> -----Original Message-----
> From: J. Barkley Rosser, Jr. [SMTP:rosserjb at jmu.edu]
> Sent: Friday, June 18, 1999 12:33 PM
> To: lbo-talk at lists.panix.com
> Subject: Re: Unemployment 4.2%
>
> Thanks for the clarification, Doug. The question
> of how the unemployment rate is measured is a
> big and murky one. From where I sit the factor
> that skews the numbers the most is that of the
> labor force participation rate, people dropping in
> and out of the labor force, which they do a lot. It
> is fairly frequently the case the the changes in labor
> force participation swamp the changes in employment,
> thus meaning that the change in the unemployment rate
> actually is in the opposite direction of what is actually
> happening to unemployment, say measured as a
> percent of the working age population.
> A simple example is the fact that from 1984 to 1987
> the unemployment rate was nearly constant at around
> 7%. Nevertheless, with the exception of a blip in part
> of 1986, employment was steadily rising both in absolute
> numbers and as a percent of the working age population.
> It was just that all increases in employment were matched
> by increases in labor force participation. One always has
> to read behind the headlines to see what is really going on.
> Right now the percent of the working age population in
> the US that is employed is quite high in historical terms.
> A big increase in women's employment (and labor force
> participation) has swamped a smaller decline in men's
> employment and labor force participation (the latter concentrated
> in highly paid industrial employment) over the last several
> decades. Of course a lot of these new jobs have been low
> paying and the distribution of wages and incomes has become
> much more unequal in the US. Also a lot of these jobs involve
> longer working hours.
> Barkley Rosser
> -----Original Message-----
> From: Doug Henwood <dhenwood at panix.com>
> To: lbo-talk at lists.panix.com <lbo-talk at lists.panix.com>
> Date: Thursday, June 17, 1999 4:38 PM
> Subject: Re: Unemployment 4.2%
>
>
> >Adam Stevens wrote:
> >
> >>Didn't the Reagan Administration do something like that here, too?
> >
> >They briefly tried to include the armed forces in the count, which
> lowered
> >the U rate by a tenth of a point or so, but no one bought it and the
> BLS
> >went back the old civilian rate.
> >
> >>If I
> >>understand correctly, the US unemployment rate is simply the number
> of
> >>people who actually seeking/receiving unemployment benefits or
> assistance.
> >
> >The full skinny is at <http://www.bls.gov/cps_htgm.htm >. It's about
> 57k or
> >I'd post it. Here are some highlights.
> >
> >Doug
> >
> >----
> >
> >Where do the statistics come from?
> >
> >Early each month, the Bureau of Labor Statistics (BLS) of the U.S.
> >Department of Labor announces the total number of employed and
> unemployed
> >persons in the United States for the previous month, along with many
> >characteristics of such persons. These figures, particularly the
> >unemployment rate--which tells you the percent of the labor force
> that is
> >unemployed--receive wide coverage in the press, on radio, and on
> television.
> >
> >Some people think that to get these figures on unemployment the
> Government
> >uses the number of persons filing claims for unemployment insurance
> (UI)
> >benefits under State or Federal Government programs. But some people
> are
> >still jobless when their benefits run out, and many more are not
> eligible
> >at all or delay or never apply for benefits. Indeed, typically less
> than a
> >third of the unemployed file claims for UI benefits. So, quite
> clearly, UI
> >information cannot be used as a source for complete information on
> the
> >number of unemployed.
> >
> >Other people think that the Government counts every unemployed person
> each
> >month. To do this, every home in the country would have to be
> >contacted--just as in the population census every 10 years. This
> procedure
> >would cost way too much and take far too long. Besides, people would
> soon
> >grow tired of having a census taker come to their homes every month,
> year
> >after year, to ask about job-related activities.
> >
> >Because unemployment insurance records relate only to persons who
> have
> >applied for such benefits, and since it is impractical to actually
> count
> >every unemployed person each month, the Government conducts a monthly
> >sample survey called the Current Population Survey (CPS) to measure
> the
> >extent of unemployment in the country. The CPS has been conducted in
> the
> >United States every month since 1940 when it began as a Work Projects
> >Administration project. It has been expanded and modified several
> times
> >since then. As explained later, the CPS estimates, beginning in 1994,
> >reflect the results of a major redesign of the survey.
