October 18, 2011

Hypothesis: True Unemployment Rate Is Never Reported

The issues highlighted by the Occupy Movement have been around for awhile. Yet, in September, when I asked myself what has changed, I did not have to ruminate at all. Immediate ideas came to mind. One was how hard it is to find a job.

My son just graduated from college this year, in 2011. Over the past year, many of my son's friends, who graduated a year ago, have been been pounding the sidewalks looking for work. They graduated from New College, Florida's Honor College.

One of these graduates was smart and articulate, presented well, and looked like a great employee catch. But his job search quickly degenerated into looking for whatever low-paying job would take him. As it turns out, jobs waiting tables were almost impossible to come by. When did that happen? The proportion of restuarants to population is oversized in Sarasota. We have an excess of restaurants due to being a tourist magnet. Yet, this young man was having trouble finding a job busing tables. If one of my contemporaries were to regale me with their career path, it might start out like this, "In high school back in the 70's, I began by busing tables ...". But today, a college graduate feels lucky to nab such a job.

If this were an isolated incident, I wouldn't think much of it, but all of my son's contemporaries are having great difficulty securing jobs, never mind finding something in their field. I think this represents something larger. Over the past couple of years, the media has highlighted the stories of laid-off workers - a magazine editor snapping up a job in retail or an investment banker making ends meet as a bartender. And now I can add to this list - a newly minted college grad having trouble landing a job busing tables. This is the face of job destruction. This is what follows downstream after global corporations ship their jobs overseas. Or if you are Rick Scott, the Governor of Florida, you might argue it's the face of all those college graduates with useless degrees in anthropology.

When I graduated college in 1980, I remember confronting the viscious cycle of not being able to get certain jobs because I didn't have the experience. And, yet, how was I supposed to get that experience, if I couldn't get a job. At the time, I remember tracking the official unemployment statistics as they got worse in 1981 and 1982, passing the 10% mark into the double digits.

U.S. Unemployment Rates Month-by-Month
Even with such high unemployment rates, in 1980-1982, there were jobs waiting tables, loading boxes for freight companies, fixing cars. Today the official unemployment numbers look better in comparison, at 9.1%. Yet jobs are scarce. The duration of unemployment is longer. We have lost far more jobs during the last couple of years than we did in the early 80's. And, it seems that many more people have given up looking for work.

It will shock no one that statistics sometimes lie. Admittedly, I was duped by these statistics into a quasi-complacency concerning unemployment. But due to the employment status of my son's friends, I looked into it. I found a nice quote from a May 13 article, "Is the U.S. Unemployment Rate Really 9.0 Percent?".

For example, counting only people who have been actively looking for work for 15 weeks or more in North Dakota gives an unemployment rate of 1.1 percent in 2010.

On the other hand, counting people in Nevada who wish they had a full-time job and don't have one, including those who gave up and went back to school, took a low paying retail job because they couldn't find a job that uses their skills, started a small business, or got caught stealing and are now in jail, the rate is likely well over 30 percent.

After two seconds of thought, I am willing to hazard a hypothesis that the true unemployment rate is always whitewashed. Otherwise, the approval ratings of incumbent politicians would plummet, and they would not get reelected. So forget about the statistics and talk with those around you. Statistically, you're very likely to find someone Occupying Your City who is looking for work and looking for an opportunity to discuss it.

1 comment:

  1. email from Patti C :
    Of particular note were your comments about your son and his friends. I'd like to say "Well, that's Sarasota and everyone knows things are worse in Florida" but my daughter's friends have had similar experiences up here. Things are not nearly as bad; they can at least usually find some kind of work but only rarely have any of them found a job in their field. Some who have been so fortunate as to find something that relates to their degree (my daughter is one of the lucky ones) end up working part time as "independent contractors" which is to say: no benefits, no paid time off, no mileage reimbursement, etc., etc. I'm not blaming the small business for the independent contractor status as they are doing their best to stay afloat and, hey, at least they hired a young woman and are giving her a chance to learn and gain experience.

    Unemployment statistics don't capture any of this.