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Monthly survey
Jobless rate captures only part of pain
Friday,
August 21, 2009 3:07 AM
THE COLUMBUS DISPATCH
DispatchPolitics
Considering the number of people she knows personally who are out of work, Amy Drake had
suspected that the unemployment rate reported in recent months was too low.
"It seemed like, statistically, it should be higher than what we hear in the news," said Drake, 44, whose Columbus job in information-technology communications was eliminated in March. That's why it was both illuminating and disturbing for Drake to learn that the unemployment rate, widely used as a key economic indicator and political weapon, wouldn't include her if she hadn't looked for a job for a month. Although it's often assumed that the jobless rate includes all unemployed workers or is based on official claims for unemployment benefits, it actually comes from a monthly survey of about 60,000 households nationwide -- and it counts only those who have actively looked for work during the past four weeks. That means that when Ohio's jobless rate for July is announced today -- it was 11.1 percent in June, higher than the 9.4 percent national rate -- the extent of unemployment in the state is almost certainly much worse. In fact, an alternative government measurement suggests that the jobless rate could be double what's reported when "discouraged" job-seekers and those who have taken part-time work while looking for a full-time job are included. Critics say the official unemployment rate is misleading because it leaves out too many workers who don't fit the government's definition of being unemployed. "It's like we've taken out some of the problem people and swept them under the carpet," said Lucia Dunn, an economics professor at Ohio State University. Still, Dunn said the rate does reflect trends in the job market, and other economists say the survey accurately does what it was designed to do: measure those 16 or older who are in the labor force, meaning those who are employed or actively looking for work. "The way I look at the number is that it is more of an indicator or barometer of what is happening in the economy, as opposed to a precise measure of how people are affected by the economy," said Keith Ewald, chief of the Labor Market Information Bureau at the Ohio Department of Job and Family Services. Added Sharon Cohany, an economist for the U.S. Bureau of Labor Statistics: "It's not that anything is being hidden; it's that the unemployment rate has a specific meaning." Every month, generally during the week that includes the 12th day of the month, the federal government conducts the Current Population Survey using a sample of about 60,000 households as representative of the entire nation. Census Bureau employees don't ask whether participants are unemployed. Rather, they ask questions such as what steps people have taken to find work during the previous four weeks. Unemployment figures at the state or county, city and metropolitan-area level are estimates, determined by using statistical models that rely on unpublished data from the Current Population Survey and other information, such as unemployment-insurance statistics. Although the official unemployment rate reported each month excludes those who have suspended job searches and others who don't fit the official definition of "unemployed," the government does collect and report that data in what it calls "alternative measures of labor underutilization." For example, although the average unemployment rate for Ohio from the third quarter of 2008 through the second quarter of this year was 8.6 percent, the rate including those not actively looking for work or working part time for economic reasons was 15.1 percent, according to federal data. At the same time the jobless rate is reported each month, data also are released from the separate monthly Current Employment Statistics survey of payrolls at about 160,000 businesses and government agencies. Economists generally rely on that survey to show how many jobs were added or lost in different sectors of the economy. Who's employed and who's notEach month, the government releases the unemployment rate based on a survey of about 60,000 households during the week that includes the 12th day of the month. The survey uses these definitions of who is employed or unemployed: Employed• All people who did any work for pay or profit, full or part time, during the survey week. • All people who did at least 15 hours of unpaid work in a family-operated enterprise. • All people who were temporarily absent from their regular jobs because of illness, vacation, bad weather, workplace strike or various personal reasons, whether or not they were paid for the time off. Unemployed• All people who did not have a job at all during the survey week, made specific active efforts to find a job during the previous four weeks and were available for work unless temporarily ill. (Actively looking for work might consist of contacting an employer or others directly or having a job interview, sending out resumes or filling out applications, placing or answering job ads, checking union or professional registers, or some other means of active job search.) • All people who were not working and were waiting to be called back to a job from which they had been laid off (they need not be looking for work to be classified as unemployed). Not counted• Anyone considered not to be in the labor force. That includes "discouraged workers" -- those who don't have a job and haven't actively looked for one during the preceding four weeks -- volunteer workers and those unable to work. The unemployment rate is the number of unemployed divided by the labor force. Sources: U.S. Bureau of Labor Statistics; Ohio Bureau of Labor Market Information Story toolsToday’s Top Stories
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