 Republican presidential debate.
In a letter last month to the Justice Department, 100 lawmakers defended the merger between AT&T and T-Mobile, repeating the companies’ argument that the government’s lawsuit to stop the deal on antitrust grounds would “thwart job creation and economic growth.”
And a central element in the economic plans of other Republican presidential candidates, such as Mitt Romney and Rick Perry, is to roll back “job-killing” regulations to spur hiring.
“It’s really hard if you’re against regulation to let a good crisis go to waste, and right now we have high unemployment,” said Roger Noll, an economics professor at Stanford University and co-director of the school’s program on regulatory policy. “You can use the current economic condition as a Trojan horse.”
The horses come in different shapes. The coal industry is running ads that show working people weighed down by regulation-filled briefcases being violently thrown from broncos in a rodeo. A new study commissioned by environmental groups, however, says that regulation of coal ash disposal would actually create jobs.
Other company numbers also become fuzzy upon examination.
Big company mergers are widely known to lead to job losses in the short term as firms seek savings, or “synergies” in merger jargon. But that has not stopped AT&T and Capital One, whose proposed mergers have raised antitrust scrutiny, from saying that their acquisitions will result in more jobs.
AT&T has been running a television ad showing its employees hard at work and consumers enjoying their wireless phones and tablets. The ad says that if the merger with T-Mobile is approved, AT&T will bring back 5,000 jobs that were outsourced overseas. It also says the merger will create investment in broadband that would create “as many as 96,000 jobs.”
The latter number comes from a study by the Economic Policy Institute looking at the employment benefits of the $8 billion AT&T has promised to plow into broadband investment should the deal be approved in court. EPI concluded that such an investment would yield 55,000 to 96,000 new jobs over seven years.
But the EPI study does not address whether the merger would ultimately result in more jobs — after factoring in potential layoffs.
AT&T has said it expects to save $3 billion annually from the deal but has not explained whether that would include job cuts. An AT&T spokesperson said that the company expects to keep all of its call-center jobs and that most of the reduction in the company’s workforce would come from attrition rather than layoffs.
In another big corporate merger the government is looking at, Capital One has proposed acquiring ING Group’s online banking unit for $9 billion. The company says the deal would create 500 new jobs in Delaware. It has also said, though, that it expects $90 million in cost savings from the merger. Capital One declined to say whether positions would be cut.
For more than a year, the API has been highlighting the number of jobs it says are linked to the oil and gas industry.
“Sure, you know oil and natural gas fuel transportation and comfort,” a blond-haired woman in a black pantsuit says in one API television ad. Behind her, silver trucks and cars glide by, an African American family shares a meal, people pour out of a rush-hour train. Then a crowd appears before giant letters that read: “9.2 million JOBS.”
But many economists say that the API has exaggerated the number of jobs linked to the oil and gas industry by including direct and indirect jobs (such as steel suppliers), and a seldom-used category known as “induced” jobs that API says covers everything from valets to day-care providers, from librarians to rocket scientists.
Moreover, the single biggest category of people working directly for the petroleum industry is cashiers at gasoline stations and stations with convenience stores — 533,830 of them, according to the Labor Department’s Bureau of Labor Statistics. Yet hardly any of those cashiers pump gas, check engines or inflate tires; mostly they ring up sales of snacks, not gasoline. According to the Labor Department, their median hourly wage is a meager $8.68.
“As the old saying goes, statistics do not lie but statisticians do,” said Philip K. Verleger, an economist, consultant and retired professor of management at the University of Calgary’s business school. “The API is the best there is at lying with statistics.”
“Anybody dismissing any kind of a job is silly,” responded John Felmy, chief economist of the API, adding that including cashiers as industry workers is “a matter of BLS accounting.”
He added that counting induced jobs was “completely appropriate methodology.”
The API has made new claims in its recent ads, asserting that a different energy policy — including a new pipeline to Canada’s oil sands, drilling on now-protected federal lands and waters, and unimpeded shale drilling — would add 1.4 million jobs. “Are you one in a million?” its latest ad reads, showing a man in a hard hat. (The ad, which credits API in small type, says it is the product of a more populist-sounding “The People of America’s Oil and Natural Gas Industry.”)
“It’s a triple win,” API president Jack Gerard said. He said that the industry could create jobs, generate hundreds of billions in tax revenue and double North American oil production — although the main production increase would occur in Canada.
The ad cites a study by Wood Mackenzie, a consulting firm hired by API. Scott Mitchell, who oversaw the study as head of North America upstream research at Wood Mackenzie, said that only a third of the 1.4 million positions created would go to people working directly for the petroleum industry and that the rest would be indirect and induced jobs.
