120,000 jobs gained, 315,000 people dropping out of the labor force. You do the math

[MadHound]

The fact is, looking at the BLS numbers today it becomes obvious to even the most stat impaired among us that once again we're seeing the numbers being used to tell a story, not reflect reality.

It started this morning, with the usual speculative run up to the release of the numbers. "Experts were predicting 180,000 jobs created, but the actual percentage would remain approximately the same, hanging in there at 9%.

Promptly at 8:30 the newswires chattered. One hundred and twenty thousand jobs created, and oh, yeah, the percentage dropped by 0.4%.

Hello? That's quite the hefty little drop, considering that by most estimates we need 125-150,000 jobs created just to keep up with the growth in the labor force. What is wrong with this picture.

Well, here is what is wrong. While there were 120,000 jobs added, 315,000 people dropped out of the labor force. Pfft, gone, no longer counted. Presto, change-o, the unemployment picture doesn't look quite as shitty as it did.

This sort of number manipulation isn't uncommon. It has been around for decades now, with the numbers being bent by one administration or another in order to fit their agenda rather than actually reflect sound information.

One hundred and twenty thousand jobs created, three hundred and fifteen thousand people dropping out of the work force. No way does this equation add up to anything good.

[Autumn]

1. Hiring has always gone up in December.

This "increase" is seasonal. I don't get all the hoopla.

[Motown_Johnny]

2. You are correct, but for people who don't pay very close attention

and only see that the rate has dropped, their consumer confidence and their approval of the job our President is doing are both likely to improve.


That doesn't help those 315,000 people any, unless the vague hope that conservatives now have a slightly harder road in 2012 counts.

[DCBob]

3. The labor participation rate has been dropping since around 2000.

Clearly there are other factors in play besides just the bad economy.

[MadHound]

5. You say that like it's a good thing

Look at the past few years, it has dropped like a rock. Yeah, other factors might be at play, though the economy and lack of jobs is the biggest factor, but this isn't a good thing. It means that people aren't working, we're seeing an increase in poverty, etc. etc.

This is not a good thing, it just makes the numbers look good.

[DCBob]

9. my point is these factors have been in play for over a decade..

and shouldnt be used to dismiss the current downward trend in unemployment.

[MadHound]

12. So we should ignore the rise in poverty, rise in early(forced) retirement,

Just pay attention to the spinning unemployment figure, eh.

But when Bush spun the numbers it was a crime, but not when Obama does?

Never mind, I don't know why I even bother.

[DCBob]

17. Not at all..

but you suggested the decline in unemployment was solely due to a decrease in labor participation rate which is not accurate. Just tying to keep it real here.

[Name removed]

41. Deleted message

Message removed by moderator. Click here to review the message board rules.

[WildNovember]

42. There are fewer jobs today than there were in Dec. 1999.

[Sirveri]

7. It could still be just a bad economy. The Bush years weren't exactly flush for many people.

I got laid off in 2002 and didn't recover until 2005... When I joined the Navy. I wouldn't be surprised if there was a significant expansion of homelessness and children moving back in with their parents (or in my case I'm looking at my mother moving in with me!). Also a large portion are likely inside the education system (which is where I'm trying to wait out the storm right now).

But with stagnant wages, participation rate has to go up, or credit use has to go up in order to just tread water against inflation.

[DCBob]

13. Clearly a bad economy is a factor.. its just not the only factor.

Furthermore I think the peak rate of labor participation in 2000 was a bit of bubble caused by the tech and internet boom in the 90's. The numbers we see now may be more normal.

[Sirveri]

34. That's a legitimate argument, though I like blaming off shoring.

We've been decimating the manufacturing sector for years, the dot com bubble likely just masked the effects during the Clinton era. That said without wage growth above the rate of inflation a decrease in participation rates doesn't really make much sense in an environment of high unemployment.

[WildNovember]

40. US economy had more jobs at the beginning of Bush2 than it does now. It's

not hard to figure out why labor force participation would decline under those circumstances.




I still don't know what these "other factors" you keep referring to are.

[Cali_Democrat]

16. Because the economy has been smoke and mirrors since 2000

[DCBob]

21. actually its been smoke and mirrors even before that..

The internet bubble was indeed a bubble even though much it was/is real for sure... but investors/businesses over-reacted to the hype.

[WildNovember]

39. Dropped in the Bush recession, trended up at the end of that, down in the Bush-Obama

recession.

