January 22, 2013

Official Unemployment vs Unemployment, marginal and Underemployment 1993 too 2012

How many times have you seen this kind of statement in the last few years? :  "The official unemployment rate cited by the government is 7.8% but the REAL unemployment rate is 14.4% if you include the underemployed."    Of course the underemployed and marginally attached workers are out there when the economy is good too.   When unemployment was 5% were people running around making sure we were all aware that the 'REAL' rate was 9.2%?   Not that I recall.

I pulled the numbers for a few years back off the BLS Table A-15 charts Here's a look at the official unemployment rate versus the larger rate including marginally attached and underemployed part time workers from 1994 to 2012 :

(click for larger size)


Those numbers are monthly seasonally adjusted figures for
U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate)
versus
U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force

As you can see in the chart the broader U-6 unemployment measure plus the marginally attached and underemployed workers is generally a few points higher than the simple unemployment measure.   The numbers are roughly proportional as well.    The marginal and underemployed number is around 60-80% of the unemployment number.

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6 comments:

  1. Good info.

    Some things not reflected in these numbers include: 1) discouraged workers (aged off the UE rolls after 1 yr); 2)millions of workers matriculated onto disability rolls; 3) quality of jobs (i.e. an engineer making $100K laid off now makes $70K, or a Blockbuster manager making $50K now makes $35K at a Kinko's).

    One thing I do note for myself, 10-12 years ago I had the ability (and drive) to work 50-60 hour weeks with available p/t or o/t jobs. Today, it is tough to pull 40 billable hours together in a week. Lots of reasons, but that is probably another blog post.

    Continued success to you, Jim!

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  2. JayCeezy,

    Good points to bring up.

    There are certainly many people who have dropped out of the work force. That has a number of reasons.

    I don't believe that people getting on disability programs is really much of a factor though.

    I looked at that topic in a previous article :

    http://www.freeby50.com/2012/08/2-drop-in-labor-force-participation-who.html

    Then I found that the % of population on disability hadn't grown. Yes more people are on disability but it had not gone up faster than population growth.

    You're definitely right that the statistics don't measure people going from better jobs to mediocre ones. My understanding is that the 'underemployment' measure is only people who work part time but can't get full time. So if you go from a full time senior vice president to being laid off to being a full time clerk at Home Depot then you'd be counted the same as 'employed'.


    Jim

    ReplyDelete
  3. Thanks Jim, I like the way you look at numbers dispassionately. It can be (for me) easy to get lost in the numbers, but I will always remember something my Statistics 101 teacher told us: "Every number represents a person, with a story and circumstance. Don't let anyone tell you 'it's just a statistic' because the statistic represents people." Good to remember.

    There are some numbers a little more recent that you might find of interest, discussed here.

    But the money quote is this...

    ...in January 2009, there were 142,187,000 people actually working and 7,442,377 workers collecting disability—a ratio of about 19 to 1.

    In June, there were 142,415,000 people actually working and 8,733,461 workers claiming disability—a ratio of about 16 to 1.


    As interesting as the data is, my Stats teacher also told us this: "Employment is binary. You are either employed, or unemployed, and it is up to you to get and keep a job." I am seeing interesting cases all around my circle of acquaintances and friends. People are looking for a way out of a frustrating employment situation, and I have seen people get on disability for alcoholism, soft-tissue back injury for a daily golfer who still golfs, and Adult ADHD. Seems sketchy to me, if there were good choices for these people I'm sure they wouldn't take this route.

    Anyway, really like your blog and especially your You Might Also Like choices for us readers. Thanks!

    ReplyDelete
    Replies
    1. Oops, should read "In June 2012..."

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  4. Sorry to bump this late, but here is some additional recent info on SSDI that interested parties might care to know...

    The money quote: "Over the past 10 years, the number of applications for new SSDI benefits rose by 92 percent, from 1.5 million in 2001 to 2.9 million in 2011."

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  5. JayCeezy,

    Yes there has been high growth in disabled roles. However thats not a new trend.

    In this previous article you can see the # of people on disability had been growing steadily from around 1990 onwards:

    http://www.freeby50.com/2012/09/social-security-disability.html

    This was an existing trend before the 2007 recession and not a result of it.

    Not sure why the rate has been growing so fast but I suspect a big part of it is an aging population. Most of the disabled people are >50 years old and a lot are >60. So as the baby boomers age into those age brackets the # of disabled will grow too.

    Jim

    p.s. I thought I already made a comment like this but I don't see it.

    ReplyDelete

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