> >
> >There are about 60,000 households in the sample for this survey. The
> sample
> >is selected so as to be representative of the entire population of
> the
> >United States. In order to select the sample, first, the 3,137
> counties and
> >county-equivalent cities in the country are grouped into 1,973
> geographic
> >areas. The Bureau of the Census then designs and selects a sample
> >consisting of 729 of these geographic areas to represent each State
> and the
> >District of Columbia. The sample is a State-based design and reflects
> urban
> >and rural areas, different types of industrial and farming areas, and
> the
> >major geographic divisions of each State.
> >
> >Each of the 729 areas in the sample is subdivided into enumeration
> >districts of about 300 households. The enumeration districts, in
> turn, are
> >divided into smaller clusters of about four dwelling units each,
> through
> >the use of address lists, detailed maps, and other sources. Then, the
> >clusters to be surveyed are chosen statistically, and the households
> in
> >these clusters are interviewed. The approximately 60,000 households
> >eligible for interview each month represent about 1 in every 1,600
> >households in the country.
> >
> >Each month, one-fourth of the households in the sample are changed,
> so that
> >no household is interviewed more than 4 consecutive months. This
> practice
> >avoids placing too heavy a burden on the households selected for the
> >sample. After a household is interviewed for 4 consecutive months, it
> >leaves the sample for 8 months and then is again interviewed for the
> same 4
> >calendar months a year later, before leaving the sample for good.
> This
> >procedure results in approximately 75 percent of the sample remaining
> the
> >same from month to month and 50 percent from year to year.
> >
> >Each month, 1,500 highly trained and experienced Census Bureau
> employees
> >interview persons in the 60,000 sample households for information on
> the
> >labor force activities (jobholding and jobseeking) or non-labor force
> >status of the members of these households during the week that
> includes the
> >12th of the month (the reference week). This information, relating to
> all
> >household members 16 years of age and over, is entered by the
> interviewers
> >into laptop computers; at the end of each day's interviewing, the
> data
> >collected are transmitted to the Census Bureau's central computer in
> >Washington, D.C. In addition, a portion of the sample is interviewed
> by
> >phone through two central data collection facilities. (Prior to 1994,
> the
> >interviews were conducted using a paper questionnaire which had to be
> >mailed in by the interviewers each month.)
> >
> >Each person is classified according to the activities he/she engaged
> in
> >during the reference week. Then, the total numbers are "weighted," or
> >adjusted to independent population estimates (based on updated
> decennial
> >census results). The weighting takes into account the age, sex, race,
> >Hispanic origin, and State of residence of the population, so that
> these
> >characteristics are reflected in the proper proportions in the final
> >estimates.
> >
> >A sample is not a total count and the survey may not produce the same
> >results that would be obtained from interviewing the entire
> population. But
> >the chances are 90 out of 100 that the monthly estimate of
> unemployment
> >from the sample is within 230,000 of the figure obtainable from a
> total
> >census. Since monthly unemployment totals have ranged between about 6
> and
> >11 million in recent years, the possible error resulting from
> sampling is
> >not large enough to distort the total unemployment picture.
> >
> >Because these interviews are the basic source of data for total
> >unemployment, information must be factual and correct. Respondents
> are
> >never asked specifically if they are unemployed, nor are they given
> an
> >opportunity to decide their own labor force status. Unless they
> already
> >know how the Government defines unemployment, many of them may not be
> sure
> >of their actual classification when the interview is completed.
> >
> >Similarly, interviewers do not decide the respondents' labor force
> >classification. They simply ask the questions in the prescribed way
> and
> >record the answers. Individuals are then classified as employed or
> >unemployed by the computer based on the information collected and the
> >definitions programmed into the computer.
> >
> >All interviews must follow the same procedures to obtain comparable
> >results. Because of the crucial role interviewers have in the
> household
> >survey, a great amount of time and effort is spent maintaining the
> quality
> >of their work. Interviewers are given intensive training, including
> >classroom lectures, discussion, practice, observation, home-study
> >materials, and on-the-job training. At least once a year, they
> convene for
> >day-long training and review sessions, and, also at least once a
> year, they
> >are accompanied by a supervisor during a full day of interviewing to
> >determine how well they carry out their assignments.
> >
> >A selected number of households are reinterviewed each month to
> determine
> >whether the information obtained in the first interview was correct.
> The
> >information gained from these reinterviews is used to improve the
> entire
> >training program.
> >
> >
> >
> >What are the basic concepts of employment and unemployment?
> >
> >The basic concepts involved in identifying the employed and
> unemployed are
> >quite simple:
> >
> >
> >* People with jobs are employed.
> >
> >* People who are jobless, looking for jobs, and available for work
> >are unemployed.
> >
> >* People who are neither employed nor unemployed are not in the labor
> >force.
