Is there an actual definition for being employed?
MORE FROM:
JOHN CRUDELE
The Labor Department has determined that 151 million people in the US have jobs. And that the unemployment rate is 5 percent.
You might be impressed by that until you look at who the government considers “employed” and how difficult it is to actually be “unemployed.”
This is going to get a little confusing, so hold onto your seats. But let me start by saying that the Obama administration didn’t set this policy. Both parties have enjoyed a mushy description of joblessness for decades.
According to the definition of “employed” in the Current Population Survey — used to calculate the unemployment rate, which held steady at 5 percent in last Friday’s announcement of the April report — someone is working if that person “did any work at all (at least one hour) as a paid employee.” One freakin’ hour in a month, and you are considered employed!
By this standard, people could claim to be employed if they were asked by a neighbor to take a dog on a long walk and were given a few bucks for the effort.
But there’s more. People could also legitimately say they were employed if they “worked in their own business, profession or on their family farm,” according to the Labor Department standards.
So, all those people who have been laid off and formed consulting businesses in their back rooms can claim to be employed if they charged a client for one phone call.
It’s unclear if they even need to have been paid.
And, remember, nobody checks any claim of having a job. The Current Population Survey, also known as the Household Survey, is conducted by the Census Bureau. People are taken at their word; they aren’t interrogated about truthfulness.
And, I suppose, it’s only human nature to lie if you are unemployed and embarrassed about it. “Sure, I worked last month. Ya’ think I’m a bum or something?” might be my response to nosey Census workers.
But the definition of being “employed” gets even squishier the farther down you get in the Labor Department’s explanation. People, for instance, are considered employed if they “worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family.”
Wow, so if your Uncle Lou asks you to sweep out his body shop but he couldn’t pay you for that service, you can still claim to be employed. “Yeah, I got a job. What’s it to you?”
Let me step back a bit.
Let me step back a bit.
The nation’s unemployment rate is calculated by monthly surveys of some 60,000 households taken for the Labor Department by the Census Bureau. Projections for the entire nation are made based on those interviews.
The Labor Department’s U-6 unemployment rate, which includes the unemployed plus people who want full-time jobs but can only find part-time work (plus some others), was 9.7 percent in April.
And the U-6 rate doesn’t include people who have totally given up looking for jobs because they don’t think there is any work available. It’s anyone’s guess how high the unemployment rate would jump when these “discouraged workers” are included, but I’ve seen estimates of over 20 percent.
But let’s get back to the simplest unemployment rate — the one called U-3. That’s the one at 5 percent that is making some politicians giddy and newspapers like the New York Times confused because it doesn’t jibe with other data that show the economy is extremely weak.
I argue that the Labor Department steers people toward the lower U-3 rate because that’s the one at the beginning of the monthly press release. The higher U-6 number is contained in the tables that can only be accessed from the Web site.
As I just said, the likely 20 percent unemployment rate that includes discouraged workers can’t be found anywhere on the Labor Department’s site. As far as Washington is concerned, these completely discouraged workers are no longer in the workforce.
There’s some honesty in the numbers as well. Nobody can be unemployed twice — even if that person is out of work from two jobs. And people can’t be considered unemployed if their “only activity” from which they aren’t working is “activity consist[ing] of work around their own house or volunteer work for religious, charitable and other organizations.”
That part makes sense. You can’t claim to be unemployed if you were working at a soup kitchen without pay and you were suddenly told not to show up anymore because you lacked ladling skills.
Two last things.
While the government was reporting an anemic growth of 160,000 jobs in April from the survey it takes of 60,000 businesses — called the Establishment Survey (see my column last Saturday for details) — the survey that goes into the unemployment rate calculations was reporting a loss of 316,000 jobs.
One survey showed a growth of 160,000 jobs. The other showed a loss of 316,000. Guess which one was highlighted in the press release and which one was in the tables and required you to do calculations?
So, do 151 million people really have jobs? You tell me.
No comments:
Post a Comment