[FoRK] Jobs picture redux, or, when the ugly truth slips out

J.Andrew Rogers andrew at ceruleansystems.com
Mon Mar 15 21:28:02 PST 2004


On Mar 15, 2004, at 8:18 PM, rst at ai.mit.edu wrote:
>   In February, about 1.7 million persons were marginally attached to
>   the labor force, about the same as a year earlier.  (Data are not
>   seasonally adjusted.)  These individuals wanted and were available
>   to work and had looked for a job sometime in the prior 12 months.
>
> That agrees with you so far.  However:
>
>   They were not counted as unemployed, however, because they did not
>   actively search for work in the 4 weeks preceding the survey.
>
> Counting them as unemployed would raise the reported unemployment rate
> quite a bit, to 6.7%; note that this still does not count, for
> example, the 1.3 million people who are working part time because they
> want full time work and can't find it.


I didn't catch that part in what I was looking at, but a good point (I 
think I was looking at another related document).  However, you did not 
mention a very important point about this demographic:

   	"There were 484,000 discouraged workers in February, also about the 
same
	as a year earlier.  Discouraged workers, a subset of the marginally 
attached,
	were not currently looking for work specifically because they believed 
no jobs
	were available for them.  The other 1.2 million marginally attached 
had not
	searched for work for reasons such as school or family 
responsibilities.

The 1.2 million people who chose to go back to school or be 
stay-at-home parents or whatever do not count as unemployed by any 
reasonable definition of the term.  Therefore, I would not expect them 
to be included in the unemployment statistics.  The half million 
dropouts might be legitimately included, but I don't know what you 
would do with people who aren't looking.


I'm wondering about the way the part-time and marginal employment 
statistic is being collected and interpreted.  The tech sector was hit 
hardest by the market crash, and the way the above number is 
represented seems like it does not take into account a peculiarity of 
the tech labor market and the way it adapts to this environment.

With the exception of my girlfriend, almost *everybody* I know in 
Silicon Valley pretty much meets this definition these days (myself 
included).  And yet in most cases, they are in exactly the employment 
state they would prefer to be in given the circumstances.  How is this 
question asked?  Any way I can imagine they would ask it would get an 
answer of "it depends on dimensions outside the scope of the question".

Being unemployed and not looking for work is one thing (though I've 
probably been classified as that as well over the last few years).  But 
the marginal and part-time employment numbers as presented above seem 
suspect; it only really makes sense in a blue-collar town.  Or at 
least, it is arguably a less meaningfull statistic in Silicon Valley.


> Well, then, many fewer people must be looking for work.  Total nonfarm
> payroll employment during Dubya's term in office has famously dropped
> by about a couple million jobs -- something that hasn't happened
> during any Presidential term since Hoover.


Again, I don't see that as a big deal.  People not looking for work 
includes myself and most everyone I know.  A lot of people took it as 
an opportunity to do something different with their lives, raise some 
kids, and to generally take a break from the GoGo'90s (tm).  Or jump 
into the old skool startup game (e.g. without any significant venture 
capital) which is all the rage these days and comes with the added 
bonus of little or no income.  As a tangent, this last one is going to 
create a good spike in techie employment some time this year; just 
about everyone I know is up for real funding, and it looks like they'll 
get it.

And there is evidence of this in the 1.2 million that stopped working 
to go to school, take care of the family, and other personal pursuits.


> And a significant increase
> would have been required simply to keep pace with population growth.


This doesn't add up.  The total labor force shrunk as well; the 
population growth is irrelevant.


> There you go again.  The most widely cited unemployment figure is from
> a survey of employers.  There is a separate survey of households,
> which has been widely flogged lately by right-wing partisans because
> the picture it presents is not quite as bleak as the numbers coming
> out of the payroll survey -- but Alan Greenspan, of all people, has
> publicly called them to task for it, as that survey is intrinsically
> less reliable.


Hrmm, I've seen both sources published.  Currently, they are close 
enough to the same number that the difference is underneath the noise 
floor.  The criticisms of the household survey in the article (elided) 
are "what if" in nature and not substantiated in this particular 
instance, though valid concerns generally.  At the same time, the 
criticisms against the business survey are arguably at least as 
applicable in this case.  Call it a wash, at least for the general 
unemployment rate.

Speaking of "partisans", 5.6% unemployment is not "bleak" by any 
stretch of the imagination.  What I have seen some right-wing partisans 
rightly flogging is exactly that type of description when there is no 
rational basis to make such an assessment.


> In the future, you might want to point out the discrepancies
> explicitly, with direct quotes from both sources.  It's not that hard,
> and it's a lot more informative for your readers.


Fair enough.  I probably shouldn't post from the office, it affects 
quality.

j. andrew rogers





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