Deinonychus antirrhopus

Employment Survey Divergence

I have noted in the past that there is a divergence between the establishment survey (which surveys businesses about their payroll hires) and the household survey (which surveys households about a number of questions including employment). Typically the household survey has been higher about job gains during this recovery. Many discount the household numbers as being "non-serious". I happen to disagree. This Washington Post article notes that some of the difference could be due to contractors.

Now this clearly isn't the same as increasing payrolls, but it is also a far cry from the Great Depression (many liberal pundits love to compare Bush to Herbert Hoover who was President at the start of the Great Depression). Granted in some cases it may mean a pay cut,

"So many talented people that I worked with in the past are available for freelance work," Gaebler said. "These are people who used to make $150,000 per year and now they are freelancing and pulling in $60,000 to $70,000 while they wait for the economy to turn around."

But $60-70 thousand beats nothing or unemployment I'm sure.

The big question is this sustainable and is it typically the case that one's pay is cut when going from payroll employment to contractor/consultant work.

Electrical engineer Dale DiBernardo, 43, of Oviedo, Fla., said he was happy to double his pay by joining Gibson Audio as an independent contractor. He said the idea of permanence in the workplace was an illusion, and he hopes to prosper by maintaining greater control of his career prospects.

Further, if this disparity persists it means our current unemployment statistics individually do not give an accurate picture of what is going on in the job market. Continually focusing on one survey if this disparity persists is bad economics and could quite easily lead to bad policy.