Comments on: Unemployment At Highest Level In 15 Years: Or Is It Even Worse?

By: Pecuniarities

Pecuniarities — Mon, 19 Jan 2009 14:02:01 +0000

Carnival of Personal Finance No. 188: The Jane Austen Edition…

Welcome to the 188th Carnival of Personal Finance! Our theme for this week’s edition is Jane Austen, as I am a admirer of both her novels and the films based on her novels, which are graced throughout with witty commentary on society — and in …..

By: Kyle

Kyle — Sat, 10 Jan 2009 19:57:27 +0000

Data is meaningless without interpretation.

a.) Much of the Shadowstats crowd is arguing exactly that, alleging outright manipulation of data.
b.) I don’t follow. Part-time and underemployed workers ARE accounted for in the BLS numbers via the average-hours-worked metric, not the 7.2% metric. You can’t use one in isolation. They are all essential.

By: William

William — Sat, 10 Jan 2009 19:25:56 +0000

Interesting, from the BLS:

“Is there a measure of underemployment?

Because of the difficulty of developing an objective set of criteria which could be readily used in a monthly household survey, no official government statistics are available on the total number of persons who might be viewed as underemployed. Even if many or most could be identified, it would still be difficult to quantify the loss to the economy of such underemployment”

By: William

William — Sat, 10 Jan 2009 18:43:24 +0000

re: “that’s not a valid argument.” … I don’t follow your thought here. I don’t see anyone arguing anywhere that a) the information isn’t publicly available, or that b) the 7.2% includes the ‘underemployed’. For point a, we have quite robust reporting from a variety of sources (look at ADP’s numbers released a few days ago) and point b, it’s just a matter of reading the fine print. The 7.2 number that got the headlines does *not* include the underemployed.

The data is there, and, so the saying goes, it doesn’t lie. It’s the interpretation of it that matters.

By: Kyle

Kyle — Sat, 10 Jan 2009 06:06:47 +0000

Also, we do have a standard comparison. It is easy to translate the pre-1994 numbers to post-1994 numbers and vice versa. Again, the data is all public.

By: Kyle

Kyle — Sat, 10 Jan 2009 06:05:08 +0000

Part-time workers are accounted for in BLS numbers. It’s in the “underemployed workers” statistic. Also, the hours-per-worker is also accounted for in the regular statistic, so that’s not a valid argument.

By: William

William — Sat, 10 Jan 2009 03:54:53 +0000

re: ” If you want to make that argument, you must logically first prove the previous methodology was the superior one.”

I think you’re missing the point. It’s not that one or the other is necessarily better- the real criticism is that we don’t have a standard comparison. The last time we saw unemployment this high was in 81-82 – so before the definition of unemployment changed in 1994. Therefore, when we compare the two numbers, we are in reality comparing two different datasets. That is, at best, misleading.

Further, the real story in the BLS report was NOT the unemployment number, but rather the number of part-time hours being worked:

http://www.calculatedriskblog.com/2009/01/over-8-million-part-time-workers.html