General Question

DaphneT's avatar

Why count some unemployed as unemployed and not others?

Asked by DaphneT (5728points) December 2nd, 2011

So today’s news is about the jobs numbers and it struck me that not counting the unemployed in their totality, whether they are looking for work or not, means that our economic situation is more dire than reported. When did the U.S. start counting and who sets the policy on counting and how many times has the policy changed?

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11 Answers

CaptainHarley's avatar

They tell us that there’s no way to track total unemployment. Only those people currently recieving unemployment compensation or who have applied for it are trackable. The Department of Labor compiles the statistics. They are part of the executive branch of government. Enough said.

cockswain's avatar

We started tracking in 1948. Don’t know how many times the policy has changed, and @CaptainHarley is right. We don’t have means to track underemployed or discouraged workers.

Mariah's avatar

I guess it helps to better depict the state of the job market to measure the number of people who are trying to find work but aren’t able to. That paints a good picture of our job deficit. A discouraged worker on the other hand can exist in any economic climate; even if there are jobs widely available, you can’t get one if you don’t look for one.

Disclaimer: So not an expert in economics.

blueiiznh's avatar

But a number that reflects the number of people who are trying to find work but aren’t able to is pretty subjective as is the concept of using the unemployment number as a gauge for how good or bad the job market is. Sure you can use it as a short range trend, but not decade to decade comparisons.
There are so many times I hear someone say that they can’t find a job. I find that people who want to work will find a job. People who are looking for a job that matches one that they lost and are expecting to wait until they do are not only using the system, but are fooling themselves. There are jobs out there and some people just can’t humble themselves to get back to work with a lesser job when it comes along versus waiting years till they find one that fits them.

gasman's avatar

You can’t go around and interview everybody in the country, so you have to rely on pooled statistics of some kind, such as government rolls of unemployment benefits. These exclude the unemployed whose benefits have run out or who never registered, etc., causing undercount. Other measures might produce overcount. It takes experts to properly interpret the reports for the rest of us.

CaptainHarley's avatar

An expert is someone who learns more and more about less and less, until eventually he knows everything there is to know about nothing. : )

zenvelo's avatar

Unemployment statistics have excluded those who are no longer seeking work since the late forties. It also does not reflect those who are underemployed, such as a business executive that is now working at Starbucks or Wal-Mart.

Today’s number showed greater gains in the private sector offset by 20,000 government jobs lost.

cheebdragon's avatar

A higher number would reflect poorly on the president, it would be stupid to actually be honest this close to the end of his term.

(I’m not saying thats the only reason, its just an observation…)

laureth's avatar

Then, @cheebdragon, it’s a “trick” that all of the presidents have used, at all parts of their term, since we started keeping track, eh?

bkcunningham's avatar

I shared a link with @laureth in another thread about how the government compiles unemployment stats. It has nothing to do with the actual unemployed in this country.

From the US Bureau of Labor Statistics: Some people think that to get these figures on unemployment, the Government uses the number of persons filing claims for unemployment insurance (UI) benefits under State or Federal Government programs. But some people are still jobless when their benefits run out, and many more are not eligible at all or delay or never apply for benefits. So, quite clearly, UI information cannot be used as a source for complete information on the number of unemployed.

Other people think that the Government counts every unemployed person each month. To do this, every home in the country would have to be contacted—just as in the population census every 10 years. This procedure would cost way too much and take far too long. Besides, people would soon grow tired of having a census taker come to their homes every month, year after year, to ask about job-related activities.

Because unemployment insurance records relate only to persons who have applied for such benefits, and since it is impractical to actually count every unemployed person each month, the Government conducts a monthly sample survey called the Current Population Survey (CPS) to measure the extent of unemployment in the country. The CPS has been conducted in the United States every month since 1940, when it began as a Work Projects Administration project. It has been expanded and modified several times since then. For instance, beginning in 1994, the CPS estimates reflect the results of a major redesign of the survey. (For more information on the CPS redesign, see Chapter 1, “Labor Force Data Derived from the Current Population Survey,” in the BLS Handbook of Methods.)

There are about 60,000 households in the sample for this survey. This translates into approximately 110,000 individuals, a large sample compared to public opinion surveys which usually cover fewer than 2,000 people. The CPS sample is selected so as to be representative of the entire population of the United States. In order to select the sample, all of the counties and county-equivalent cities in the country first are grouped into 2,025 geographic areas (sampling units). The Census Bureau then designs and selects a sample consisting of 824 of these geographic areas to represent each State and the District of Columbia. The sample is a State-based design and reflects urban and rural areas, different types of industrial and farming areas, and the major geographic divisions of each State. (For a detailed explanation of CPS sampling methodology, see Chapter 1, of the BLS Handbook of Methods.)

Every month, one-fourth of the households in the sample are changed, so that no household is interviewed more than 4 consecutive months. This practice avoids placing too heavy a burden on the households selected for the sample. After a household is interviewed for 4 consecutive months, it leaves the sample for 8 months, and then is again interviewed for the same 4 calendar months a year later, before leaving the sample for good. This procedure results in approximately 75 percent of the sample remaining the same from month to month and 50 percent from year to year.

DaphneT's avatar

@bkcunningham has a great answer, I didn’t know that surveys were used, but that makes so much sense. Any actual data would have to be submitted by the states, which introduces a layer of bureaucracy which equals time delay, and the states would require reports from each county and so on. That time delay would mean that the statistics are reported for the previous month or even several months prior to the report.

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