[vox] [OT] Unemployment numbers

[Karsten M. Self]

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on Sun, Feb 01, 2004 at 10:24:49AM -0800, andy wergedal (awerg@yahoo.com) w=
rote:
> 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":

    http://www.j-bradford-delong.net/movable_type/2004_archives/000184.html

    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
        data.

        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?


Peace.

--=20
Karsten M. Self <kmself@ix.netcom.com>        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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