Who should be consiered unemployed?

pinqy

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Jun 8, 2009
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Tomorrow, the Employment Situation Report comes out and as usual, there will be idiots claiming the government doesn't count people not receiving unemployment benefits, or that the government isn't counting people who should be counted etc. So let's discuss.

Question: What exactly do we want to measure and why?
Answer: We want to measure the Labor Market and how it is changing, especially how difficult it is to get a job.

First difficulty is that not everyone can freely participate in the labor market. There are laws and barriers afffecting groups of people. While children can work, there are significant restrictions as to field, hours, changing jobs etc. At approx age 16 the restrictions are gone, almost all jobs are open for full or part time work. So we ignore anyone under 16.

Next group are prisoners. While some "work" it's not really a labor market system and working or not working are not free choices of entry and exit. So we ignore prisoners.

Next group are those mentally or physically incapable of working. While many disabled and those with psychological conditions do work, those who are institutionalized or in long term care (such as a hospice) can't. So we ignore those in an institution or long term care.

There remains many disabled who can't work but aren't in an institution, but since some can and some can't work, there's no bright line, so we include them all.

Next: Retirees. Many countries exclude those over the age of 65. For a country with mandatory retirement, or generous government pensions, that is sensible as almost all those over 65 don't need to work and don't work and including them can distort the picture.
But in the US, there is no mandatory retirement (except in military/police) and retirement benefits are not as generous or universal. So no maximum age limit for us.

Last, military. For a while, they were counted as employed (1984-1994) but since there's no free exit and it's not a market system, including them just raises the number of employed by a fairly constant level, so it's better to exclude the military.

So we have our population: The Adult Civilian Non-Institutional Population.
How do we divide that up? The key is to be as objective as possible. Since we have to use a survey (it's just not possible to do a full count every month), any subjectivity will increase our error, so we have to avoid any possible overlaps or judgement calls.

Let's look at Employed. Who is employed? Some have suggested a minimum number of hours worked, but is that a good idea? Plenty of people voluntarily work few hours, or in a particular week only work a few hours. Should we say they don't really have a job or aren't really working? That's very subjecive. We don't want to run into cases were someone nomrmally works 40 hours a week, but in the particular week of the survey she only worked 2 hours and counted as unemployed. So we set a bright line of 1 hour for pay, and also include those as employed people temporarily absent due to brief illness, injury, vacation, strike, bad weather etc. We can always look at sub groups later.

Unpaid labor. Some people don't get paid (directly) for work, either charity work or working on a family farm or family business. Let's not include charity work, because that's not really part of the labor market. But family business/farm is a different story...the person is either just helping out, (meaning if they don't already have another job they wouldn't take one if they weren't working for family and/or no one would have to be hired in their place) or they are a substantial part of the business preventing them from another job and filling a job slot no one else can take. So let's set a bright line of 15 hours a week and anyone working without pay on family business farm 15 hours or more a week is employed.

What about someone hired but not yet working? Many things can happen, so we won't call them employed until they're actually working.

Now for the Unemployed. In casual usage, this can mean many different things, but what we want is a precise, objective definition. And what we're looking for is available workers who aren't working. This has an impact on the labor market..supply over demand. Some people don't want to work...retirees, housewives/husbands, full time students, and some people on drugs or alcohol or criminals or lazy. So let's not count anyone who doesn't want a job.

Should we count everyone who says they want a job? They could be lying. They could be unable to take a job if offered (meaning they're not available labor). So what bright line can we set? If someone is actually looking for work, sending a resume, going to an interview, on the union list, then we can safely assume that they are really available for work. But if someone isn't DOING anything about a getting a job, then they're not available, anymore than someone who doesn't want to work. Sure they may still consider themselves "unemployed" and they may sincerely want to work, but since they're not available, since they're not part of the actual supply of labor and can't be hired, we exclude them.

So we have our Employed, we have our Unemployed....this is our Labor Force, our available supply of people who can work or be hired. Everyone else is Not in the Labor Force.

Since the population tends to grow, for an historical comparison, it's better to look at rates/ratios/percentages to get a clearer picture.

Labor Force Participation Rate: The Labor Force as a percent of the Population. This can be largely affected by non-economic factors as the increase of women into the labor force in the 60s and 70s showed, but it gives a good look at how much of the population is trying to work.

Employment-Population Ratio: this tells us the percent of the population that's actually working. Again, non-economic factors play a role but looking at the changes can tell us useful things.

Unemployment rate: Unemployed as a percent of the Labor Force. This tells us how much of available labor...people willing and able and available to work... is not being used. This is all economic factors...the percent of people trying and failing to get a job.

Does this give a complete picture of the Labor Market? Of course not...it's not meant to. It doesn't tell us types of job, if people are working as much as they want to, people who don't believe they would be successful. But it tells us what we're looking for: the percent of people who we know for sure cannot get a job.

