An Equal Opportunity Recession
The monthly employment report from the U.S. Department of Labor, published last Friday for December, told of enormous job loss and sizable increases in unemployment. Regular press coverage hits the highlights – so to speak – 524,000 jobs down just in the month to mid-December, along with revisions to October and November showing 150,000 more cuts than already reported. Over just the last four months of 2008, a stunning 1.934 million jobs were X-ed out. This information comes from the Labor Department's so-called payroll survey, which is collected from companies.
A second, separate survey is conducted simultaneously; it talks to people. It asks them a myriad questions about whether they are working, and, for example, if they are, is it full-time or part-time, and if the latter, is that because they want to work part-time or because they can only find part-time work, and on and on, with numerous combinations and permutations. The unemployment rate comes from these data. In December, this key number was 7.2%, up from 6.8% in November and the highest since January 1993. The percentage comes from the 11 million people who told the Labor Department they were not working in December but would really like to have a job and specifically had been out looking for one in the previous four weeks. The sum of people who are working plus those who aren't but are actively seeking work is called the "labor force"; it stood last month at 154.4 million. The unemployment rate is the ratio of those not working to this "labor force" total.
There are, if you think about it, lots of other people who aren't in the "labor force". They might be students, they might be mothers or fathers staying home to raise children, they might be ill or elderly. They might also be people who want to work, but have given up finding a job; these are called, appropriately enough, "discouraged workers". For the last five years, these people numbered about 420,000, but since September, they have surged, reaching 642,000 in December. In addition, within the numbers working, some are working part-time who would prefer full-time work, but can't find any or have had their hours cut to below full-time. From a five-year average of 4.7 million, these folks, "part-time for economic reasons", surpassed 8 million in December. All together, the people who are working less than they want to or aren't working at all came to just under 20 million in December, about 12.8% of those working or wanting to. A year ago, this ratio was 8.1%.
We don't really need to make the case for you here about how severe this recession is, but the technical "unemployment rate" doesn't really capture the full impact of the economic contraction on labor market opportunities.
In examining December's myriad detail, we saw something else that we found startling. We usually think that recessions are harder on minorities in society. Our present discussion doesn't really contradict that, but the information we have does show that "unemployment" has increased most, not for blacks or Hispanics, but for white men. Over the last 12 months, total unemployment rose from 7.4 million to 11.0 million, an increase of 49.2%. That for white men rose from 2.7 million to 4.5 million, an increase of 66.4%. Black men fared no worse, with 66.0% and Hispanic men, 62.9%. Women got along noticeably better, a rise of 44% for white women, "just" 28% for black women and 33.5% for Hispanic women.
It is true that the underlying unemployment rates for white workers are significantly lower, 6.5% compared with 11.7% for black workers and 9.4% for Hispanics. But the deterioration over the past year has been concentrated in the segment of the population we generally regard as the most fortunate. There are lots of details in these survey data, but a racial breakdown of the marginal or discouraged workers we described above is not among them [there are technical statistical reasons for this lack, not sociological ones]. It may be that more minority workers have become "discouraged" or are a disproportionate share of those who want full-time work but can't get it – those facts we just don't know. The other point to be drawn from these numbers is that, regardless of race, this recession is inflicting substantial harm on everyone.
A second, separate survey is conducted simultaneously; it talks to people. It asks them a myriad questions about whether they are working, and, for example, if they are, is it full-time or part-time, and if the latter, is that because they want to work part-time or because they can only find part-time work, and on and on, with numerous combinations and permutations. The unemployment rate comes from these data. In December, this key number was 7.2%, up from 6.8% in November and the highest since January 1993. The percentage comes from the 11 million people who told the Labor Department they were not working in December but would really like to have a job and specifically had been out looking for one in the previous four weeks. The sum of people who are working plus those who aren't but are actively seeking work is called the "labor force"; it stood last month at 154.4 million. The unemployment rate is the ratio of those not working to this "labor force" total.
There are, if you think about it, lots of other people who aren't in the "labor force". They might be students, they might be mothers or fathers staying home to raise children, they might be ill or elderly. They might also be people who want to work, but have given up finding a job; these are called, appropriately enough, "discouraged workers". For the last five years, these people numbered about 420,000, but since September, they have surged, reaching 642,000 in December. In addition, within the numbers working, some are working part-time who would prefer full-time work, but can't find any or have had their hours cut to below full-time. From a five-year average of 4.7 million, these folks, "part-time for economic reasons", surpassed 8 million in December. All together, the people who are working less than they want to or aren't working at all came to just under 20 million in December, about 12.8% of those working or wanting to. A year ago, this ratio was 8.1%.
We don't really need to make the case for you here about how severe this recession is, but the technical "unemployment rate" doesn't really capture the full impact of the economic contraction on labor market opportunities.
In examining December's myriad detail, we saw something else that we found startling. We usually think that recessions are harder on minorities in society. Our present discussion doesn't really contradict that, but the information we have does show that "unemployment" has increased most, not for blacks or Hispanics, but for white men. Over the last 12 months, total unemployment rose from 7.4 million to 11.0 million, an increase of 49.2%. That for white men rose from 2.7 million to 4.5 million, an increase of 66.4%. Black men fared no worse, with 66.0% and Hispanic men, 62.9%. Women got along noticeably better, a rise of 44% for white women, "just" 28% for black women and 33.5% for Hispanic women.
It is true that the underlying unemployment rates for white workers are significantly lower, 6.5% compared with 11.7% for black workers and 9.4% for Hispanics. But the deterioration over the past year has been concentrated in the segment of the population we generally regard as the most fortunate. There are lots of details in these survey data, but a racial breakdown of the marginal or discouraged workers we described above is not among them [there are technical statistical reasons for this lack, not sociological ones]. It may be that more minority workers have become "discouraged" or are a disproportionate share of those who want full-time work but can't get it – those facts we just don't know. The other point to be drawn from these numbers is that, regardless of race, this recession is inflicting substantial harm on everyone.
posted by Carol S. | 1/13/2009 06:29:00 PM
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