Re: [vox] [OT] Unemployment numbers
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Re: [vox] [OT] Unemployment numbers
on Sun, Feb 01, 2004 at 10:24:49AM -0800, andy wergedal (email@example.com) wrote:
> I was reading the news from yahoo this morning. There is an article
> that says that the governments number about the unemployed are not
> accurate. They do not count self-employed in the employment numbers.
Yes. "The chocolate ration is up again":
Brad DeLong's Semi-Daily Journal (2004)
January 31, 2004
The Chocolate Ration is Up Again!
The chocolate ration is up again! The wit and wisdom of Timothy
Kane, Ph.D. Research Fellow in Macroeconomics in the Center for
Data Analysis at The Heritage Foundation. He tells us that the U.S.
economy is now at its "natural, full-employment" unemployment rate,
and that declines in labor force participation rates and
employment-to-population ratios are positive signs:
The American Workforce: Strong Facts Trump Weak Myths: The
unemployment rate is coming back to its natural, full-employment
rate of 5.7 percent. Many skeptics attribute lower unemployment
to growing ranks of Americans so discouraged by weak labor
markets that they have stopped looking for jobs, and therefore
no longer count as unemployed, but that scenario doesn't fit the
Consider the facts:
+ 4th quarter data are overwhelmingly positive.
+ Part-time workers are predominantly voluntary.
+ Teens are driving the lower participation rates.
Let's just pick on the third. Time is limited, after all. Kane writes:
Timothy Kane: Among [American] teens, the [labor force]
participation rate peaked at 59 percent in 1978 and has trended
down by 3 percent per decade. The [labor force participation]
rate dropped dramatically by 10 percent over the last three
years. Currently, only 43.2 percent of teenagers participate in
the labor force, a level seen only once before, in 1965. For
perspective, the rate hasn't been below 50 percent since 1971,
save one month in April 1992.
We can only speculate as to why four in 10 teenagers now look
for work, instead of the traditional five in 10. Most likely,
young Americans have not lost jobs and become discouraged;
rather, they never looked for a job in the first place. Perhaps
working while in school makes less sense in an era when human
capital development is so important for lifetime income. Far
from a crisis in the job market, this is probably a positive
trend for American students' ability to focus on education. Take
it as another sign of a workforce that is evolving towards
knowledge-driven service industries and away from muscle jobs.
OK. Let's review the bidding. The labor force participation rate for
teenagers 16-19 was 51.9% in December 1992, 52.1% in December 1996,
peaked at a high for the last business cycle at 53.0% in April 2000,
was 52.1% in December 2000, and since then has fallen off a cliff:
48.1% in December 2001, 46.3% in December 2002, and 43.2% in
December 2003. The employment-to-population ratio for teenagers was
45.2% in December 2000, 40.0% in December 2001, 38.6% in December
2002, and 36.2% in December 2003.
Kane wants to pretend that the fall in the past three years in the
share of teenagers in the labor force--at work or looking for
work--is due not to the fact that it's a lot harder for a teenager
to find and hold a job now than it was three years ago but to the
fact that "working while in school makes less sense in an era when
human capital development is so important.... Far from a crisis in
the job market, this is probably a positive trend"? Has human
capital development become so much more important--so much more
important as to induce a fall in the share of teenagers in the labor
force of 1/6--in the past three years? No. It hasn't.
What's happened since 2000 is not that the rewards to teenagers of
forgoing work, staying in school, studying harder, and borrowing
money have increased. What's happened since 2000 is that it's
harder to find a job.
Now it is important to recognize one thing. The argument that the
past three years have seen a revolution in the hearts and minds of
young Americans as they recognize the value of not working so they
can study harder as they finish their education is not meant to be
convincing to anyone who studies American education or American
labor markets. But it is meant to provide talking points to someone
who wants to convince an underbriefed journalist that the bad news
about the state of the labor market isn't really such bad news.
As I've said many times before, I'll stop calling this crew
"Orwellian" when they stop using 1984 as an operations manual.
> I am currently self-employed out of necessity. I pay much
> more in taxes than I did as an employee, but I am working.
What percentage of your prior take-home income are you earning, after
taxes, and self-supplied benefits?
Karsten M. Self <firstname.lastname@example.org> http://kmself.home.netcom.com/
What Part of "Gestalt" don't you understand?
The golden rule of technical design: complexity is the enemy.
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