I think that explains the basics. I'll be happy to clarify questions or discuss any real issues.
 
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I'll bet you made this same argument during Bush's 8 years as President, right? SURE you did.

It's always amazing how the Bolshevik Obamanistas have no limits, when it comes to defending their Messiah, and EVERYTHING he says, does, and doesn't do.
 
The issue is simple, when 150k jobs are created and you need 250 to maintain... Yet the UE rate goes down .2% then you have a choice... You can make believe things are getting better or you can understand that things are getting worse and deal with it. You chose to make believe.
 
I'll bet you made this same argument during Bush's 8 years as President, right? SURE you did.
Yes, I did. And under Clinton. Nothing has changed.

It's always amazing how the Bolshevik Obamanistas have no limits, when it comes to defending their Messiah, and EVERYTHING he says, does, and doesn't do.

Since there have been no major changes under Obama (collection of long term unemployed has changed but that's about it) you don't really have a point. What I wrote has been pretty much the same since Truman, so defending the methodology is hardly defending Obama.

I note that you didn't even attempt to make any real discussion or argument.
 
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Neither side expects the other to be consistant. I remember the libs making this argument during the Reagan years.
Of course, the real cuteness was during the Carter years during the run up to the 1980 election when the military was added to the employed part of the picture. Presto, 2 million more employed persons and the unemployment rate when down by a substantial fraction. that got quietly reversed after the election.

What is important here is that unemployment is no longer the short term thing it has usually been. We have people looking for work who have been looking for three years or more. We have folks just plain resigning from the work force and don't look any more. People who four years ago had successful careers.

Even under the regime of 99 week unemployment rather than 26 week, we have large numbers who have gone beyond benefits.
 
The issue is simple, when 150k jobs are created and you need 250 to maintain...
To maintain what? And does "it" need to be maintained?

Yet the UE rate goes down .2% then you have a choice... You can make believe things are getting better or you can understand that things are getting worse and deal with it. You chose to make believe.
Or you can do actual analysis of the data. "Jobs" comes from the Current Employment Statistics Survey (CES) while Unemployment (and total employment) comes from the Current Population Survey (CPS). The CES is non-farm payroll employment. It excludes agriculture, the self-employed, unpaid family workers and private employees (private cooks, nannies, maids, etc). So "jobs" may go up 150K, but total employment goes up 300K.

You can't directly compare 2 measures that measure different things.

Much of the drop in UE has been for the wrong reasons...a decreasing labor force. That was not the case for the January drop. At best things have been spotty lately...up and down. You can't just look at one number or one measure and say "things are good" or "things are bad."
 
The BEST unit of measure is, I think to determine how many Americans are WORKING.

Instead we get reports on the number of people who SELF REPORTED they aren't working but are looking for work.
 
logistics

think in logistics

figure out a workable/reliable/cost effective way to determine the unemployed.
 
Of course, the real cuteness was during the Carter years during the run up to the 1980 election when the military was added to the employed part of the picture. Presto, 2 million more employed persons and the unemployment rate when down by a substantial fraction. that got quietly reversed after the election.
Completely untrue. Military weren't added until 1984 and then removed in 1994. It difn't matter much because the civilian rate was published alongside and more people paid attention to it.

What is important here is that unemployment is no longer the short term thing it has usually been. We have people looking for work who have been looking for three years or more. We have folks just plain resigning from the work force and don't look any more. People who four years ago had successful careers.

Even under the regime of 99 week unemployment rather than 26 week, we have large numbers who have gone beyond benefits.

True, too true,
 
What is important here is that unemployment is no longer the short term thing it has usually been. We have people looking for work who have been looking for three years or more. We have folks just plain resigning from the work force and don't look any more. People who four years ago had successful careers.

Even under the regime of 99 week unemployment rather than 26 week, we have large numbers who have gone beyond benefits.

How do we reduce unemployment rapidly? Reduce Unemployment with Little Price Increase
 
The BLS has six different measures of unemployment. These are U-1 through U-6. Each expands the requirement to be counted as unemployed and thus each reports a higher rate. The unemployment rate is not determined based on whether a person is collecting unemployment. It is determined based on a survey. The descriptions and data are available at;

Current Population Survey (CPS)

It includes;
U-1, persons unemployed 15 weeks or longer, as a percent of the civilian labor force. 5.3%
U-2, job losers and persons who completed temporary jobs, as a percent of the civilian labor force. 5.3%
U-3, total unemployed, as a percent of the civilian labor force (this is the definition used for the official unemployment rate). 8.9%
U-4, total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers. 9.5%
U-5, total unemployed, plus discouraged workers, plus all other marginally attached workers, as a percent of the civilian labor force plus all marginally attached workers. 10.4%
U-6, total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers. 15.9%

The BLS provides the data for people that would take a job if they were offered one at Alternative Measures of Labor Underutilization for States

The significance of the numbers is not so much in the absolute value. The significance is how it compares to previous years and months or how they compare to the expected rate for "full employment".