“To be confident about the induced job effects of additional spending is incredibly complex,” said Mark Fulton, head of research at Deutsche Bank’s team of climate change advisers. Citing such figures involves “going another step toward lack of accuracy,” he said.
The Wood Mackenzie study also makes assumptions about current policy. For example, it assumes that current regulations limit the number of Gulf of Mexico exploratory wells to 20 a year. But the number of exploration wells being drilled now is already well above that. As a result, gulf exploration would have little effect on job creation.
Josh Bivens, an economist at EPI, said the amount of job creation from industry spending depends on economic conditions. “In today’s economy, if an oil company decided to do something new, that would create jobs,” he said. “If unemployment were 4 percent, it would suck people away from other employment and there would be no net increase in jobs.”
Felmy, the API economist, retorted: “You may be moving jobs around,” but wages would rise because companies would be bidding for skilled workers.
Drilling further into the API numbers of existing petroleum industry jobs shows just how murky these numbers and definitions can be.
According to the BLS, the number of people in the United States drilling wells, extracting oil and gas, refining petroleum and manning gasoline stations is about 1.1 million. If sole proprietors and business partners are included, the number rises to about 2 million, according to the Commerce Department’s Bureau of Economic Analysis.
Kurt Kunze, an official at the BEA, said, “The big discrepancy in oil and gas extraction is that there are some big master limited partnerships with lots of partners. There is no way to separate out the people digging holes in the ground from someone who is just a financial partner.” He said given the number of partnerships, he would tend to use the lower BLS figure.
API used the higher figure. If half a million people were taken out of its baseline projection, the final total would have been reduced by 1.8 million.
Most of the jobs provided by big oil companies are overseas. At Royal Dutch Shell, for example, 21 percent of its 97,000 employees worked in the United States; the rest work in 89 other countries. Exxon Mobil has 4,970 people working in its Canadian Imperial Oil subsidiary, 885 in Norway and about 2,000 in Malaysia.
A study by Democrats on the House Natural Resources Committee last month found that the four biggest oil companies combined — Exxon Mobil, Chevron, Shell and BP — reduced their U.S. workforce by 11,200 employees between 2005 and 2010. BLS statistics show that although the number of oil and gas extraction positions has risen, the number of gasoline station jobs has dropped. The Democratic lawmakers noted that the four companies earned $546 billion in profits during that period.

22 Comments so far
Show AllDo these jobs come with flaming communal water supplies? We need flaming water all over the US so the govt can fund their next tax break to the rich by taxing our water as fuel.
Wow; an instance of actual, useful, journalism in the Washington Post. Havent seen anything like this in a while...
Big business has gotten what it has wanted for the last 3 DECADES. As a result, jobs are nonexistant, wages are lower than ever, wealth is weighted so heavily towards the top that the top .1% owns as much as the bottom 150 MILLION of us, we have lost 47,000 FACTORIES over W's 8 years ALONE, our children have next to NO hope of a decent future, and we have more people losing their homes and jobs than at any time since the great depression. And they want MORE?
Fuck them. NATIONALIZE. The banks want to bitch about not being profitable after we bailed their sorry asses out? They want another $3.6 BILLION a year, JUST at BOA? And just what, pray tell, will they do with that money? Give it to the CEO and the board? They sure as hell won't be hiring anyone with it.
If the oil companies want to bitch about their HORRIBLE regulations, then just NATIONALIZE them. Make it ILLEGAL to bet on oil futures if you aren't in a business that NEEDS the oil. Energy is a matter of national security, it SHOULD be nationalized. A full quarter of the cost of gas comes from this speculation, NOT on actual supply and demand. If they don't LIKE being the single most profitable industry in the world, NOT paying the US Citizen what it owes them and screwing us for every penny possible, then I say screw them back. Take away their ENTIRE industry.
The rich already have more than they will EVER need, it's time for them to give some of their ill gotten gains BACK. Business has been screwing us for at least 3 decades, it's time for them to pay up.
If we nationalized them we'd have to invade ourselves to install a puppet government to reverse the action. Fortunately, this is unnecessary as the puppet government is already in place.
I have to say for all to hear...these penises, including dumb bitches like Bachmone and Hillbait, are thinking with one organ and it ain't the brain. I realized in the early morning hours, that masculine thinking is one sided, one score driven. Feminine thinking is multi level thinking, what will happen next? Masculine thinking is about getting one thing done, screw the consequences -no pun there. So they get someone pregnant with all the responsibility and the feminine has to do ALLTHE rest. I know there has been some serious science about the warrior gene,but someone needs to address the dumb ass gene. All those people in the 1%, and yes, there are a few women who I bet never cleaned a toilet in their life, have the dumb ass gene. They can't see beyond instant gratification, don't comprehend consequences, and don't give a rat's ass about the world's children and their heritage.
