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Who is counted as employed?

Not all of the wide range of job situations in the American economy fit neatly into a given category. For example, people are considered employed if they did any work at all for pay or profit during the survey week. This includes all part-time and temporary work, as well as regular full-time year-round employment. Persons also are counted as employed if they have a job at which they did not work during the survey week because they were:

* On vacation;
* Ill;
* Experiencing child-care problems;
* Taking care of some other family or personal obligation;
* On maternity or paternity leave;
* Involved in an industrial dispute; or
* Prevented from working by bad weather.

These persons are counted among the employed and tabulated separately as “with a job but not at work,” because they have a specific job to which they will return.

But what about the two following cases? George Lewis is 16 years old, and he has no job from which he receives any pay or profit. However, George does help with the regular chores around his father’s farm about 20 hours each week.

Lisa Fox spends most of her time taking care of her home and children, but, all day Friday and Saturday, she helps in her husband’s computer software store.

Under the Government’s definition of employment, both George and Lisa are considered employed. They fall into a group called “unpaid family workers,” which includes any person who worked 15 hours or more in a week without pay in a family-operated enterprise. Such persons contribute significantly to our productive effort and are an important part of our labor supply, particularly in agriculture and retail trade. However, unpaid family workers who work fewer than 15 hours per week are counted as “not in the labor force.”

BLS link

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The clearest indicator is that when the BLS made its changes in survey methodology. it ran a so-called Parallel Survey with the old methodology alongside the new survey for a few months in 1994. The Parallel Survey was discontinued, allegedly for budgetary reasons. The findings at the time were that the new methodology produced an unemployment rate 0.5% lower than the old rate.

I must differ with you. Fed economists have told me that they don’t trust anything they get from the BLS.

I suggest you look at the Handbook of Key Economic Indicators, page 15-16, which you can find here:

It discusses at length changes that were made in BLS methodologies in 1994 that make results before and after not comparable. The text states:

Broad classifications remain constant in definition, but questions that determine which classification respondents fall into have changed significantly for some series. Importantly, data before and after the redesign are not directly comparable despite an apparent consistency in most broad definitions…..Both the level of unemployment and the labor force appear to have been significantly affected by the 1994 Household Survey Resesign, as discussed further below.

The details follow.

You claim to be a labor economist, yet appear unaware of how the basic survey instrument that forms the foundation of unemployment measures has changed over time.

Contrary to popular belief, self-employment has not been growing much faster than overall employment.

I am a labor market economist, I have read the BLS documents and talked with BLS staff. Please, do the research before you spread bad rumors.

As to a different measure, nonfarm payroll employment: current year numbers are estimated based on a sample of employers and the birth-death model. Data for past years are based on employment reports from all employers in the nation–they all make quarterly tax reports to employment departments across the country.

BLS’s latest preliminary estimates were surprisingly good this year–very little revision (compared to big revisions the last two years). The birth-death model improved the estimating procedure. See http://www.bls.gov/ces/cesprelbmk.htm and http://www.bls.gov/opub/ils/pdf/opbils70.pdf.

I agree with first Anonymous that 150 K jobs need to be created each month just to keep up with population growth, and so a loss of 100 K is really an additional 250 K in unemployed, more or less. However, with a labor force of 155 million, that amounts to an increase in the unemployment rate of one or two tenths of a percent. And I do agree with using both U-3 and U-6, as well as tracking the labor force participation rate, to get a full picture of the labor market.

ScottB

Pascal B

Pascal B, Montreal

The point is that the “official” figures in just about everything are juiced to make the problem seem less consequential than it really is. 9% government UR would probably be closer to 18% real. You can’t fix a problem if you don’t acknowledge that you have a problem!

You might also take a look at:
Link

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That said, I must admit I am a bit astonished at how incredibly conservative the predictions of official unemployment are, given the severity of the debacle, both real and financial. If the official UR does not go beyond 9%, yes it is high, but is it worth all this panic??

Pascal B, Montreal

“In the 1930s, the government had another major lever, however, to get credit markets going again in the 1930s. RFC preferred stock, unlike the preferred shares that Treasury is going to buy today, came with equal voting rights to common. The RFC exercised this to put its own managers in place at major financial institutions. The result was a distinctive type of state-capitalism. Arguably, Treasury might have done better to take preferred stock that would give it stronger control over bank management.”

Isn’t is possible that in order to mitigate some of the destructive impacts of credit contraction, there should be Federal “managers in place at major financial institutions”?

Can we have some discussion of this policy option? The bank managers are clearly on strike; if they were railroad workers or air traffic controllers, the cops or troops would have been in control within hours.

Can it be that we will fall into depression because of a surfeit of politeness toward bank managers? Surely this option (that has been exercised by the US government before) needs to be one of the top consderations today.