Unemployment

HemlockGrey · Post by **HemlockGrey** » 2004-09-20 01:28am

Ok, so I've heard that unemployment is around 5.5%. So what does this mean? That 5.5% of the population is unemployed? What was it in the Clinton era, and is it affected by population growth? People say that Bush has lost net jobs; how is that if the percentage of unemployed has stayed about the same since the Clinton era (which I've heard in numerous places)? Basically, can someone explain this stuff to me?

phongn · Post by **phongn** » 2004-09-20 09:00am

It means that 5.5% of the population do not have jobs but are actively looking for one and can work.

Elfdart · Post by **Elfdart** » 2004-09-20 09:52am

Oy yey!

Where to begin?

During Dubya's term, there has been a net job loss of @ one million: three million lost vs. almost two million gained -the worst performance since the Great Depression. The percentages are roughly the same now as when Clinton left office. The difference is that unemployment was a lot higher when he took office and the recessio he inherited was much worse. The most recent recession is the mildest one on record.

But that doesn't tell you everything. For example, a person loses a high-wage/ full-time job, then manages to a find a part-time job working retail at a fraction of his or her old pay rate is considered employed. If the worker takes two part-time jobs (because one doesn't pay enough) it's considered one job lost/ two gained. Now the fact that the worker in question is making less money (and fewer or no benefits) with two jobs than the one he or she had before is not counted. Unemployment figures also don't include the several million who have lost health insurance as a result of McJobs.

Just remember to start with numbers and sats, then look further.

Col. Crackpot · Post by **Col. Crackpot** » 2004-09-20 10:19am

Elfdart wrote:Oy yey! Where to begin?

During Dubya's term, there has been a net job loss of @ one million: three million lost vs. almost two million gained -the worst performance since the Great Depression. The percentages are roughly the same now as when Clinton left office. The difference is that unemployment was a lot higher when he took office and the recessio he inherited was much worse. The most recent recession is the mildest one on record.

the critical piece of data that the above snippet convieniently leaves out is that the US population at the time of the great depression was about 100 million. Currently the US population is almost 300 million. Furthermore, two income households were almost unheard of in thw 1920's-30's. Now they are not only commonplace, but the standard. So not only is the population tripled, a greater percentage of the population is in the job market. That would make that comparason pretty damn sketchy.

But that doesn't tell you everything. For example, a person loses a high-wage/ full-time job, then manages to a find a part-time job working retail at a fraction of his or her old pay rate is considered employed. If the worker takes two part-time jobs (because one doesn't pay enough) it's considered one job lost/ two gained. Now the fact that the worker in question is making less money (and fewer or no benefits) with two jobs than the ulation gone he or she had before is not counted. Unemployment figures also don't include the several million who have lost health insurance as a result of McJobs.

Like this doesn't happen in every economic downturn.

Just remember to start with numbers and sats, then look further.

Also you can always do what Elfdart has done here, take selected data out of context and season it with rhetoric.

theski · Post by **theski** » 2004-09-20 10:32am

Col. Crackpot wrote:
Elfdart wrote:Oy yey! Where to begin?

During Dubya's term, there has been a net job loss of @ one million: three million lost vs. almost two million gained -the worst performance since the Great Depression. The percentages are roughly the same now as when Clinton left office. The difference is that unemployment was a lot higher when he took office and the recessio he inherited was much worse. The most recent recession is the mildest one on record.
the critical piece of data that the above snippet convieniently leaves out is that the US population at the time of the great depression was about 100 million. Currently the US population is almost 300 million. Furthermore, two income households were almost unheard of in thw 1920's-30's. Now they are not only commonplace, but the standard. So not only is the population tripled, a greater percentage of the population is in the job market. That would make that comparason pretty damn sketchy.