They are selectively destroying our country and our planet one stupid score at a time. It's all about who makes money and who will win an election. These are some of history's most criminal people ever. Can't someone file a giant lawsuit, class action , against the whole stinking lot of putrid squallor?
More oil, more wars, more oil...the pathological cycle continues till the oil is gone. Should have seen the PB sponsored ad for "Gulf Tourism" on mainstream tv while stopping to check on neighbor. Seriously? Ccome on down, get contaminated !*?
The 1% see EVERY tragedy, especially the ones they have created, as opportunities to market that tragedy in order to have sex with even more money.
Their view, in this instance, as they clink their martini's at a lunch soon to be filed away as a deduction, is…"you know, my fellow greedy business partner, with so many people so desperate for jobs, this is the BEST time we've ever had to push forth our deregulation package, and get this God damn country under the drill again. We need to contact that PR firm, and get something that will persuade those unemployed suckers, that it is deregulation that is the problem, and at the same time, give them that happy glowing feeling of more jobs on the horizon. Not THAT Horizon of course.......HAHAHAHAHAHAHAHAHAH!!!!!!!!!"
'That' PR firm being none other than Burson Marsteller.
What a slick sell. Its still drill baby drill. No mention of greenhouse gas emissions. No mention that scarse hydrocarbon fuels are sold the highest bidder, which will be more often overseas. The income gets to stay overseas.
There is some economic multiplier effect. Workers in extraction, pipelining, transport, refining, will tend to buy local. But so many "new" jobs? The oil industry will still be in production decline, and still killing the future. Total energy return on energy invested is getting lower for alternative oil production and longer delivery chains. Real energy gain is falling and greenhouse gas emissions per unit of production are rising. Climate change disasters will continue to cost more, eventually destroying more investment and embodied energy in a short time, than is extracted over decades.
There is more need for new jobs from a sustainable energy revolution, a zero carbon revolution, for a sustainable civilisation. Investing heavily in the harder to get old fuels steals from developing the new. Eventually the point of total negative returns must be reached, and has been reached, after all environmental effects are considered. The old civilisation is dying from its own energy supply, from dependency and supply decline, and from irreversible environmental damage. New jobs in the last of the old fuels are short term and localised.
You want to see the economy boom? End ALL Federal Regulations for 10 years, state and local laws still apply ( http://jerrypournelle.com/chaosmanor/?p=1297 ):
“We know the keys to economic growth: cheap energy and a free economy. Actually that boils down to one key, since a free economy would result in a rapid fall in energy costs. Imagine, for a moment, that the government announced the end of all Federal regulations for ten years. State laws still apply. The laws against fraud still apply. But all other regulations – Americans with Disability Act, OSHA, EPA, all of them – simply do not apply for a decade. The result would be an economic explosion that would outshine the German Economic Miracle, das Wirtschaftswunder, that followed the elimination of economic regulations and controls in occupied West Germany after World War II. (Note that East Germany remained under Soviet occupation and followed the Socialist path; the Germanies were united after 1989, and East Germany is only now recovering from its years of socialism).
A ten year moratorium on all Federal economic and environmental regulations – leaving all that to the states – would bring about an American economic miracle. ”
The above is not speculation, we can see it actually happening:
http://online.wsj.com/article/SB10001424052970204226204576602524023932438.html?KEYWORDS=continental+resources
"Mr. Hamm believes that if Mr. Obama truly wants more job creation, he should study North Dakota, the state with the lowest unemployment rate in the nation at 3.5%. He swears that number is overstated: "We can't find any unemployed people up there. The state has 18,000 unfilled jobs," Mr. Hamm insists. "And these are jobs that pay $60,000 to $80,000 a year." The economy is expanding so fast that North Dakota has a housing shortage. Thanks to the oil boom—Continental pays more than $50 million in state taxes a year—the state has a budget surplus and is considering ending income and property taxes."
This is so obvious, so simple, that only the willfully ignorant could possibly argue with it. Unfortunately, the modern day collectivists are incapable of understanding something this simple, which is one reason for my sig:
Atlas Shrugged was supposed to be a warning, NOT a newspaper!
mcsandberg1 sez: "You want to see the economy boom? End ALL Federal Regulations for 10 years, state and local laws still apply.."