> >
> >
> >
> >The survey is designed so that each person age 16 and over who is not
> in an
> >institution such as a prison or mental hospital or on active duty in
> the
> >Armed Forces is counted and classified in only one group. The sum of
> the
> >employed and the unemployed constitutes the civilian labor force.
> Persons
> >not in the labor force combined with those in the civilian labor
> force
> >constitute the civilian noninstitutional population 16 years of age
> and
> >over. Under these concepts, most people are quite easily classified.
> For
> >example:
> >
> >Elizabeth Lloyd reported to the interviewer that last week she worked
> 40
> >hours as a sales manager for the Western Beverage Company.
> >
> >Steve Hogan lost his job when the local plant of the Chariot Aircraft
> >Manufacturing Company was closed down. Since then, he has been
> visiting the
> >personnel offices of the other factories in the town trying to find a
> job.
> >
> >Linda Coleman is a homemaker. Last week, she was occupied with her
> normal
> >household chores. She neither held a job nor looked for a job. Her
> 80-year
> >old father who lives with her has not worked or looked for work
> because of
> >a disability.
> >
> >
> >Each of these examples is clear cut. Elizabeth is employed; Steve is
> >unemployed; and Linda and her father are not in the labor force.
> >
> >
> >
> >Who is counted as employed?
> >
> >Not all of the wide range of job situations in the American economy
> fit
> >neatly into a given category. For example, people are considered
> employed
> >if they did any work at all for pay or profit during the survey week.
> This
> >includes all part-time and temporary work, as well as regular
> full-time
> >year-round employment. Persons also are counted as employed if they
> have a
> >job at which they did not work during the survey week because they
> were:
> >
> >* On vacation;
> >
> >* Ill;
> >
> >* Experiencing child-care problems;
> >
> >* Taking care of some other family or personal obligation;
> >
> >* On maternity or paternity leave;
> >
> >* Involved in an industrial dispute; or
> >
> >* Prevented from working by bad weather.
> >
> >
> >
> >These persons are counted among the employed and tabulated separately
> as
> >"with a job but not at work," because they have a specific job to
> which
> >they will return.
> >
> >But what about the two following cases?
> >
> >George Lewis is 16 years old, and he has no job from which he
> receives any
> >pay or profit. However, George does help with the regular chores
> around his
> >father's farm about 20 hours each week.
> >
> >Lisa Fox spends most of her time taking care of her home and
> children, but,
> >all day Friday and Saturday, she helps in her husband's computer
> software
> >store.
> >
> >
> >Under the Government's definition of employment, both George and Lisa
> are
> >considered employed. They fall into a group called "unpaid family
> workers,"
> >which includes any person who worked 15 hours or more in a week
> without pay
> >in a family-operated enterprise. Such persons contribute
> significantly to
> >our productive effort and are an important part of our labor supply,
> >particularly in agriculture and retail trade. However, unpaid family
> >workers who work fewer than 15 hours per week are counted as "not in
> the
> >labor force."
> >
> >
> >
> >Who is counted as unemployed?
> >
> >
> >Persons are classified as unemployed if they do not have a job, have
> >actively looked for work in the prior 4 weeks, and are currently
> available
> >for work. Actively looking for work may consist of any of the
> following
> >activities:
> >
> >
> >* Contacting:
> >An employer directly or having a job interview;
> >A public or private employment agency;
> >Friends or relatives;
> >A school or university employment center;
> >
> >* Sending out resumes or filling out applications;
> >
> >* Placing or answering advertisements;
> >
> >* Checking union or professional registers; or
> >
> >* Some other means of active job search.
> >
> >
> >
> >Passive methods of jobsearch do not result in jobseekers actually
> >contacting potential employers, and therefore are not acceptable for
> >classifying persons as unemployed. These would include such things as
> >attending a job training program or course or merely reading the want
> ads.
> >
> >Workers expecting to be recalled from layoff are counted as
> unemployed,
> >whether or not they have engaged in a specific jobseeking activity.
> But, in
> >all other cases, the individual must be actively engaged in some job
> search
> >activity and available for work (except for temporary illness).
> >
> >The questions used in the interviews are carefully designed to elicit
> the
> >most accurate picture of each person's labor force activities. Some
> of the
> >major questions that determine employment status are: (The
> capitalized
> >words are emphasized when read by the interviewers.)
> >
> >1. Does anyone in this household have a business or farm?
> >
> >2. LAST WEEK, did you do ANY work for (either) pay (or profit)?
> >
> >If the answer to question 1 is "yes" and the answer to question 2 is
> "no,"
> >the next question is:
> >
> >3. LAST WEEK, did you do any unpaid work in the family business or
> farm?