But that doesn't tell you everything. For example, a person loses a high-wage/ full-time job, then manages to a find a part-time job working retail at a fraction of his or her old pay rate is considered employed. If the worker takes two part-time jobs (because one doesn't pay enough) it's considered one job lost/ two gained. Now the fact that the worker in question is making less money (and fewer or no benefits) with two jobs than the ulation gone he or she had before is not counted. Unemployment figures also don't include the several million who have lost health insurance as a result of McJobs.
Like this doesn't happen in every economic downturn.

Just remember to start with numbers and sats, then look further.
Also you can always do what Elfdart has done here, take selected data out of context and season it with rhetoric.

and Adding the Dot com bubble bursting and 911..

Quote tags fixed-Bean

Col. Crackpot · Post by **Col. Crackpot** » 2004-09-20 12:55pm

whoa theski, thaose quote tags are fubar'd worse than mine were.

Elfdart · Post by **Elfdart** » 2004-09-20 12:57pm

I don't think the comparison is sketchy at all, since it has more to with comparing Dubya's record to Clinton's (the subject of this thread) than Bush's compared to Hoover's. Saying the Great Depression was worse than the unemployment rate alone indicates, belongs in the "No Shit Sherlock" file.

The "service sector" jobs being lost now were supposedly a consolation prize to those who got screwed by the deindustrialization of the 1980s. Now what do they do? This is VERY different from the 1959-1960 recession (a worse recession, by the way), when people had manufacturing jobs to go back to once consumer confidence picked up.

Master of Ossus · Post by **Master of Ossus** » 2004-09-20 01:05pm

Elfdart, the point is that these trends represent a fundamental restructuring of the economy as opposed to some run-of-the-mill recession. No one has any plans for creating jobs for everyone because the economy can no longer reasonably be expected to sustain such employment opportunities.

Bugsby · Post by **Bugsby** » 2004-09-20 04:36pm

Lucky for everyone on the forum, I JUST GOT BACK from a macroeconomics lecture on EXACTLY what you asked. It's time to regurgitate my notes and learn by doing!

As of the end of August 2004, the Unemployment Rate, or URate, for America was 5.4%. This was based off of a survey conducted by the Department of Labor. They went door-to-door to 6000 households selected to demographically reflect the United States population as a whole. They ask three questions:
1. Who in your household is working?
2. Who is not working?
3. Of those not working, how many were seeking work in the last 4 weeks?
Those working are employed, E. Those not working and not looking are not part of the labor force and thus not considered at all. Those not working and looking are unemployed, U. The URate is then calculated by U/(U+E). This is at 5.4%.

There are a lot of problems with the URate, though. Here are a few that make the URate higher than it should be:
-The underground economy, i.e. people working "off-the-books" or illegally. These are likely to report themselves as unemployed because they don't want to expose their business.
- Unemployment insurance fraud. These people aren't looking for work, but say they are in order to collect unemployment insurance.
And here are a few that make the URate lower than it should be:
- Involuntary part-time workers. People who are out of a job but are doing some part-time work to make ends meet. Although they are "employed," they are still looking for a job. There were 4.6 million of these "half-employed" last August.
-Discouraged workers. These are workers who are not working and would like a job, but are convinced that they will not find one in the current job market, so they aren't even bothering to look until they hear about an upturn in the economy. These are usually people who have been looking for work for a long time and have given up hope. In August, there were 4.8 million of these.

Far and away, the factors that make the URate lower than the actual outweigh the factors that make it larger than the actual. The URate is set at 5.4%, but the actual amount of unemployed is about twice that. However, the URate is oficially at a pretty low 5.4%, and Republicans use this stat to try and show how good Bush is.

There are other ways to figure out unemployment, though. One way is to ask corporations how many people are on their payrolls. A survey is conducted every month of 160,000 businesses to come up with an idea of how many people in the country are working. However, as corporations continue to fire employees only to rehire them as consultants, this number gets skewed. Corporations use consultants to avoid training and benefits costs, and at the same time these people go off the payrolls. Therefore, this large group of people who are employed gets listed as unemployed by the payroll survey. Democrats use payroll survey numbers to come up with their "biggest job loss since Hoover" stat.

