The Unemployment Picture – The Big Picture

Sorry about posting this issue in two of the blogs, but this issue seemed just too important for people to miss.

At the State of the Town Meeting on Saturday December 6, 2008 a member of the audience asked if anyone in town knew the true unemployment picture for Dennis or the county if local numbers were not available. This intrigued me. During past economic downturns much had been made about the unemployment rate, the problem of under-employment and the numbers of people who had given up all hope of finding a job and had quit looking. During the current crisis, I have not seen much information in the media on this part of the economic problem. Based upon the discussion below, it would appear that the range lies somewhere between 1,286 (9.8% of those eligible to work) and 1,444 (11% of those eligible to work) people out of work or under-employed in Dennis.

The following data is the best I have been able to pull together.

First, a few definitions so that we all understand the concept and are discussing the same ideas. these are from the Bureau of Labor Statistics and can be found here.

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. California is the most populous State, with about 27.7 million persons in this category in 2007; Wyoming is the least populous State, with just over 400,000 persons.

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. Employment in 2007 ranged from 17.2 million in California down to 279,000 in Wyoming.

Unemployment consists of all persons who had no employment during the reference week, were available for work, except for temporary illness, and had made specific efforts to find employment some time during the 4-week period ending with the reference week. Persons who were waiting to be recalled to a job from which they had been laid off need not have been looking for work to be classified as unemployed. Again, the extremes in 2007 were represented by California (979,000) and Wyoming (9,000).

The civilian labor force consists of all persons classified as employed or unemployed as described above. California (18.2 million) and Wyoming (288,000) had the largest and smallest labor force levels, respectively, in 2007.

The labor force participation rate represents the proportion of the civilian noninstitutional population that is in the labor force. This measure of labor force activity grew from about 60 percent nationally in 1970 to about 67 percent in 2000, with much of the increase resulting from increased participation by women. In 2007, the participation rates ranged across states from 73.5 percent in North Dakota to 55.9 percent in West Virginia.

The employment-population ratio represents the proportion of the civilian noninstitutional population that is employed. Some analysts prefer this measure over the unemployment rate as a measure of economic activity and the economy’s performance. North Dakota and West Virginia also had the extreme employment-population ratios in 2007, 71.2 and 53.4 percent, respectively.

The unemployment rate is the number of unemployed as a percent of the civilian labor force. Unemployment rates move inversely with the business cycle, sometimes with a lag. In 2007, unemployment rates ranged from a low of 2.6 percent in Hawaii to a high of 7.2 percent in Michigan.

Getting the current unemployment rate in Dennis is fairly easy (5.2% in October 2008 according to the Executive Office of Labor and Workforce Development). Getting at what the New York Times refers to as the full picture is a bit more difficult (Grim Job Report Not Showing Full Picture, NY Times December 5, 2008).

In 2000 the Census reported that there were 13,551 people age 16 or over. Of these, 7,337 were listed as in the Labor Force (working or actively seeking work) for a Labor Force Participation Rate of 54%. The state reports that at that time (April 2000) the town also had 7,300 people employed and had a 3.7% unemployment (the U. S. Census figure would have been a full percentage point higher as 4.9%). Nationally the U.S. Census Unemployment Rate was 5.7% for Census Day. In general, the town was performing at 0.8% better than the nation.

The Census also asked, in the sample survey, a different question tied to peoples actual 1999 work experience. The question dealt with the number of hours per week people usually worked by the number of weeks they worked in 1999. Given interpretation issues with the question I am looking at the figures for people who worked 48 or more weeks during that year as employed the full year. The Census used a base of 35 hours or more per week as a full-time employee. Looking at the data, 8,158 people reported working in 1999. Of these 4,535 people reported working 35 or more hours a week for 48 or more weeks (55.6%). This number correlated to a figure of 62.1% nationally, placing our full-time work participation slightly behind the national percentage.

Taking all of the above into consideration, we can make some “best guess” estimates at the “full picture” for Dennis. In October 2008, as noted above, Dennis had an unemployment rate of 5.2% while the U.S. had an unemployment rate of 6.5%. Looking back at 2000 data, the U.S. labor Department Unemployment rate for Dennis was 3.7% and for the nation it was 3.9%. It would appear that Dennis has performed better than the national economy with our unemployment rate increasing 1.5% while the national rate increased by 2.6%. However, it would be presumptuous of us to think we have been immune from the larger employment picture. That of the people who have stopped looking for work or are under-employed.

As reported by the NY Times article cited above, the “alternate rate” for unemployment or under-employment stands at an estimated 12.5% (in November 2008 when the national unemployment rate was 6.7%). This represents 5.8% of the population 16 or older.

There are different ways to look at this for comparison to the local condition and to, at least come up with an estimated range for the town. The first would be to simply say that we exactly match the national trend, thus taking our 5.2% unemployment and adding 5.8% for “out of the labor market” or under-employed, giving us an alternate scenario of 11%. The other is to say that our relationship to the national picture is more relative, thus our 5.2% unemployment is 80% of the national unemployment rate, thus assuming we might be also 80% of the national “out of the labor market” and under-employed figure, thereby giving us an alternative rate of about 9.8%.

Taking this to the next step, estimating the actual number of people directly affected by the current economic crisis (there are still many other impacts that ripple through the economy as people lose work that go beyond these simple numbers). In 2000 the town had an estimated 13,551 people eligible to work. Total population in the town has dropped slightly according to recent estimates, from 15,973 in 2000 to 15,473 in 2007. Adjusting for the drop in population we could estimate that there are about 13,127 people in Dennis eligible to work. This results in a figure of between 1,286 and 1,444 people out of work or under-employed in Dennis.

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One thought on “The Unemployment Picture – The Big Picture

  1. Pingback: The Dennis Unemployed/Underemployed Picture « Dennis MA Economic Development

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