> >
> >For those who reply "no" to both questions 2 and 3, the next key
> questions
> >used to determine employment status are:
> >
> >4. LAST WEEK, (in addition to the business,) did you have a job
> either full
> >or part time? Include any job from which you were temporarily absent.
> >and
> >5. LAST WEEK, were you on layoff from a job?
> >and
> >6. What was the main reason you were absent from work LAST WEEK?
> >
> >For those who respond "yes" to question 5 about being on layoff, the
> >following questions are asked:
> >
> >7. Has your employer given you a date to return to work?
> >and, if "no,"
> >8. Have you been given any indication that you will be recalled to
> work
> >within the next 6 months?
> >
> >If the responses to either question 7 or 8 indicate that the person
> expects
> >to be recalled from layoff, he/she is counted as unemployed. For
> those who
> >were reported as having no job or business from which they were
> absent or
> >on layoff, the next question is:
> >
> >9. Have you been doing anything to find work during the last 4 weeks?
> >
> >For those who say "yes," the next question is:
> >
> >10. What are all of the things you have done to find work during the
> last 4
> >weeks?
> >
> >If an active method of looking for work, such as those listed at the
> >beginning of this section, is mentioned, the following question is
> asked:
> >
> >11. LAST WEEK, could you have started a job if one had been offered?
> >
> >If there is no reason, except temporary illness, that the person
> could not
> >take a job, he/she is considered to be not only looking but also
> available
> >for work and is counted as unemployed.
> >
> >
> >Who is not in the labor force?
> >
> >Persons under 16 years of age are automatically excluded from the
> official
> >labor force measurements, as are all inmates of institutions and
> persons on
> >active duty in the Armed forces. All other members of the civilian
> >noninstitutional population are eligible for inclusion in the labor
> force,
> >and those 16 and over who have a job or are actively looking for one
> are so
> >classified. All others--those who have no job and are not looking for
> >one--are counted as "not in the labor force." Many who do not
> participate
> >in the labor force are going to school or are retired. Family
> >responsibilities keep others out of the labor force. Still others
> have a
> >physical or mental disability which prevents them from participating
> in
> >labor force activities.
> >
> >A series of questions is asked each month of persons not in the labor
> force
> >to obtain information about their desire for work, the reasons why
> they had
> >not looked for work in the last 4 weeks, their prior job search, and
> their
> >availability for work. These questions include:
> >
> >1. Do you currently want a job, either full or part time?
> >2. What is the main reason you were not looking for work during the
> LAST 4
> >WEEKS?
> >3. Did you look for work at any time during the last 12 months?
> >4. LAST WEEK, could you have started a job if one had been offered?
> >
> >
> >These questions form the basis for estimating the number of
> "discouraged
> >workers"--persons without jobs who are not currently looking for work
> (and,
> >therefore, are not counted among the unemployed) but who,
> nevertheless,
> >have demonstrated some degree of labor force attachment.
> Specifically, to
> >be classified as discouraged workers, individuals must indicate that
> they
> >currently want a job, have looked for work in the last 12 months (or
> since
> >they last worked, if they had worked sometime in the last year), are
> >available for work, and that they are not currently looking for work
> either
> >because they believe that no work is available in their line of work
> or
> >area, they had previously been unable to find work, they lack
> necessary
> >schooling, training, skills or experience, employers think they are
> too
> >young or old, or they face some other type of discrimination.
> >
> >Additional questions about persons not in the labor force are asked
> of each
> >household during the last month of its 4-month tenure in the sample
> >rotation pattern. These questions are designed to collect information
> about
> >why these people left their previous jobs, when they last worked at a
> job
> >or business, whether they intend to look for work in the near future,
> and
> >their current situation (retired, disabled, ill, in school, taking
> care of
> >house or family, or something else).
> >
> >
> >To summarize: Employed persons consist of:
> >
> >* All persons who did any work for pay or profit during the survey
> week.
> >
> >* All persons who did at least 15 hours of unpaid work in a
> >family-operated enterprise.
> >
> >* All persons who were temporarily absent from their regular jobs
> >because of illness, vacation, bad weather, industrial dispute, or
> various
> >personal reasons.
> >
> >
> >Unemployed persons are:
> >
> >
> >* All persons who did not have a job at all during the survey week,
> >made specific active efforts to find a job during the prior 4 weeks,
> and
> >were available for work (unless temporarily ill).
> >
> >* All persons who were not working and were waiting to be called back
> >to a job from which they had been temporarily laid off.
> >
> >
> >