Employment Statistics: Let’s Tell the Whole Story

UNCOMMON SENSE 4 © 1994 revised November 2023

By Helen Lachs Ginsburg, Economics, Emerita, Brooklyn College of the City University of New York, Bill Ayres, Co-Founder of WhyHunger, and June Zaccone, Economics, Emerita, Hofstra University

Editor’s Note: The concept of this piece, written soon after our founding,  was created by Professor Helen Lachs Ginsburg, a co-founder and major influence in shaping the work of the National Jobs for All Coalition [later Network]. This approach to the “whole story” is the basis for NJFAN’s signature Full Count.

Unemployment figures are not always what they seem. The U.S. Bureau of Labor Statistics (BLS) regularly reports the nation’s monthly and annual “official” unemployment rate. In 2022, this official unemployment averaged 3.6 percent, representing 6.0 million people. But these numbers don’t tell the whole story.

The BLS report provides data on large groups that are not counted as unemployed. Among them are 3.9 million involuntary part-time workers who wanted but weren’t able to get full-time employment, as well as another 5.6 million people who wanted jobs but were not actively seeking work. Of that group, 1.5 million had searched for work during the previous year and were available to take a job immediately. The rest wanted work but had not looked for it because they didn’t expect to find any, or weren’t able to work for a variety of reasons, including lack of child care or transportation, or a disability. Public policy changes, for example, affordable child care, would enable many of these people to work. In addition, in 2022, another 15.1 million people who worked full-time all year–-one in eight full-time workers-m–had annual earnings below $29,950, the government’s meager poverty line for a family of four.  If the work week is counted as 40 hours, for 52 weeks a year, this implies an hourly wage of $14.40.

We need a new set of employment statistics that includes each of these four groups. Here is an example for 2022:    

Officially Unemployed Workers      6.0 Million
Involuntary Part-Time Workers      3.9 Million
Non-Job Seekers Who Want a Job      5.6 Million
Full-Time Year-Round Workers Earning less than Poverty Level* (for a family of four, 2022: $29,950)   15.1 Million [Estimate]

*Source: estimated from Current Population Survey Annual Social and Economic Supplement, Bur. of the  Census, 2021) and Poverty thresholds     Unemployment: https://www.bls.gov/cps/cpsaat01.htm

It should be noted that these numbers do not include our extraordinary jail and prison population. At the end of 2022, there were an estimated 1.2 million people in state and federal prison, despite a substantial drop. [1] That number grew rapidly in the 1980’s and 1990’s, peaking in 2008, made up disproportionately of young Black men. [2] If inmates were counted as unemployed, the official jobless rate would rise by over one-half percentage point. Of course, the effect on measured unemployment of young Black men would be far greater.

The reported unemployment is an average, obscuring differing rates by group. The BLS reports the wide differences in the rate by sex, age, race, disability, ethnicity, education, and region, though there are not usually in the news. [3] Some, such as race, disability or youth, are significant. To illustrate, in October 2023, when the reported unemployment rate was 3.9%, the rates ranged from 3.1% for Asians to 18.8% for Black teens. [4] Without the higher unemployment of the disabled that month, the unemployment rate would have been 3.4% instead of 3.9%. Current data are reported in our monthly unemployment report. An archive of these data from January 2009 is available on our website.

Even these adjusted unemployment data do not capture a full picture of the job market. This would have to include the labor force participation rate [LFPR], that is, the labor force as a share of the civilian noninstitutional population. For example, the rate that includes both men and women 16 years and older, reached a peak of 67.3% for several months in early 2000. It slowly declined after the financial crisis of 2008, plunged with COVID, and then recovered modestly. It is now only 62.3. [10/23] The rate for prime-age men [25 to 54 years old], typically above 95 until the early 1970’s recession, began drifting down, reaching a minimum of 86.4 during the epidemic, and has now partially recovered to 86.4 (in August 2023, the latest reported month). [5]

Contrary to a widespread misperception that all of the unemployed collect unemployment insurance, in 2022, only 26% of the unemployed applied for unemployment insurance, over half of them because they believed they were not covered. [6] And on average, unemployment benefits replace less than half of an unemployed worker’s lost wages.[7] (Official unemployment figures come from a sample survey of the population, not from unemployment insurance offices.)

After rising to over 14% during a month in 2020 during the epidemic, unemployment finally fell to levels below 4%, which have continued to the present, 10/23.[8] Though the Federal Reserve’s mandate is to reduce both unemployment and inflation, the latter has been privileged.  Chronic fears of inflation of both the Fed and the financial sector have led to higher interest rates and dampened economic activity, often long before excess capacity and unemployment have been erased. The recently ended era of low interest rates permitted unemployment to fall below 4%. More usual is worry, such as that by the Dallas Federal Reserve President of rising wages with unemployment declined below 6.1%. [9 and Uncommon Sense 3.]  Asset inflation, such as a booming stock market or rising home prices, gets only congratulation.

