All data in this presentation are from the U.S. Bureau of Labor Statistics, unless otherwise indicated. d For current data go to

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Erik Harvey
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No. 99 and his driver became unemployed a week after I took this

..? All data in this presentation are from the U.S.

d For current data go to http://www.bls.gov.

1 No. 99 and his driver became unemployed a week after I took this photo. Sad. Employment and Unemployment Who and why...? All data in this presentation are from the U.S. Bureau of Labor Statistics, unless otherwise indicated. d For current data go to (c) , Gary R. Evans. May be used only for non-profit educational purposes without permission of the author.

2 Sample from the reading: Shows the job outlook, median pay, etc. of an aerospace engineer

3 Sample from the reading: Shows the job outlook, median pay, etc. of an actuary.

4 The highest paying occupations... Source: Occupational Outlook Handbook, 2014

5 The dominance of health care in future growth... Source: Occupational Outlook Handbook, 2014

6 Key Employment/Unemployment Stats with values for February 2014 Year-ago ago stats shown in red. Unemployment rate: 8.7% (7.9%) Civilian labor force participation rate: 63.0% (63.6%) slowly trending down Payroll report: +175,000 (+157,000) Stock market very sensitive to this statistical release Employment cost index (ECI): + 0.5% 4th Q 2013 (+0.5%) Rational expectations leading inflation indicator Productivity: +1.8% 4th Q 201 (-2.0%) Remember the importance in the AS/AD model; kept inflation at bay.

7 Unemployment theory Frictional unemployment Information inefficiencies Imperfect search and relocation activities iti Structural unemployment Mismatch thbt between skill killl levels l needed dd and dth those available in a changing economy Cyclical unemployment Due to downturn in the business cycle Can add as much as 5% or more to UR

8 thousands Change in Nonfarm Payroll Monthly, February 2014, SA Dot-com recession Now The stock market is very sensitive to these data, as are politics. The last release was Friday, March 7, at +175,000, an OK number Source: Bureau of Labor Statistics database, Series ID CES , SA, one month change.

9 "Official Unemployment" definition: Who is counted as unemployed? 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. Who is not in the labor force? All members of the civilian noninstitutional population are eligible for inclusion in the labor force, and those 16 and over who have a job or are actively looking for one are so classified. All others--those who have no job and are not looking for one--are counted as "not in the labor force." Many who do not participate in the labor force are going to school or are retired. Family responsibilities keep others out of the labor force. Still others have a physical or mental disability which h prevents them from participating in labor force activities. Source: U.S. Government Bureau of Labor Statistics web site, Most of the data in this presentation is from that site. The data are compiled from monthly surveys taken by the Department of Census in a survey called the Current Population Survey (CPS).

10 12 "Official" Unemployment Rate 1960-Feb 2014, monthly, % of civilian workforce 10 8 Mean: 6.11% Red represents the trough of business cycles. In some cycles, unemployment lags the cycle by a few months Source: Bureau of Labor Statistics database, Series ID LNS , SA, one month change.

11 A hidden statistic: The "Special Unemployment Rate" The Department Labor determines the size of the civilian labor force and the percentage of that labor force unemployed by doing a monthly survey (it is not determined by the number of people collecting unemployment compensation as is sometimes reported in the media). As stated in a previous slide, the unemployed are defined das those who declare they have "actively looked dfor work in the last 4 weeks." That count is the numerator and the civilian labor force is the denominator. But they ask another question in the survey. They determine whether the respondent is "neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past." Some of these are classified as "discouraged workers." When this number is added to the numerator and published in obscure Table A-12 U6, it is referred to as the "Special" Unemployment Rate. It should be called the Real Unemployment Rate.

12 Official and Special Unemployment Rate % of labor force Monthly, 1999 Feb 2014, SA(O), NSA(S) Average: 11.0% 8.2% Jan 2014: 13.1% 6.7% Special (real) Unemployment Rate Official Unemployment Rate Source: Bureau of Labor Statistics database, Series ID, LNU NSA, original data.

13 Average weeks unemployed 1999-Jan 2014, monthly, civilian workforce Before the double millennium recessions, this was typically y less than 15 weeks. In Fall 2012 it finally started dropping below 40. Because of the high cost of unemployment insurance, this has huge cost implications for governments Source: Bureau of Labor Statistics database, Series ID, LNS SA, original data

Unemployment by Educational Level February 2014, NSA, % of fth that t category of fl labor force above age 25 College degree 3.4 College less than degree 6.