The most accurate measure of unemployment is the employment-population ratio. This is simply the number of people employed (as reported by the household survey) divided by US population. While the number it gives isn't as snappy and easy-to understand as the URate, it is a much better indicator of unemployment in America. Because it is not an easy-to-understand number, you never see it in the media. This is a shame because it means the only things on TV and in the paper are horribly misleading numbers, skewed in both directions, that pundits can throw back and forth at each other. The result of comparative emp-pop ratios between the beginning of the Bush administration and now? There has been a net loss in jobs, but not nearly as large as the one suggested by the payroll survey. So Bush = bad, but not AS bad as the Dems are trying to make him look.

I know that was long, but that's everything you need to know about URates. Or at least all I know at this point. Hope you are informed.

Singular Quartet · Post by **Singular Quartet** » 2004-09-20 04:59pm

Thanks, Bugsby. Now it all makes sense.

Why didn't you add in the employment/population ratio?

Elfdart · Post by **Elfdart** » 2004-09-20 08:05pm

I forgot your first point, Crackpot. Damn! Ever since the Census Bureau started collecting unemployment data in 1929, it referred to ALL U.S. residents age 14 and up. In 1933, the unemployment rate hit the all-time high of 24.9%. In 1948 the Bureau of Labor Statistics was ordered to keep tabs on unemployment. The figures given for every survey are for ALL residents age 16 and up. So your whole point about women in the workforce skewing things is bullshit. So is the notion that an increase in total population would change unemployment rates.

Here's how the most recent figure of 5.4% for August of this year compares to unemployment rates of Augusts in the past:

2000: 4.1%
1996: 5.1%
1992: 7.6%
1988: 5.6%
1984: 7.5%
1980: 7.7%
1976: 7.8%

Bugsby · Post by **Bugsby** » 2004-09-20 08:39pm

Singular Quartet wrote:Thanks, Bugsby. Now it all makes sense.

Why didn't you add in the employment/population ratio?

Cuz the professor didn't give it in the lecture. Also, it wouldn't make too much sense to us. Because it compares to total population, even retired people and infants would be in the equation! So the number itself doesn't mean too much, especially considering the major demographic swings that happen over time. emp-pop ration is a comparative thing. Sudden drops and rises indicate major swings in the employment rate. I haven't learned enough to successfully analye emp-pop yet. I'll get back to you when I do...

Post by **Beowulf** » 2004-09-20 09:25pm

Elfdart wrote:I forgot your first point, Crackpot. Damn! Ever since the Census Bureau started collecting unemployment data in 1929, it referred to ALL U.S. residents age 14 and up. In 1933, the unemployment rate hit the all-time high of 24.9%. In 1948 the Bureau of Labor Statistics was ordered to keep tabs on unemployment. The figures given for every survey are for ALL residents age 16 and up. So your whole point about women in the workforce skewing things is bullshit. So is the notion that an increase in total population would change unemployment rates.

Here's how the most recent figure of 5.4% for August of this year compares to unemployment rates of Augusts in the past:

2000: 4.1%
1996: 5.1%
1992: 7.6%
1988: 5.6%
1984: 7.5%
1980: 7.7%
1976: 7.8%

Nice of you to show that unemployment is at a lower than average level...

Durandal · Post by **Durandal** » 2004-09-20 09:40pm

So lemme get this straight ... as long as unemployment is lower than the average rate of the past 30 years, it's okay? Are you unfamiliar with the concept of a rate of change?

tharkûn · Post by **tharkûn** » 2004-09-20 10:03pm

Ok, so I've heard that unemployment is around 5.5%. So what does this mean? That 5.5% of the population is unemployed? What was it in the Clinton era, and is it affected by population growth? People say that Bush has lost net jobs; how is that if the percentage of unemployed has stayed about the same since the Clinton era (which I've heard in numerous places)? Basically, can someone explain this stuff to me?