Right. Let them mine every mountaintop and drill every well. Let them rape the countryside, pollute the air and kill workers previously offered some protection by health and safety regulations. Let them break every union and collective bargaining agreement. Let them wipe out every endangered species and countless others. Then, after ten years, try to impose order on the hellish chaos created by those who worship wealth.
"Atlas Shrugged" isn't a warning, it's the comic they give to the kids who don't play well with others. The rest of us want to live in a civil society where the law of the jungle isn't the law of the land.
The actual numbers show that the rate of growth is inversely related to the number of regulations. The final paragraph from ( http://www.hoover.org/publications/hoover-digest/article/7822 ):
" Yet it is hard to avoid the conclusion that dismantling the regulatory state would foster a return to the long-run capacity of the United States to grow at roughly 4 percent a year; and the twin revolutions (technological and political) should enable us to achieve an even higher rate of growth. We have been setting our sights far too low."
I'd say that Atlas Shrugged is definitely a warning. Ayn Rand escaped collectivism, was horrified to see it starting here and described what would happen as we traveled down the road to disaster. The Tea Party took the warning seriously enough to begin to reverse course on 11/2/2010.
"The actual numbers show that the rate of growth is inversely related to the number of regulations."
Quoting biased articles isn't proof and professing the ethos of a cancer cell isn't a claim to morality. Do you really want to live in the world you envision?. Do you want to breathe the polluted air, eat the tainted, unregulated food, clothe yourself and your kids in flammable clothing, take the untested drugs, say goodbye to your favorite seafoods as over-fishing makes them extinct?
Do you really want that?
As for Ayn Rand, I'm sure you've seen where she went on "collective" healthcare when she couldn't afford to pay her medical bills. And the tea-party was bought and paid for by the Koch brothers.
The numbers in Milton Freidman's article are correct. You may dispute the conclusions, although, since he's been shown to be correct time after time, that will not be easy to do.
Actually, you'll find that only if you've got crony capitalism do you have those problems. Remember that one of the villains in Atlas Shrugged was Orren Boyle. By immorally using his government connections his company grew much larger than Reardon's.
When the government is small enough and the regulations are light and sane you'll find that regulatory capture ceases to be a problem and it can function properly as an impartial referee. As for the untested drugs, the FDA's lengthy delays and extremely onerous procedures do more harm than good. See http://www.fdareview.org/harm.shtml :
"Three bodies of evidence indicate that the costs of FDA requirements exceed the benefits. In other words, three bodies of evidence suggest that the FDA kills and harms, on net. First, we compare pre-1962 drug approval times and rates of drug introduction with post-1962 approval times and rates of introduction. Second, we compare drug availability and safety in the United States with the same in other countries. Third, we compare the relatively unregulated market of off-label drug uses in the United States with the on-label market. In the final section, before turning to reform options, we also discuss the evidence showing that the costs of FDA advertising restrictions exceed the benefits."
The over-fishing is simply the well known tragedy of the commons and the other examples you cite have long ago been shown to be variations on regulatory capture.
All you have to do to see what freedom can do is look around. Did the amazing variety and quality of affordable food come about due to government? Steve Jobs worked in the least regulated area of our economy and look what happened!
Government is the very last thing one should resort too. As George Washington said, "Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master."
mcsandberg1 quotz"...we also discuss the evidence showing that the costs of FDA advertising restrictions exceed the benefits."
Well, that's a shock. With tobacco industry executives on the board and with funding from Phillip Morris, the "Independent Institute" (creators of fdareview.org) wants to get rid of FDA restrictions on tobacco advertising. Who would have guessed?
http://www.sourcewatch.org/index.php?title=Independent_Institute
Greenpeace also shows the Independent Institute as a Koch brothers front group:
"Independence Institute - Koch Industries Climate Denial Front Group
$85,000 received from Koch foundations 2005-2009 [Total Koch foundation grants 1997-2009: $141,000]
The Colorado-based Independence Institute has hosted events dismissing the "Cult of Climate Change" and featuring Cato Institute fellows."
http://www.greenpeace.org/usa/en/campaigns/global-warming-and-energy/polluterwatch/koch-industries/independence-institute/
So, you're pushing the conclusions of a report generated by an industry funded group as proof we need to get rid of government regulations. This is typical behavior for shills and true believers. HINT: Industry funded studies result in industry funded conclusions.
You are just helping to advance the agenda of big industry by spreading industry propaganda. Funny how objectivists always seem to be doing that.
ctrl-z Congratulations on a very comprehensive demonstration of the logical fallacy of Poisoning the Well ( http://www.fallacyfiles.org/poiswell.html ).