By law, the federal government is required to maintain full employment.

It has been said that, during the Carter administration (1977–1981), the government attempted to lower this to 5%. The effect was that prices rose rather than output. It was decided that the natural rate of unemployment was about 7%, at least during that time period. The reasoning is simple. Attempting to stimulate the economy by increasing GDP can do two things, it can increase output and it can increase prices. While unemployment was decreased to about 6%, inflation hit 13.3%.

There are websites that provide unofficial unemployment statistics which report a higher number. But, regardless of the absolute number, when unemployment goes up, both numbers go up and when unemployment goes down, both numbers go down. If employment was 100%, both numbers would be zero. If employment was zero, both numbers would be 100%. So they both go up and down by the similarly relative amount.

The BSL, at Table A-16. Persons not in the labor force and multiple jobholders by sex, not seasonally adjusted, includes tables for

Total not in the labor force
-Persons who currently want a job
--Marginally attached to the labor force
---Discouraged workers
---Other persons marginally attached to the labor force

Total multiple jobholders
-Percent of total employed
--Primary job full time, secondary job part time
--Primary and secondary jobs both part time
--Primary and secondary jobs both full time
--Hours vary on primary or secondary job

These days, the number of marginally attached and part time workers seems very important. The number of people not in the labor force is higher for January of 2012 then any previous month.
 
Still a long slow slog back to normal employment figures to go...
:confused:
Unemployment now 8.2% but job gains low
WASHINGTON, April 6,`12 (UPI) -- The U.S. economy added 120,000 jobs in March, pushing the unemployment rate down to 8.2 percent, the Labor Department said Friday.
While the jobs added brought the unemployment rate down for the same month it rose in Europe, the addition of only 120,000 jobs will likely disappoint investors, observers said. Not only did the gain fall short of the 203,000 new jobs forecast, it was the lowest addition since November, which also posted a gain of 120,000 jobs. For the months in between, December, January and February, the economy added 200,000, 243,000 and 227,000 jobs, respectively.

President Obama commented on Friday's jobless rate during remarks at a White House forum focusing on women and economic issues. "We welcome today's news that our businesses created another 121,000 jobs last month, and the unemployment rate ticked down," Obama said. "Our economy has now created more than 4 million private sector jobs over the past two years, and more than 600,000 in the past three months alone. However, he said, "it's clear to every American that there will still be ups and downs along the way, and that we've got a lot more work to do."

A burst of hiring in the winter of 2010-2011 slowed considerably by late spring and remained low through the summer and fall. Statistics show 12.7 million people are listed as out of work. Demographically, the unemployment rate is 7.6 percent for adult men and 7.4 percent for adult women. Among teenagers, the jobless rate is 25 percent. For whites, blacks and Hispanics, the unemployment rates were 7.3 percent, 14 percent and 10.3 percent, respectively. The number of people listed as long-term unemployed (having not worked for 27 weeks or more) was unchanged at 5.3 percent.

For those workers, often new training or a new career choice is necessary, in many cases because technology or the recession or both eliminated their old jobs. In addition, 2.4 million people are listed as marginally attached to the workforce, a number essentially unchanged from a year earlier. Marginally attached refers to people no longer counted in the workforce although they looked for a job sometime in the past 12 months. Job sectors adding jobs included manufacturing (up by 37,000 in March), leisure and hospitality (up by 37,000) healthcare (up by 26,000) and financial services (up by 15,000), the department said.

Read more: Unemployment now 8.2% but job gains low - UPI.com
 
The question that really needs to be asked is can the current ecenomic model of mass production an mass consumption continue. The way jobs are produced is by a worker unit being able to produce so many gizmo units. If so many gizmos are not consumed worker unit will not have job because a certain level of production must be mantained in order for business owner to pay worker the specified salary that will give worker the scheduled pay unit required per hour so he can live an put specified amount of fuel in his worker unit system to produce energy needed to go back to work an produce specified amount of production for business owner to pay specified hourly rate, repeat repeat, repeat, warning danger will robinson. Warrning earth is being deepleated an raped warning waning, complete , economic an environmental collapse. We need to ask the right questions in order to find a solution, so far its politics an economy. The right question in my opinion is,,,,, economy>>>> environment>>>>jobs>>>>connection>>>>> if not adressed system will collapse. The underlying reason for all this turmoil in all counties that is going on right now. If you are involved in mass production that is part of the problem jus my opinion.
 
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