Wal-Mart and the 3.3 Million Job Gap

Even conservative pundit George Will is joining the Up With Wal-Mart campaign with a piece about the Wal-Mart store just outside the city limits of Chicago. He writes about the resentful Wal-Mart shopper who didn’t get a job at the new store because

the person doing the hiring "had an attitude." So why is the woman shopping here anyway? She looks at the questioner as though he is dimwitted and directs his attention to the low prices of the DVDs on the rack next to her.

But the big question is not old economy jobs at Wal-Mart but the on-going mystery about the 3.3 million job gap at the Department of Labor. If you have one of those missing jobs, writes Ashby M. Foote III,
“contact Secretary Elaine Chao at www.dol.gov.”

The 3.3 million job gap is the difference between the job count in the Department of Labor’s Household Survey and its Establishment Survey.

[T]he BLS uses two monthly sample surveys conducted by the U.S. Census Bureau. For the top-down view, 160,000 businesses and government agencies are contacted for the Current Employment Statistics (CES), which is referred to as the “payroll” or “establishment” survey. This is the “headline” number, and it is the survey focused on by the press and the financial markets. For the bottom-up perspective, 60,000 households are contacted for the Current Population Survey (CPS), better known as the “household” survey.

Problem is that there is are 3.3 million jobs more in the Household Survey and nobody can figure out why.

Foote suggests that we should look to Chris Anderson and his book The Long Tail. According to Anderson there are three forces that are creating jobs at small “boutique” businesses, the ones that don’t show up on the radar of the Establishment Survey

Force 1: The democratization of the tools of production. (The obvious example is the PC as a tool for publishing and multimedia.)
Force 2: The democratization of the tools of distribution. (For instance, the combination of the PC and the Internet makes everyone a distributor).
Force 3: Connecting supply and demand. (Search filters and feedback loops like those found on Google, iTunes, Amazon, and Netflix help niche content find interested buyers and users.)

Still, you have to respect Wal-Mart and its 1.3 million old-style jobs. Because it is taking people with an attitude and little in the way of job skills and making them into productive members of the twenty-first century society.

Pity it didn’t have a job for the lady in Chicago.