We are going on a journey over a couple of blogs, looking at the unemployment situation. Today I want to try to understand the way the federal government comes up with it’s monthly number, and how that relates to the economic recovery.
The US Bureau of Labor Statistics (BLS) is responsible for calculating and reporting the month unemployment number. If you are like me, you basically assume that the unemployment number is calculated by taking all the adults in the US and divide that by the number of those adults not working. Presto, you have the unemployment number.
That’s not how it’s done. I spent a couple of hours on BLS’s website looking at spreadsheets, charts, and definition of terms. What I found is that my assumptions on each of the two variables in the unemployment equation are wrong. Let’s start with my bottom number; total adults in the
US.
Officially, the BLS calls it the “Civilian Labor Force” The Civilian Labor Force is “All persons in the civilian noninstitutional population classified as either employed or unemployed.” While that sound innocuous enough, it is filled with things you wouldn’t even think of.
First, let’s deal with the benign ones; the issues that make sense. Since it is “civilian” it excludes all military personnel from the population. That could make a difference when comparing apples to apples. With wars ending and soldiers coming back home, you could be classifying a lot more people as civilian. But as it turns out, the military levels are about the same now as compared to when Obama took office. That is what I am interested in. I want to know if real unemployment is better or worse in the last three years.
The Civilian Labor Force also excludes retired persons, students, and those taking care of children or other family members. That sounds reasonable to me. Retirees, kids in school, and stay at home Moms (who I am sure would argue they “work” for a living) should not be part of the
potential labor force. They are either already working or not eligible to work.
Next is the word “noninstitutional”. That means those not in jail and not in a mental facility. OK, I can buy that. You don’t want to include those incapable of seeking work in an unemployment number. I couldn’t find a lot of information to compare Jan 2009 (when Obama took office) to now; so I will assume that they are about the same as well.
But that leaves us with the final part of the definition; “classified as either employed or unemployed” Well, duh! What else is there? As it turns out, in addition to retirees, and such, (that I mentioned above), there are those who are classified as “Marginally Attached Workers.” What the hell is that, you ask?
A Marginally Attached Worker is “Persons not in the labor force who want and are available for work, and who have looked for a job sometime in the prior 12 months (or since the end of their last job if they held one within the past 12 months), but were not counted as unemployed
The US Bureau of Labor Statistics (BLS) is responsible for calculating and reporting the month unemployment number. If you are like me, you basically assume that the unemployment number is calculated by taking all the adults in the US and divide that by the number of those adults not working. Presto, you have the unemployment number.
That’s not how it’s done. I spent a couple of hours on BLS’s website looking at spreadsheets, charts, and definition of terms. What I found is that my assumptions on each of the two variables in the unemployment equation are wrong. Let’s start with my bottom number; total adults in the
US.
Officially, the BLS calls it the “Civilian Labor Force” The Civilian Labor Force is “All persons in the civilian noninstitutional population classified as either employed or unemployed.” While that sound innocuous enough, it is filled with things you wouldn’t even think of.
First, let’s deal with the benign ones; the issues that make sense. Since it is “civilian” it excludes all military personnel from the population. That could make a difference when comparing apples to apples. With wars ending and soldiers coming back home, you could be classifying a lot more people as civilian. But as it turns out, the military levels are about the same now as compared to when Obama took office. That is what I am interested in. I want to know if real unemployment is better or worse in the last three years.
The Civilian Labor Force also excludes retired persons, students, and those taking care of children or other family members. That sounds reasonable to me. Retirees, kids in school, and stay at home Moms (who I am sure would argue they “work” for a living) should not be part of the
potential labor force. They are either already working or not eligible to work.
Next is the word “noninstitutional”. That means those not in jail and not in a mental facility. OK, I can buy that. You don’t want to include those incapable of seeking work in an unemployment number. I couldn’t find a lot of information to compare Jan 2009 (when Obama took office) to now; so I will assume that they are about the same as well.
But that leaves us with the final part of the definition; “classified as either employed or unemployed” Well, duh! What else is there? As it turns out, in addition to retirees, and such, (that I mentioned above), there are those who are classified as “Marginally Attached Workers.” What the hell is that, you ask?
A Marginally Attached Worker is “Persons not in the labor force who want and are available for work, and who have looked for a job sometime in the prior 12 months (or since the end of their last job if they held one within the past 12 months), but were not counted as unemployed
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