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The HISTORY Of UNEMPLOYEMENT STATS

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    The HISTORY Of UNEMPLOYEMENT STATS

    December 3, 2010

    The main measure of employment in the United States is the Current Population Survey conducted monthly by the federal Bureau of Labor Statistics. In a March 5, 2008 column in The New York Times, excerpted below, David Leonhardt described the birth of the survey, and its major shortcoming:

    In 1878, Carroll D. Wright set out to do something that nobody in the United States had apparently ever done before. He tried to count the number of unemployed.

    As is the case today, the 1870s were a time of economic anxiety, with a financial crisis -- the panic of 1873 -- having spread into the broader economy. But Wright, then the chief of the Massachusetts Bureau of the Statistics of Labor, thought there weren't nearly as many people out of work as commonly believed. He lamented the "industrial hypochondria" then making the rounds, and to combat it, he created the first survey of unemployment.

    The survey asked town assessors to estimate the number of local people out of work. Wright, however, added a crucial qualification. He wanted the assessors to count only adult men who "really want employment," according to the historian Alexander Keyssar. By doing this, Wright said he understood that he was excluding a large number of men who would have liked to work if they could have found a job that paid as much as they had been earning before.

    Just as Wright hoped, his results were encouraging. Officially, there were only 22,000 unemployed in Massachusetts, less than one-tenth as many as one widely circulated (and patently wrong) guess had suggested. Wright announced that his "intelligent canvas" had proven the "croakers" wrong. From Massachusetts, he went to Washington, where he served as the inaugural director of the federal government's Bureau of Labor Statistics and later as the head of the United States Census. His method for counting -- and not counting -- the unemployed became the basis for Census tallies of the jobless and, eventually, for the monthly employment report put out by the Bureau of Labor Statistics.

    ...

    Over the last few decades, there has been an enormous increase in the number of people who fall into the no man's land of the labor market that Carroll Wright created 130 years ago. These people are not employed, but they also don't fit the government's definition of the unemployed -- those who "do not have a job, have actively looked for work in the prior four weeks, and are currently available for work."

    ...

    There are only two possible explanations for this bizarre combination of a falling employment rate and a falling unemployment rate. The first is that there has been a big increase in the number of people not working purely by their own choice. You can think of them as the self-unemployed. They include retirees, as well as stay-at-home parents, people caring for aging parents and others doing unpaid work.

    The second possible explanation -- a jump in the number of people who aren't working, who aren't actively looking but who would, in fact, like to find a good job -- is less comforting. It also appears to be the more accurate explanation.

    ...

    There is no doubt that the unemployment rate is a less telling measure than it once was. It's simply no longer the best barometer of the country's economic health. A truer picture can be found elsewhere, by looking at compensation growth, for instance, or to changes in the percentage of the employed.

    No less than Tom Nardone, the economist overseeing the unemployment survey, made a similar point. "Just saying the unemployment rate is 5 percent, without any other context, really doesn?t tell you much," Mr. Nardone said.

    News about Unemployment, including commentary and archival articles published in The New York Times.
    Last edited by Flamingo; 12-03-2010, 05:51 PM. Reason: To conform to forum posting rules
    8/4/2008 MAKE SURE AND VISIT Tobee's Blogs! http://www.bkforum.com/blog.php?32727-tobee43 and all are welcome to bk forum's Florida State Questions and Answers on BK http://www.bkforum.com/group.php?groupid=9

    #2
    There are only two possible explanations for this bizarre combination of a falling employment rate and a falling unemployment rate. The first is that there has been a big increase in the number of people not working purely by their own choice. You can think of them as the self-unemployed. They include retirees, as well as stay-at-home parents, people caring for aging parents and others doing unpaid work.

    The second possible explanation -- a jump in the number of people who aren't working, who aren't actively looking but who would, in fact, like to find a good job -- is less comforting. It also appears to be the more accurate explanation.
    Problem is the above statement is wrong. U-6 includes all the above groups. This article, which is two years old btw, is typical of the shoddy journalism from the NYT - an editorial article that failed to explain the facts correctly by a journalist who should know better. The original editorial from March 2008 is here:

    http://www.nytimes.com/2008/03/05/bu...ardt.html?_r=1

    Note in the original article the reporter briefly mentions the BLS "alternate measures of joblessness" and then dismisses them without explanation. Why? Because pointing out that the U-6 corrects all his complaints would have made the entire point of his article laughable. It's called deception and misinformation. And here is the NYT bringing back the NYT article today, but omitting the above quote of course. More deceptive politics from the business press.

    From the original article:
    I’m not suggesting that the government change its definition of the unemployment rate after all these years. (The government has tried to come up with various alternate measures of joblessness, which are broader but not especially useful.) I’m also not suggesting that the Bureau of Labor Statistics somehow cooks the books. Both Republican and Democratic economists praise the bureau as a model of professional nonpartisanship.
    Why are they "not especially useful"? Because they would destroy his partisan editorial?

    The BLS definition of U-6, which is regularly quoted along with U-3:
    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.
    NOTE:
    Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule. Updated population controls are introduced annually with the release of January data.
    The CPS survey is now starting to ask for persons who currently are neither working nor looking for work but who have looked for work in the last 36 months, and include them in the U-6. Discouraged workers already have no time limit on how long they have been discouraged from looking for a job. The U-6 includes all of these long-term unemployed, and is now commonly reported by the financial press along with the more restrictive U-3 definition.

