Why do we track unemployment?

[corn18]

Seems we would be better off tracking employment.



If 42% of the population is not working, why is the unemployment rate only 7%? That makes no sense to me. And if 42% of the population isn't working, what are they doing?

Interesting how the rate of employment has dropped like a rock since 2008.

Tom

[disneysteve]

I wonder what that graph is based on. Is it just the population that wants to be working or is it the entire adult population? For example, does it count retirees? That could explain why the number is so high.

The whole way they calculate the unemployment rate is pretty questionable anyway.

[corn18]

I wonder what that graph is based on. Is it just the population that wants to be working or is it the entire adult population? For example, does it count retirees? That could explain why the number is so high.

The whole way they calculate the unemployment rate is pretty questionable anyway.

This is the definintion of Employment Ratio:

Employment consists of all persons who, during the reference week (the calendar week including the twelfth day of the month), (a) did any work at all (at least 1 hour) as paid employees, worked in their own business or profession or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family, or (b) were not working but had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs.... The civilian noninstitutional population consists of persons 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions (for example, penal and mental facilities and homes for the aged) and who are not on active duty in the Armed Forces.

So it includes the whole population. Here's the employment rate broken down by age:



I would say this supports your theory on more retirees.

So, let's look at the real working segment of 25-54 yo. This means out of college and not retired.



So it looks the same but at a higher participation rate. So, this indicates 25% of 25-54 yo are not working. Again, what are they doing?

[snafu]

As your graph shows, farm workers are categorized differently than hourly rated or salaried workers. The unemployment rate focuses on those workers eligible for and collecting unemployment benefits. A huge segment of the population have used up all their benefits and are no longer eligible. A segment has not worked sufficient weeks or earned sufficient sums to qualify for benefits. So many workers work 'off the grid,' not counted, by anyone. A great many people are 'under employed' not working as trained/educated/experienced.

The USA is doing great compared to other countries, Spain, 35% unemployment, 75% for new graduates.

[hamchan]

I would imagine that many of those not working and not looking for work are staying at home with kids.

[bjl584]

There are lies. There are damn lies. Then there are statistics.

[ua_guy]

There are lies. There are damn lies. Then there are statistics.

LOL. Exactly. The question isn't "what IS the unemployment rate". It's "What would you like the unemployment rate to be?"

Unemployment isn't the canary in the coal mine that it once was. Now it's a snapping poodle that we like to throw in the laps of politicians.

[humandraydel]

I would imagine that many of those not working and not looking for work are staying at home with kids.

This. So if they aren't looking for work, they aren't "unemployed" - that's why people say that the REAL unemployment rate is higher because some people WANT work but stopped looking so they aren't counted.

[Williamschmit]

The lack of employment rate concentrates on those workers qualified for and gathering lack of employment advantages. A huge section of the inhabitants have used up all their advantages and are no longer qualified. A section has not worked adequate or gained adequate amounts to be eligible for getting the best benefits in employment.

[FrugalFish]

Years ago DH was unemployed for an extended period of time (it's a long story). For the first 6 months he was eligible for UE insurance benefits. During that time he had to report weekly to the state with a documented list of employers to which he had applied or no benefits would be paid. During this time he was counted in the unemployed. After 6 months, his benefits ran out- do you think he continued to report his activity to the state after that time? Of course not, why would he? And, as far as the state was concerned, they were done with him. At 6 months he was dropped off the roles, to no longer be counted, and was no longer considered "unemployed."

I think regularly about how many people currently fall into that category of limbo- not counted, but out there every day trying to find work. I wonder (sarcastically) if one of the most beneficial things the gov't did for the nations UE rate was to put an end to what became a seemingly ongoing extension of benefits. Sure you still don't have a job, but the gov't no longer acknowledges you as unemployed, no matter how you think of yourself. All a political numbers game.

[Weird Tolkienish Figure]

Seems we would be better off tracking employment.



If 42% of the population is not working, why is the unemployment rate only 7%? That makes no sense to me. And if 42% of the population isn't working, what are they doing?

Interesting how the rate of employment has dropped like a rock since 2008.

Tom

Complicated question with complicated answers.

One answer is that baby boomers are most likely retiring (not all, but many/most/some are).

Plus the economy is indeed much softer now.

There's no "one answer" to any of these problems.

[riverwed070707]

Seeing lots of issue with reporting this information. For 1, you see a huge indication of whats different when you break down by age... lots more young people not working which I think is unsurprising given recent trends for kids to drive later, stay at home longer, etc. Additionally, reporting this way can't account for population shifts. Also as a pp pointed out, its an irrelevant indicator of the job market if 25% of the population isn't working if those people don't wish to work -- if they aren't seeking employment then there isn't a lack of a job. I think the numbers are a lot less shocking when you look at the primary working population - sure the arrows make it look like a drastic gain and drop but its only a 10% gain and 5% drop overall which could be due to a lot of factors not having to do with jobs being unavailable. Interesting info but I don't see how its an economic indicator.

[herdjohnson]

Years ago DH was unemployed for an extended period of time (it's a long story). For the first 6 months he was eligible for UE insurance benefits. During that time he had to report weekly to the state with a documented list of employers to which he had applied or no benefits would be paid. During this time he was counted in the unemployed. After 6 months, his benefits ran out- do you think he continued to report his activity to the state after that time? Of course not, why would he? And, as far as the state was concerned, they were done with him. At 6 months he was dropped off the roles, to no longer be counted, and was no longer considered "unemployed."

I think regularly about how many people currently fall into that category of limbo- not counted, but out there every day trying to find work. I wonder (sarcastically) if one of the most beneficial things the gov't did for the nations UE rate was to put an end to what became a seemingly ongoing extension of benefits. Sure you still don't have a job, but the gov't no longer acknowledges you as unemployed, no matter how you think of yourself. All a political numbers game.

The govt doesn't use the number of people on unemployment benefits to calculate the unemployment rate. The Current Population Survey is a survey of over 100k people that is done monthly and used for most of the data in the BLS report.

[Weird Tolkienish Figure]

The govt doesn't use the number of people on unemployment benefits to calculate the unemployment rate. The Current Population Survey is a survey of over 100k people that is done monthly and used for most of the data in the BLS report.

Yep, that is a big misconception. Unemployment rolls, monthy job employer surveys (the number of jobs created/lost each month), and unemployment are three very different measures using different methodology.

[Michael Thompson]

it is a big lie. There is much difference between real and the figures by the survey.