Corporate chiefs and financial elites fear that tight labor markets increase worker power to get higher wages. They are probably right, but this would be beneficial. There has been a serious and unfair wage lag that has contributed to rising inequality: wage increases have fallen far short of productivity increases, benefiting corporate profits and incomes. The Economic Policy Institute has estimated that “productivity grew 3.7 times as much as pay” between 1979 and 2021, unlike the period from 1948 to 1979, when policy, including a rising minimum wage and stronger unions, resulted in their rising in tandem. [10] The real average weekly earnings of production and non-supervisory workers in the private sector remain below their level in 1973. [11]

After decades of lagging pay and benefits, job insecurity, long hours, and employer monitoring, workers have begun to resist. The successful strike of the United Autoworkers (UAW) is the most significant. The new leadership, unusually strategic in strike planning, won major benefits, including reopening a closed plant. It has proposed that other unions end their contracts simultaneously on May 1st , which would enhance labor strength. [12] There is more public support for unions and more worker action. [13] Increased power of workers to contest work conditions results partly from their reluctance to return to unsafe workplaces and some labor shortages with economic recovery.

Workers deserve a job guarantee mandating that everyone who wants a job has one and that all jobs pay at least a living wage.  The movement underway to promote a federal job guarantee advances this right. Recognizing the burden of unemployment and low earnings borne by millions of Americans, we must develop policies which guarantee decent, living wage Jobs for All!

[1] https://www.ojp.gov/news/news-release/bjs-releases-preliminary-statistics-incarcerated-populations-2022  

[2] https://www.sentencingproject.org/publications/black-disparities-youth-incarceration/   “…data collected through the Current Population Survey… don’t include some of the most disadvantaged segments of the population—people who are highly mobile, people who don’t live in households, or people who reside in prisons and jails.” https://www.russellsage.org/news/mass-incarceration-and-education-questioning-conventional-data and https://www.washingtonpost.com/news/wonk/wp/2016/02/26/america-has-locked-up-so-many-black-people-it-has-warped-our-sense-of-reality/

[3] See, for example, https://www.cnn.com/2022/11/04/economy/october-jobs-report-us/index.html

[4] unemployment data, October 2023: White 3.5%; African American 5.8%; Hispanic 4.8%; Asian [nsa] 3.1%; Persons with a disability [nsa]: 7.4%; Men 20 years and over 3.7%; Women 20 years and over 3.3%; Teens (16-19 years) 13.2%; Black teens 18.8%. nsa=not seasonally adjusted

[5] “The participation rate is the share of the population 16 years and older working or seeking work.” https://fred.stlouisfed.org/graph/?graph_id=198255,   https://fred.stlouisfed.org/graph/?graph_id=581914 and https://fred.stlouisfed.org/graph/?g=lrqw See “Is the Decline in the Labor Force Participation Rate During This Recession Permanent?” 

[6] ] https://www.bls.gov/opub/ted/2023/most-unemployed-people-in-2022-did-not-apply-for-unemployment-insurance-benefits.htm During recessions, more of the unemployed receive benefits as job losers are a larger fraction of the unemployed, but even with extended unemployment benefits and other special programs, most of the officially unemployed don’t receive benefits. https://oui.doleta.gov/unemploy/images/carouselapplication_and_recipiency.png  

[7] That rate for 2021 was less than 45%. https://oui.doleta.gov/unemploy/ui_replacement_rates.asp

[8] https://fred.stlouisfed.org/graph/?graph_id=373407

[9] “The debates over full employment and Federal Reserve policy are generally dominated by the interests of the minority who worry more about inflation and asset values than those who worry about jobs and paychecks.” Jared Bernstein,Wash. Post.  See also Dallas Federal Reserve President Richard Fisher on Wages.  “I would be very surprised if we were to simultaneously—as the Fed believes or the Fed forecasts—bring inflation down to something approaching the 2% range and, at the same time, see unemployment rise no higher than 4.4%,” he [Larry Summers] said. “It continues to be my view that we are unlikely to achieve inflation stability without a recession of a magnitude that would take unemployment towards the 6% range.” https://www.yahoo.com/now/larry-summers-says-u-recession-113019664.html

[10] https://www.epi.org/productivity-pay-gap/

[11] $873.89, 2/73, compared to $822.66, 9/23 in 2020 prices: https://fred.stlouisfed.org/graph/?graph_id=1248424

[12] https://www.thebignewsletter.com/p/labor-unions-are-industrial-policy and https://www.freep.com/story/money/cars/ford/2023/10/29/uaw-strike-fain-wholeheartedly-endorses-ford-deal-urges-approval/71374873007/

[13] https://edition.cnn.com/2022/09/12/politics/unions-strikes-what-matters/index.html

Editor: June Zaccone, Assoc. Prof. [Emerita] of Economics, Hofstra University.