The Hidden Employment Problem
January 9th, 2009 by Dan Lavoie
Everybody will be focusing today on the scary top-line unemployment number: 7.2 percent. That is frightening for millions of Americans — and portends a truly abysmal job market for anyone looking.
But the Bureau of Labor Statistics report includes something that should really send a cold chill through the labor market: the number of “involuntary part-time” workers has reached 8 million, a massive year-over-year jump and the highest in history.
(click to enlarge)
The ranks of the underemployed is stunning….and especially worrisome for those just one or two paychecks away from economic ruin. Competition for low-wage jobs will surely increase in the coming months and low-skilled workers will have a much harder time finding new employment if they lose their current job.
That’s why job training, job retraining and apprenticeship programs are so vital. We have to give low-income people — especially young people — the chance to compete in this 21st century economy.
Yes, 7.2 percent is a big, scary number. But, sadly, it may only obscure the true breadth of the problem.
Thanks to Calculated Risk for the graph. If you want to understand the economics of the current downturn, head over there…very digestible and insightful stuff.
Tags: econmic crisis, economy, employment, obama, transition, unemployment
January 9th, 2009 at 12:31 pm
Excellent and much underreported point that the traditional “unemployment” rate obscures the true extent of the problem, as the unemployment rate only represents those unemployed individuals who are actively looking for work–and not the millions more who have withdrawn from the labor force entirely out of discouragement.
Many workforce and antipoverty advocates prefer to cite the Bureau of Labor Statistics’ U-6 measure (sometimes called “labor market slack”) as a more comprehensive means of discussing the employment situation.
The U-6 includes:
–the official unemployment rate (that 7.2%)
–”marginally attached workers” who have looked for work sometime in the recent and indicate they’re available to work but are not currently looking for a job (this includes “discouraged workers” who give an job market reason for not currently looking for a job–like believing there are no jobs available or no jobs for which they qualify)
–workers working part-time for economic reasons (couldn’t find full-time work, reduction in hours at existing job, etc.)
As of December 2008, the U-6 is 13.5%–up almost a full percentage point from November and up from 8.7% at the December 2007 start of the recession.
January 9th, 2009 at 12:42 pm
Great point, Katrin. The “unemployment rate” is a wildly flawed figure in its own right, for just the reasons you pointed out. 13.5 percent is nothing short of tragic. That’s about one in seven working-age Americans. Just awful.
January 12th, 2009 at 12:00 pm
In addition to U6, there’s another level of hidden impacts when you examine on a county by county basis. After all, the day to day challenges unemployment presents to an individual and their community are multiplied when you live in a county with unemployment that is already twice the national average.
January 12th, 2009 at 12:00 pm
Here’s the county graphic http://www.bls.gov/lau/maps/twmcort.gif