Depends on when in the Clinton era one looks, but average was 5.2 (but do remember Clintons big numbers came back in in 1993-1996).

It is theoretically not affected by population growth, however as the demographics change you end up with changes in the supply and demand curves of the labor market. For instance as the boomers retire, the workers won't be replaced in as great of quantity as they exit, so other things equal that demographic change should lead to lower unemployment.

Net job loss is inflated by population growth, comparing Bush to Hoover is a bit far fetched because of many times more jobs total exist today.

The long and the short of it is you have several factors coming to bear:
1. The dot-bomb bubble lead to artificially low unemployment.
2. 9-11 but a damper on several industries (i.e. tourism and air travel) that had multiplier effects.
3. The comparative wages of workers in the US keep increasing compared to those overseas.
4. Technology continues to mechanize work and result in lower manpower requirements.

Job loss began under Clinton, and that shouldn't be surprising giving how flaming hot the US economy was running. The majority of the jobs were lost within 6 weeks of 9/11, and unemployment troughed a while back. Frankly given the wage disparity, it is a bloody miracle that jobs aren't fleeing in droves, though I give no credit to Bush for that.

So lemme get this straight ... as long as unemployment is lower than the average rate of the past 30 years, it's okay? Are you unfamiliar with the concept of a rate of change?

Right now the US economy is better employed that it was during the 70s or 80s and is slightly better than 1995 and slightly worse than 1996, though that will change shortly if trends continue.

50% of the time the economy has to be below average, and the only truly aggregious measurements come from BS peak to trough measurements, differing statistical measures, or not correcting for population growth.

The honest truth is that the last 4 years haven't been particularly bad, but they haven't been particularly good. When compared to the single best economic boom in the 20th century, things do look bad ... but comparing to global peaks is lousy statistics.

Post by **Beowulf** » 2004-09-20 10:03pm

Durandal wrote:So lemme get this straight ... as long as unemployment is lower than the average rate of the past 30 years, it's okay? Are you unfamiliar with the concept of a rate of change?

hmm... that seems to a rather sparse data set he provided. Pretty much all you can do is look at the damn average. If it were for every August, not just every 4th August, maybe we could extract some more useful data out of it. As it stands now, it merely proves "There's lies, there's damn lies, and then there's statistics."

Durandal · Post by **Durandal** » 2004-09-20 10:07pm

Beowulf wrote:
Durandal wrote:So lemme get this straight ... as long as unemployment is lower than the average rate of the past 30 years, it's okay? Are you unfamiliar with the concept of a rate of change?
hmm... that seems to a rather sparse data set he provided. Pretty much all you can do is look at the damn average. If it were for every August, not just every 4th August, maybe we could extract some more useful data out of it. As it stands now, it merely proves "There's lies, there's damn lies, and then there's statistics."

No, we can extract a rate of change over every four years. And the unemployment rate has gone up over the past four years. Deal with it.

tharkûn · Post by **tharkûn** » 2004-09-20 10:15pm

Here is the average yearly unemployment rate for a few decades, note that bush is not just better than average, but just how bad everything else is in comparison:
2000 3.975
1999 4.217
1998 4.500
1997 4.942
1996 5.408
1995 5.592
1994 6.100
1993 6.908
1992 7.492
1991 6.850
1990 5.617
1989 5.258
1988 5.492
1987 6.175
1986 7.000
1985 7.192
1984 7.508
1983 9.600
1982 9.708
1981 7.617
1980 7.175
1979 5.850
1978 6.067
1977 7.050
1976 7.700
1975 8.475

There are a whole crapload of other important numbers, like say inflation rates, that are important to get into when talking about economic health, but the truth of the matter is Bush is at worst enjoying a midling economy.

tharkûn · Post by **tharkûn** » 2004-09-20 10:20pm

No, we can extract a rate of change over every four years. And the unemployment rate has gone up over the past four years. Deal with it.

