Not much of a silver lining in unemployment numbers

The headlines are screaming about how the US has lost the most jobs since World War II. What this fails to account for is that the population and, however you measure it, the labor force is far larger now than in 1945. The Financial Times reports, “The number of jobs lost during the year reached 2.6m, while the unemployment rate – 4.4 per cent before the credit crisis – jumped to 7.2 per cent in December, its highest level in 16 years.” Historically, the percentages look low.

But I distrust the reckoning of who qualifies as being a part of the labor force; the Bureau of Labor Statistics excludes so-called “discouraged workers,” who are no longer actively seeking work. It also includes part-time workers as fully employed, which I do not correct for here. Nor does it make any compensation for people who are having to work multiple jobs to make ends meet or for decreased wages as better-paying jobs have been exported overseas; these are other areas also not covered in my analysis.

This means the pain is far worse than appears in my reckoning. The numbers I find most interesting are the percentage of change, especially in the portion of the population that is excluded from the job market, i.e. the very measure that affects all the percentages reported by the Bureau of Labor Statistics which deceive by omission. While there are a number of shortcomings in my approach, what I want most desperately is a measure of the need for employment or of the people who would work if they had the opportunity. Lacking this, I do not correct for it at all, and thus omit ideological distortions.

Percent Change in Unemployed (blue) and Excluded (red) Persons:

Percent Change in Excluded Persons:

Percent of Civilian Non-institutionalized Population Employed:

So how do the numbers hold up in my parsing? The civilian non-institutionalized population increased by 0.088% in December, and 0.504% in all of 2008. The fraction included in the job market increased 0.269% to 65.99% for the year, or about half of population growth, and dropped 0.112% to 65.71% in December. The employed portion of the population dropped by 0.559% to 60.99% in December, and 0.653% to 62.18% in 2008, which is certainly bad, but nowhere near as bad as in the years 2002-2005; the drop was 3.583% in 2004. Unemployment increased 6.033% to 4.73% in December, and 18.120% to 3.82% for 2008; the comparable number for 1991 was 22.435%. Finally, the fraction excluded from the labor force increased by 0.474% in December, and 0.961% in all of 2008; as recently as 1999, the comparable figure was 1.241%.

Make no mistake: 2008 was a bad year, and December was a bad month, but strictly in terms of employment losses, I don’t see it as being the worst since World War II. In terms of overall employment, we remain above the level in 1986. But worse is surely yet to come.

Author: benfell

David Benfell holds a Ph.D. in Human Science from Saybrook University. He earned a M.A. in Speech Communication from CSU East Bay in 2009 and has studied at California Institute of Integral Studies. He is an anarchist, a vegetarian ecofeminist, a naturist, and a Taoist.

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