    The November unemployment numbers, U-1 thru U-6 are reported here:

    http://www.bls.gov/news.release/empsit.t15.htm

    Looks like I have to repeat this stuff every month, for the slow learners...
    Last edited by WhatMoney; 12-03-2010, 04:52 PM.
    “When fascism comes to America, it’ll be wrapped in a flag and carrying a cross” — Sinclair Lewis

    Comment


      #3
      Originally posted by WhatMoney View Post
      Problem is the above statement is wrong. U-6 includes all the above groups. This article, which is two years old btw, is typical of the shoddy journalism from the NYT - an editorial article that failed to explain the facts correctly by a journalist who should know better. The original editorial from March 2008 is here:

      http://www.nytimes.com/2008/03/05/bu...ardt.html?_r=1

      Note in the original article the reporter briefly mentions the BLS "alternate measures of joblessness" and then dismisses them without explanation. Why? Because pointing out that the U-6 corrects all his complaints would have made the entire point of his article laughable. It's called deception and misinformation. And here is the NYT bringing back the NYT article today, but omitting the above quote of course. More deceptive politics from the business press.

      From the original article:

      Why are they "not especially useful"? Because they would destroy his partisan editorial?

      The BLS definition of U-6, which is regularly quoted along with U-3:

      The CPS survey is now starting to ask for persons who currently are neither working nor looking for work but who have looked for work in the last 36 months, and include them in the U-6. Discouraged workers already have no time limit on how long they have been discouraged from looking for a job. The U-6 includes all of these long-term unemployed, and is now commonly reported by the financial press along with the more restrictive U-3 definition.

      The November unemployment numbers, U-1 thru U-6 are reported here:

      http://www.bls.gov/news.release/empsit.t15.htm

      Looks like I have to repeat this stuff every month, for the slow learners...
      yes, the article is in fact two years old as stated in the first sentence...however, this was taken from the ny times today...perhaps just a "reminder" to know why or how the country began keeping records or attempting to keep records on the unemployed...i understand you most likely prefer rolling stone to the nytimes....but the times has been my go to paper just because i was "required" to read it for my job for many years and although, not always agreeing with what they publish, it was better than the star ledger...

      actually, we are only told what THEY want us to know. u know that one!
      8/4/2008 MAKE SURE AND VISIT Tobee's Blogs! http://www.bkforum.com/blog.php?32727-tobee43 and all are welcome to bk forum's Florida State Questions and Answers on BK http://www.bkforum.com/group.php?groupid=9

      Comment


        #4
        Looks like I have to repeat this stuff every month, for the slow learners...
        i was so slow i was in college at 16......my first masters at 21...what about you??? LOL!!!

        be nice would you!
        8/4/2008 MAKE SURE AND VISIT Tobee's Blogs! http://www.bkforum.com/blog.php?32727-tobee43 and all are welcome to bk forum's Florida State Questions and Answers on BK http://www.bkforum.com/group.php?groupid=9

        Comment


          #5
          Originally posted by tobee43 View Post
          i was so slow i was in college at 16......my first masters at 21...what about you??? LOL!!!

          be nice would you!
          You may be suffering from early dementia. The inability to learn new facts is one sign, you know. Are you still 21? Didn't think so. Me neither.

          I easily could have skipped a couple grades, but my parents were wise enough to keep me in high school until age 17. I was 17 in college and it was hell the first semester not being able to get into the beer bars legally until 18 (the beer drinking age at the time.)
          Last edited by WhatMoney; 12-03-2010, 10:17 PM.
          “When fascism comes to America, it’ll be wrapped in a flag and carrying a cross” — Sinclair Lewis

          Comment


            #6
            Originally posted by WhatMoney View Post
            You may be suffering from early dementia. The inability to learn new facts is one sign, you know. Are you still 21? Didn't think so. Me neither.

            I easily could have skipped a couple grades, but my parents were wise enough to keep me in high school until age 17. I was 17 in college and it was hell the first semester not being able to get into the beer bars legally until 18 (the beer drinking age at the time.)
            yes, you may have something there....early dementia....LOL!! sorry it doesn't run in our most intelligent family....never had a beer in college...jack was my choice...and a little of what we were not suppose to have...but i was attending, in my days of youth, ..uc berkeley....so i'm sure you get the picture....my sats were off the charts...LOL!!! youngest at the time at the university...so there...

            and NO i'm not 21...but LOOK It....about you??? can't you just be sweet and intelligent as opposed to nasty and intelligent...remember you get much more with honey then vinegar....i might even enjoy our rants more. and can you PLEASE stop with the personal attacks...as endearing as they seem to you...it's no way to get a date! ROFL!!!!
            8/4/2008 MAKE SURE AND VISIT Tobee's Blogs! http://www.bkforum.com/blog.php?32727-tobee43 and all are welcome to bk forum's Florida State Questions and Answers on BK http://www.bkforum.com/group.php?groupid=9

            Comment


              #7
              Originally posted by tobee43 View Post
              yes, you may have something there....early dementia....LOL!! sorry it doesn't run in our most intelligent family....never had a beer in college...jack was my choice...and a little of what we were not suppose to have...but i was attending, in my days of youth, ..uc berkeley....so i'm sure you get the picture....my sats were off the charts...LOL!!! youngest at the time at the university...so there...

              and NO i'm not 21...but LOOK It....about you??? can't you just be sweet and intelligent as opposed to nasty and intelligent...remember you get much more with honey then vinegar....i might even enjoy our rants more. and can you PLEASE stop with the personal attacks...as endearing as they seem to you...it's no way to get a date! ROFL!!!!
              Trying to get in last word huh? I can play that game too.
              Since you claim you look like you're 21, then your claim of age discrimination shouldn't be a problem for you. Just change the dates on your resume and pass yourself off as some hot young innocent thing looking for a minimum wage job.

              I get grumpy when anyone posts misinformation, and especially when the poster claims to be intelligent enough to know better. Too bad you consider posting facts as "rants".

              PS: I am not looking for a date.
              “When fascism comes to America, it’ll be wrapped in a flag and carrying a cross” — Sinclair Lewis

              Comment

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