Yes the economy is a chaotic periodic system, it would be utterly astounding if there weren't increases in unemployment rates over some four year spans.

Comparing peak to trough is BS unless you correct for externalities (like say WWII, the Arab oil embargo, 9/11, etc.) and the inherent periodicity of the labor market, particularly considering employment is a lagging indicator.

Proper analysis needs a long baseline and comparison against an even longer set of historical data.

Gil Hamilton · Post by **Gil Hamilton** » 2004-09-20 10:28pm

A question, Tharkun. I assume you know that someone is counted as "employed" if they government is aware that they have worked one hour a month (not week). Could you provide us with data on the average hours worked per week/month for the last twenty years and also provide dollars per hour paid? That would be a big help.

tharkûn · Post by **tharkûn** » 2004-09-20 11:31pm

A question, Tharkun. I assume you know that someone is counted as "employed" if they government is aware that they have worked one hour a month (not week). Could you provide us with data on the average hours worked per week/month for the last twenty years and also provide dollars per hour paid? That would be a big help.

Not with a quick google search like I did for yearly unemployment. I beleive such information is located somewhere in the bowels of the US bureau of labor statistics:

http://www.bls.gov/

Average hourly earnings should be tracked, though you have to account for salary employees and the dollar figures might need adjusting. Total hours is somewhere in the productivity statistics. In both of those cases I think the government only has 10 years online. Also you need to be sure that the methodology remains consistent, and remember to adjust for constant dollars and population growth when appropriate ... which is why 90% of the comparisons to the Great Depression by either side is BS.

Really you can pick any of several indicators to get a general picture of the economy; wages effect prices/inflation, hours worked goes into productivity, etc. Taking a look at a broad spectrum of indicators tends to show that while the Bush economy isn't particularly bad ... it it isn't terribly great either. The big problem facing Bush on the economy is that he followed an unsustainable boom and this "new economy" BS lead many people to beleive that the economy could only get better.

Durandal · Post by **Durandal** » 2004-09-21 12:06am

tharkûn wrote:
No, we can extract a rate of change over every four years. And the unemployment rate has gone up over the past four years. Deal with it.
Yes the economy is a chaotic periodic system, it would be utterly astounding if there weren't increases in unemployment rates over some four year spans.

No shit, Sherlock. How does this affect my statement that the unemployment rate has gone up over the past four years?

Comparing peak to trough is BS unless you correct for externalities (like say WWII, the Arab oil embargo, 9/11, etc.) and the inherent periodicity of the labor market, particularly considering employment is a lagging indicator.

No shit, Sherlock. How does this affect my statement that the unemployment rate has gone up over the past four years?

Proper analysis needs a long baseline and comparison against an even longer set of historical data.

No shit, Sherlock. How does this affect my statement that the unemployment rate has gone up over the past four years?

TrailerParkJawa · Post by **TrailerParkJawa** » 2004-09-21 12:10am

Bugsby wrote:There are a lot of problems with the URate, though. Here are a few that make the URate higher than it should be:

There is another issue I'd like to add. If your benefits run out before you find a job, then you are dropped from the list of the unemployed and no longer count in the gov't figures. Considering how badly the job market contracted there are quite few people, especially older tech workers, who cant find any work but are no longer counted.

tharkûn · Post by **tharkûn** » 2004-09-21 12:15am

How does this affect my statement that the unemployment rate has gone up over the past four years?

Mainly, your statement is a useless number that denotes absolutely jack didly squat of importance. Without a way more background the initial assumption is that it is simply normal change. If you get your kicks stating tautologies, fine by me.

Comparing the unemployment now to the one 4 years prior without looking at anyother data is meaningless. Let's do it with 8 years ago ... wait that's about even. How about 12? Oh yes it has gone down over 12 years.

Aside from showing you passed elementary arithmatic with flying colors, who gives a flying frik?