One of the keys to understanding the state of job creation
in our country is to understand the science behind the numbers. Everyone is all
too familiar with the unemployment rate. This is the number which accompanies
the monthly jobs reports and currently sits at 7.3%. This number is derived
from a monthly survey the US Department of Labor performs. This survey seeks to
gauge America's
labor participation, specifically how many people are working full time, how
many are looking for work, and how many have given up looking for work.
The headline unemployment number is derived by calculating how many
people were unemployed but had been looking for work in the last month divided
by the total workforce.
There is another number that is not widely publicized, which is the U6 number. This number includes the population who are part time workers but who want to work full time and people who are unemployed and have not been recently looking but want a full time job. This number is much higher, and currently stands at 13.7%.
A further segment of the population that is missing in the survey is the unemployed who have given up looking all together. These long term unemployed are not even being calculated in the survey data. They are considered no longer part of the workforce. This group of individuals may be leaving the workforce for many reasons (such as going on disability), but it is a fact that if there was a greater demand for employees this group would be shrinking instead of growing.
Even more confusing with these numbers is that the survey that the Department of Labor uses is not always accurate in identifying who is working and who is not. For example, there is an article at PBS which discusses the issues surrounding the growing category of individuals who are freelancers. Sara Horowitz, head of the Freelancers Union, makes the case that the survey questions fail to capture the changing and frequently temporary nature of the work that freelancers do. It also doesn't adequately categorize those who prefer several part time positions to one full time position. The article can be found here, and is a recommended read:
There is another number that is not widely publicized, which is the U6 number. This number includes the population who are part time workers but who want to work full time and people who are unemployed and have not been recently looking but want a full time job. This number is much higher, and currently stands at 13.7%.
A further segment of the population that is missing in the survey is the unemployed who have given up looking all together. These long term unemployed are not even being calculated in the survey data. They are considered no longer part of the workforce. This group of individuals may be leaving the workforce for many reasons (such as going on disability), but it is a fact that if there was a greater demand for employees this group would be shrinking instead of growing.
Even more confusing with these numbers is that the survey that the Department of Labor uses is not always accurate in identifying who is working and who is not. For example, there is an article at PBS which discusses the issues surrounding the growing category of individuals who are freelancers. Sara Horowitz, head of the Freelancers Union, makes the case that the survey questions fail to capture the changing and frequently temporary nature of the work that freelancers do. It also doesn't adequately categorize those who prefer several part time positions to one full time position. The article can be found here, and is a recommended read:
As this blog continues to explore this issue, it’s important
to take all numbers with a grain of salt. As Mark Twain said, "'There are three kinds of lies: lies, damned lies,
and statistics"!
0 comments:
Post a Comment