Unemployment. Three criteria have to be met to be considered unemployed.

Transcription

1 Unemployment

2 Unemployment Three criteria have to be met to be considered unemployed. Working age: 16 years or older Not working Looking for work Note: The UE rate is calculated for non-institutionalize civilian population, so active military personnel are excluded. Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work. BLS

3 Unemployment Discouraged Workers are not counted as unemployed. People who are available for work, but have not looked for a job in the past four weeks since they have been discouraged by labor market conditions. As of August 2016, there were 576,000 discouraged workers. There have been as many as 1.3 million discouraged workers in recent years due to the bad economy.

4 Measuring Unemployment: The Household Survey Each month, the Census Bureau interviews 50,000 households or 110,000 individuals. Households from all 50 states and the District of Columbia are in the survey for 4 consecutive months, out for 8, and then return for another 4 months before leaving the sample permanently. This procedure results in approximately 75 percent of the sample remaining the same from month to month and 50 percent from year to year. Allows to measure both short term and long term unemployment.

5 The Establishment Survey Establishment survey gathers payroll data on 390,000 establishments and over 47 million non farm workers. It says nothing about unemployment, but relies on company payroll data to track employment and industry trends. Excludes self-employed, newly opened firms, and counts people working two jobs twice. Household and Establishment surveys complement each other, but can diverge at times.

6 Measuring Unemployed Unemployment insurance claims are NOT used when calculating the national UE rate. Not all unemployed people collect unemployment benefits. UI claims data do serve as inputs into the calculation of state and local area unemployment estimates.

7 UE Rate UE Rate = Number of Unemployed Labor Force * 100 LF = the sum of unemployed and employed As of August LF = 159,463,000 UE = 7,849,000 UE Rate Jan 2016 = 7,849, ,,000 * 100 = 4.9%

8 UE Rate The Unemployment rate is measured from U-1 (narrowest) to U-6 (broadest). U-3 is the official unemployment rate you see in the paper: Total unemployed, as a percent of the civilian labor force. 4.9% for August 2016 (Iowa 4.2% for August 2016) U-6 included marginally attached workers, discouraged workers, and people working part-time who want full-time work. 9.7% for August 2016 (Iowa 7.0%).

9 Marginally Attached Persons not in the labor force who want and are available for work, have looked for a job sometime in the prior 12 months, but were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Discouraged workers are a subset of the marginally attached who gave up looking for a job for reasons such as they feel that they have inadequate skills or are being discriminated against. Marginally attached workers have given up looking for a jobs for other reasons, such as child care and other family responsibilities, transportation problems, school, and ill health.

10 Unemployment Rate (U-3)

11 Unemployment Rate (U-6)

12 U-3 and U-6

13 Unemployment Rates by Education

14 Unemployment Rates by Age

15 Unemployment Rate by Sex

16 Unemployment Rate by Ethnicity

17 Labor Force Participation Rate LFPR the percentage of the working-age population in the labor force. LFPR = Labor Force Working Age Population * 100 WAP persons 16 years of age and older not residing in institutions (jail, mental wards, retirement homes). Also known as the Civilian noninstitutional population. LFPR Aug 2016 = 159,463,000 * 100= 62.8% 253,854,000

18 Labor Force Participation Rate

19 LFPR: Men and Women

20 LFPR: Prime Working Age (25 to 54)

21 International Comparisons: Prime Working Age

22 Changes in the LFPR By Age: Jan 2008 to May

23 Falling UE Rate The UE rate peaked at 10% in October 2009 and has fallen to 4.9% in August Unfortunately, a significant part of that decline is being driven by people leaving the labor force, not to people finding jobs. Studies show that demographic factors (i.e. Boomers retiring and young people staying in school longer) account for one-third to two-thirds of the declining labor force participation rate. Other factors are a weak economy and a declining participation rate by women. The LFPR was 65.0% in October 2009 and has declined to 62.8% in August It is the lowest it has been since October 1977.

24 Employment-Population Ratio Employment-Population Ratio: The ratio of employed persons to the total civilian noninstitutionalized population 16 years old or older. Also termed the employment rate. EPR = Number of Employed Person Total Noninstitutionalized Civilian Population * 100 As of August 2016 EPR = 151,614, ,854,000 = 59.7% It bottomed out at 58.2% in October 2013, the lowest since July 1983.

25 Employment-Population Ratio

26 Employment Rate: Prime Working Age

27 International Comparisons: Prime Working Age

28 The Great Recession While about 8 percent of Americans are unemployed, nearly a quarter of Americans say they were laid off at some point during the recession or afterward, according to the survey. More broadly, nearly eight in 10 say they know someone in their circle of family and friends who has lost a job. Of those laid off in recent years, nearly a quarter said they still had not found a job. Re-employment rates for older workers have been particularly bad, with nearly two-thirds of unemployed people 55 and older saying they actively sought a job for more than a year before finding one or had still not found work.

29 Long-Term Unemployment As of August 2016, we had 2.0 million long-term unemployed persons. They account for 26.1% of the unemployed. Long-term unemployed for 27 weeks (6 months) or more. This is a human and national catastrophe. There is are connections between long-term unemployment (or even unemployment and underemployment) and lower life time earnings, shorter life expectancies, decreased health, stress, depression, strains on family and friends, lower self-esteem, and suicide. 1 in 5 suicides is associated with unemployment, as measured across 63 countries.

30 Long-Term Unemployment

31 Characteristics of the Long-Term Unemployed

32 Long-Term Unemployment

33 Three (Four) Types of Unemployment Frictional UE Short term UE arising from being inbetween jobs or just entering the labor force. Structural UE Mismatch between human capital (worker s skills) and what is demanded in the labor market. Seasonal UE UE related to seasonal changes, calendar related events, and changes in tourism. Cyclical UE Unemployment caused by a downturn in the business cycle (i.e. a recession).

34 Natural Rate of Unemployment The Natural Rate of Unemployment (or Full Employment) is when cyclical unemployment goes to zero. Only structural and frictional unemployment exist. Economists estimate the natural rate of unemployment around 5%-6%.

35 Natural Rate of Unemployment Natural Rate of Unemployment is when cyclical unemployment goes to zero. IOW, there is no involuntary or demand deficient unemployment in the economy. There are no lack of jobs, just unemployment resulting from people not having the appropriate skills and people in-between jobs or just entering the labor force.

36 Natural Rate of Unemployment

37 Unemployment By Industry

38 Layoffs vs. Hires