14 Unemployment by Educational Level February 2014, NSA, % of fth that t category of fl labor force above age 25 College degree 3.4 College less than degree 6.3 High school only 7.1 No high school diploma SouceL BLS News Release, The Employment Situation February 2014, March 7, 2014, Table A-4.

15 Unemployment by Marital Status by gender, above age 25, % of cohort, January 2013 Single Divorced Widowed Single Never Married Married Note: BLS no longer seems to keep current data on this. In Feb 2014, Married men: 3.8% Married women: 4.2% Single mothers: 9.1% Women Men

16 Unemployment by Race/Ethnicity by gender, above age 16, % of cohort, February 2014 Hispanic Asian Black White Female Male SouceL BLS News Release, The Employment Situation February 2014, March 7, 2014, Table2 A-2, A-3.

17 Summary Implications of the previous pevouss slides The aggregate unemployment rate tells you nothing about the uneven effects of business cycles In terms of employment, the impact of an economic downturn depends upon educational level, the higher the level; the lower the likelihood of employment martial status; if married you are less likely to be unemployed (there is a general correlation between marital status and economic well-being, especially when broken down by race) race; huge gaps in unemployment levels by race, especially for blacks and even more so for single black men - there is clear correlation of this to educational level - what remains can probably be explained by discrimination and by milieu (environment) in which personal development takes place gender; fortunately, that is starting to even out in the modern era, although not necessarily on compensation.

18 Labor Force Participation Rate (age 16+) by gender, , 10 years. plus Feb Men Women

19 Interpretation of the LFPR data (previous slide) The rise in the female labor participation rate in the 50 years between 1948 and 1998 is largely explained by The post-war breakdown in the structure of the "traditional" family where the husband worked and the wife didn't, encouraged by the active and essential participation i of women in manufacturing during the war effort. At the family level, a desire for or the necessity of raising family income. More opportunities for women in the workplace, especially in professions like law, medicine, and college education. The decline in male participation is largely explained by an aging male population (retirement) The decline on both in recent years has the same reason.

20 Current European Unemployment Sweden Spain Portugal Italy What does this bode politically for Europe? Greece Germany France Finland Eurozone (17) United States Unemployment Rates Select Eurozone Countries and the United States, 2013 UnR UnR Country United States Eurozone (17) Finland France Germany Greece Italy Portugal Spain Sweden Source: EuroStat, March 10, Unemployment rate ages Unemployment rate 25+ Source: Eurostat, Code tsdec460 date shown.

21 (Spanish unemployment video) Source: Prepper Podcast Radio Network, Spain and Greece Compete for Worst Youth Unemployment in EU (Wait Until You See the Numbers). January 25, 2013

22 The Phillips Curve Controversy The Phillips curve represents the relationship between the rate of inflation and the unemployment rate. Although several people had made similar observations before him, A. W. H. Phillips published a study in 1958 that represented a milestone in the development of macroeconomics. Phillips discovered that there was a consistent inverse, or negative, relationship between the rate of wage inflation and the rate of unemployment in the United Kingdom from 1861 to When unemployment was high, wages increased slowly; when unemployment e was low, wages rose rapidly. The only important exception was during the period of volatile inflation between the two world wars. (From the article by Kevin Hoover cited below). An original Phillips Curve vintage 1960s. See Phillips Curve by Kevin D. Hoover, Does the PC define a valid policy tradeoff option today? Controversial. Data so flat and calm in recent years that it is hard to tell,

23 Phillips Curve Modern Data Inflation rate Unemployment Inflation Pairs By casual inspection on a scatter diagram using annual data over 48 years there is no obvious tradeoff. Using quarterly or monthly data over shorter periods of time (allowing for a shift in the tradeoff line) may show a tradeoff, but probably not. Unemployment rate

24 Solutions Higher education levels and flexible education Better information flows Monster.com MonstercomTheLadderetc etc. mayhelp Unemployment compensation Retraining opportunities [teacher s thoughts on private education]

25 Source: National Public Radio Planet Money: The Scariest Jobs Chart Source: National Public Radio Planet Money: The Scariest Jobs Chart Isn t Scary Enough, by Jacob Goldstein, March

26 Source: National Source: National Public Radio Planet Money: The Scariest Jobs Chart Isn t Scary Enough, by Jacob Goldstein, March

Women in the Labor Force: A Databook

Cornell University ILR School DigitalCommons@ILR Federal Publications Key Workplace Documents 2-2013 Women in the Labor Force: A Databook Bureau of Labor Statistics Follow this and additional works at: