Thursday, May 04, 2006

Seeing the glass half empty 

UPDATED - See below

With oil revenues way up and the economy booming you would think Venezuelan newspapers would be full of nothing but good economic news. For the most part they are. But leave it to the Venezuelan opposition to find a dark cloud for every silver lining – or at least try.

One example is an article that appeared in El Universal today under the headline of “Oil boom with few jobs”. Ok, based on that healine I guess not many new jobs have been created recently in Venezuela.

As it turns out however, quite a few jobs have been created. In fact, as the article points out over the past 12 months 542 thousand new jobs have been created. Not bad at all. To put it in perspective, for the United States, which has 12 times the population of Venezuela, to create a comparable number of new jobs it would have to create 6 million jobs in a year, something I’m pretty sure it has never done (Bush in his first term created a paltry 120,000 jobs).

Yet the article, in addition to its misleading title, has phrases like “where are the jobs” and “there are new jobs but they are few”. What is curious about this is that in general the opposition writes doom and gloom articles without giving any numbers to back up their assertions. In this case they do give numbers yet in their determination to say things are going badly (when clearly they aren’t) they just ignore them.

In another attempt to accentuate the negative the article then points out that while there were more than a half million new jobs about 350,000 young people enter the labor force each year so the “net” job creation of 150,000. Even the arithmetic on this isn’t right as the total number of new jobs was 542,000 so the number of jobs over and above new entrants in the work force was 192,000. That certainly seems like an excellent performance by any standard, unless they are somehow expecting Venezuela to become a first world country and have full employment in only a year or two.

Seeing as we are obviously dealing with good news here, not bad, lets leave the opposition negativity behind for a bit and look at some more numbers. First, the article came with this graph:

The graph shows month by month employment numbers from March 2005 to March 2006. The yellow represents private sector employment (the number in the yellow section is total private sector employment) and the red portion is public sector employment (with the number of public sector employees written by the side). On the bottom it gives the total number of new private sector jobs, 376,016, and the number of new public sector jobs, 166,452.


OilWars readers, we have a problem.

I'm pretty sure I made a big mistake. I did the post as if those numbers were all jobs in the formal sector of the economy - ie, they were what most of us would consider "real" jobs. However, in thinking about it I realized that with almost half the labor force in the "informal" sector that if all the jobs in the numbers above were in the formal sector there would then have to be another 7 or 8 million informal jobs making the total number of people working in Venezuela 18 or 19 million people out of a population of 25 million. That is an unrealistic number.

In checking the INE site more they give they give the over 15 population as 18 million with a total of 12 million people active in the labor force. Sooo, the numbers I have in this post almost certainly INCLUDE INFORMAL sector jobs (everyone including street vendors).

That of course changes everything including the conclusions of the post. So I'm going to remove the bottom half of the post. Please be aware even the conslusions in the first part of the post may now be incorrect and require revision once this is all sorted out. I will try to find the numbers on the percentage of people in the formal and informal sectors so that I can then recalculate the numbers and tell you how many formal jobs were created and how many informal ones were created. I will then re-do the conclusions as appropriate.

Something never did seem quite right about these numbers and I should have reviewed them better before posting. I apoligize for the error.


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