"To poison the well is to commit a pre-emptive ad hominem strike against an argumentative opponent. As with regular ad hominems, the well may be poisoned in either an abusive or circumstantial way. For instance:
"Only an ignoramus would disagree with fluoridating water." (Abusive)
"My opponent is a dentist, so of course he will oppose the fluoridating of water, since he will lose business." (Circumstantial)
Anyone bold enough to enter a debate which begins with a well-poisoning either steps into an insult, or an attack upon one's personal integrity. As with standard ad hominems, the debate is likely to cease to be about its nominal topic and become a debate about the arguer. However, what sets Poisoning the Well apart from the standard Ad Hominem is the fact that the poisoning is done before the opponent has a chance to make a case.
Exposure:
Poisoning the Well is not, strictly speaking, a logical fallacy since it is not a type of argument. Rather, it is a logical boobytrap set by the poisoner to tempt the unwary audience into committing an ad hominem fallacy. As with all forms of the ad hominem, one should keep in mind that an argument can and must stand or fall on its own, regardless of who makes it."
The arguments and facts stand on their own, so your extensive research does nothing to disprove them.
"The arguments and facts stand on their own, so your extensive research does nothing to disprove them."
Hey, I proved my contention about the bias in the reports you referenced to "prove" your points. They are the product of groups funded by right-wingers and big industry. They come to conclusions paid for by right-wingers and big industry.
Since you can't dispute that you're pretending I'm poisoning the well.
Why don't you try to find some objective sources that support your contentions. What? You can't? Then maybe you should examine your beliefs and see how they hold up in the real world.
mcsandberg1 quotz an article from hoover.org: "The final paragraph from ( http://www.hoover.org/publications/hoover-digest/article/7822..."
Golly kids, let's see where hoover.org gets its money!
"Funding
The Hoover Institution receives much of its funding from private charitable foundations, including many attached to large corporations. A partial list of its recent donors includes:
Sarah Scaife Foundation, $9,845,500 from 1985-2008 - more than any other foundation in that period, according to Media Matters. (Its most recent grant to the Hoover Institution seems to be $850,000 in 2007.)[4]
Archer Daniels Midland Foundation
ARCO Foundation
Boeing-McDonnell Foundation
Chrysler Corporation Fund
Dean Witter Foundation
Exxon Educational Foundation [7]
Ford Motor Company Fund
General Motors Foundation
J.P. Morgan Charitable Trust
Merrill Lynch & Company Foundation
Procter & Gamble Fund
Rockwell International Corporation Trust
Transamerica Foundation
http://sourcewatch.org/index.php?title=Hoover_Institution_on_War,_Revolution_and_Peace
And as for the largest foundation donor, the Sarah Scaife Foundation:
"The Foundation commenced funding "New Right" causes in 1973 when Richard Mellon Scaife became the foundation's chairman. During the 1960s, Richard inherited an estimated $200 million from his mother, Sarah. His net personal worth was estimated at $800 million by Forbes magazine, which would make Richard the 38th richest person in the United States. Richard controls the Scaife, Carthage, and Alleghany foundations...
Grants from 1985-2001
Between 1985 and 2001, the Sarah Scaife Foundation donated $15,860,000 to the Heritage Foundation; $7,333,000 to the Institute for Policy Analysis; $6,995,500 to the Hoover Institution on War, Revolution and Peace; $6,693,000 to the Center for Strategic and International Studies (CSIS); $4,411,000 to the American Enterprise Institute; $2,575,000 to the Manhattan Institute for Policy Research; $1,855,000 to the George C. Marshall Institute; $1,808,000 to the Hudson Institute; and $1,697,000 to the Cato Institute."
http://66.39.128.35/index.php?title=Scaife_Foundations
Ever hear of Easter Island?
Cotton mills in the South have for nearly a hundred years used a trick that still works: When one articulate malcontent convinces a number of workers of how badly they are being treated, and at their insistence goes to the bosses with a list of demands, that worker returns from the office not with concessions won for the whole labor force, but with a promotion and a raise for one worker---him/her self.
Anybody who the workers elect as spokesperson for them all will find him/her self under tremendous pressure to sell out to the bosses. They usually do sell out because the alternative is being fired. That person will suffer untold guilt forever after, but she was barely making ends meet before. She can't afford to be fired.
That ad comes straight out of the opening to a modern day sci-fi movie and means about as much.
Job, jobs, jobs. The politicians' canard for the past 4 years. And anyone that believes any of of the elites mumbling or screaming that word should have their head examined.