In today’s NYT, Floyd Norris hits on a subject that has been a favorite of ours over the years: Finding the true measure of the economy’s labor situation.The unemployment rate is low. The jobless rate is high.Those two seemingly contradictory statement…

Over the past few days, we’ve been discussing job creation and the various ways to think about unemployment. This has been a long standing theme around here (Augmented unemployment rate, as well as the NILF issue — Not In Labor Force). See the list at…

Construction and Financial Employment Changes Source: ADP, Macroeconomic advisors Tomorrow we learn what BLS data shows for the Non-Farm Payroll data for February. Consensus is for a meek 25,000 new jobs created. However, given the present concerns abo…

This particular complete revision also created problems of comparability between pre and post-1994 time series, which may have been corrected but if so not until the last two or three years. If not corrected, erroneous cycle peak and trough comparisons can result.

At the same time, unemployment rates fail to take account of the quality of employment, e.g., longer run and at least partially disaggregated changes in real wages.

It’s late, so, let me add a clip from a recent paper by David R. Howell, Milano Graduate School
The New School Beyond Unemployment: Measuring Labor Market Performance Across Countries:

“Recent wage trends in the U.S. underscore the current need to take changes in the quality of jobs into account in an assessment of labor market performance. Comparing business cycle peaks, the unemployment rate showed an impressive decline over the last two decades, from same period, the real earnings for less-educated workers collapsed and earnings inequality exploded, requiring more household members to hold more jobs and work more hours to maintain a constant standard of living. Real annual hourly wages for production and nonsupervisory workers fell at an average rate of .2% per year from 1979 through 1999, and weekly wages fell even faster, at .4% per year (Ibid., Table 2.4). Workers at the 10th percentile took home 9.3% less in 1999 than in 1979, and those with just a high school degree show an average wage decline of about 15% over this twenty year period, from $15.65 to $13.34 (Ibid.,table 2.6; table 2.19). As a result, the share of all full-time, full-year workers with poverty-level earnings rose from 14.4% in 1979 to 17.5% in 1998 (ibid., Figure 5G). For those without jobs or threatened with job loss, declining unemployment rates are the critical dimension of labor market performance.”

174.1 million, or 62 percent, were age 18 to 64.

Doesn’t matter how you slice or dice it, this is a rough guage of the total number available to work.

The only true guage of the aggregate strength of an economic system is how many of the total work-eligible population is working?

“Announced lay-offs surged 85 percent to 79,459 in August from 42,897 in July, according to Challenger, Gray & Christmas Inc, an employment consulting firm. August’s job cuts were the highest since February, when they totaled 84,014.”

” Private payrolls grew by 38,000 in August, following a 41,000 gain in July, ADP said. “A deceleration of employment may be under way,” the company said in a release. The report suggests nonfarm payrolls may have grown much less in August than the 120,000 anticipated by economists.

“The slowdown in hiring was not related to last month’s credit market turmoil”"

You’re talking a 50%-75% (or more) cuts from previous income.

This is chronic long term unemployment / underemployment.

Canada on the other hand has been growing 10%+ year-over-year and have begun limiting US people from entering Canada.

Take those termed unemployed, divide that BY the civilian labor force,and multiply by 100, and you get a percentage.>

So I have to ask.

What was the “official” unemployment rate in 1980? 1990? 2000?

Also from previous discussions by Barry –
What was the “official” inflation rate in 1980? 1990? 2000?

Or

What was the “official” GDP in 1980? 1990? 2000?

If everything has been jiggered to look better for whatever reason
what is the point in measuring these things?