What are these other factors?

When jobs are scarce, people drop out of the labor force.

[DCBob]

45. There are several possible other factors..

-- boomers retiring
-- women deciding to stay home and take care of children, etc
-- younger folks deciding to go back to school
-- people starting own business/independent consulting
-- those with other means of support just decide not to work

I am sure there are others but I think those are the main ones besides of course those that have simply given up out of weariness, hopelessness and despair.

[jeff47]

4. People leave the labor force for many reasons

Giving up on finding work is only one of them. Labor participation rate has been going down for more than a decade. Could be a sign of lots of people giving up, or could be a sign of other things...such as Baby Boomers retiring.

[MadHound]

6. Again, no, not finding work isn't the only factor,

But it is certainly the largest factor at this point in time, with this economy. You can see the reflection of this in the increase in poverty rates.

[Yo_Mama]

8. Aging - retirements are most definitely a factor. n/t

[MadHound]

15. Yes, but not the factor, not even the major factor

C'mon, the retirement years for the Boomers started only last year. I'm a Boomer and not going to retire for another fifteen-twenty years.

What we are seeing here are people who are unable to find a job being forced out of the work force. They might be fleeing into higher education, or retiring early, what have you. But given the rise in poverty, it would seem that a major reason is that people simply can't find a job.

[DCBob]

19. I agree.. I dont think retirement is a major factor..

Clearly people giving up is a major factor but those people giving up may not just be the poor and desperate. I think many are spouses and wealthy who just gave it up since its now so hard to find a job and they dont really need the money.

[joshcryer]

28. I'm not sure about that.

I think it can account for at least half of it.

What some people aren't appreciating is that college enrollment is up, too:



Thanks in large part to Obama's http://www.collegiatetimes.com/stories/15295/obama-adds-to-pell-grant-funding">unprecedented pell grant program.

I know, personally, in my own family, people who aren't working but are (unfortunately) piling up big student loans to get by.

This is why we need to get progressives elected and stop whining because when those loans come due it's going to be a School Loan Bubble that crashes. They will need assistance paying and absorbing those loans.

[DCBob]

29. Perhaps... no doubt its a factor with the boomers retiring.

just not sure its a major factor. I wonder if they collect those stats.

[joshcryer]

31. I would think that they account for retirement, but it appears that they're not.

Looking at the graph that you've posted, it's clear to me that at least in the beginnings of the 2000s there was a dropout due to the bubble bursting (and really, due to Republican anti-social policies that tend to result in people giving up), but I think the 'second' drop is reflected in large part due to retirements (and early retirements, too).

Yo_Mamma posted stats about how many people are retiring, it's a big number. We've been expecting this for awhile, so I am leaning on considering this a right wing talking point (since the last thing they want is for people to be accepting of people retiring and collecting SS).

[Yo_Mama]

35. There is strong support for your position in the Household Survey

http://www.bls.gov/news.release/empsit.t01.htm

The employment/population ratio for women 20 and over has fallen from 55.6% to 55.1% in the last year.
The employment/population ratio for men 20 and over has risen from 66.7% to 67.6% in the last year.

Admittedly as you get older the proportion of women vs men in the population rises, so retirements at an equal age should show this drop. But there is also usually an effect of "slack" employment times when some men get jobs and women who were taking up the temporary slack don't need to work any more and drop out. This occurs most in older women.

Table A-4 breaks down Household Survey data by educational attainment. It's noticeable that while employment/population ratios have mostly risen or stayed pretty static for education brackets, the "some college or associate's degree" group both showed a big drop in labor force participation and a sharply declining unemployment rate. My guess would be that these are mostly older women.

Usually the drop-out ages for older workers decline as you go up the education/earnings brackets, because the more you make the earlier you can afford to retire.

[DCBob]

47. Interesting data..

thanks for posting.

[Yo_Mama]

30. I think it is a major factor, and here's why

First, you can compare the number of people receiving SS and DI for November 2011 and November 2010 by pulling beneficiary reports at this link:
http://www.socialsecurity.gov/OACT/ProgData/icp.html

It's about 1.3 million increase over the year. There are, of course, some deaths, but far more retirements. So actual "new" beneficiaries will always be somewhat higher than the calculated total.

Second, when you look at Table A-1 (labor force participation ratios):
http://www.bls.gov/news.release/empsit.a.htm

You see that the labor force was about 153.9 million last year and this year. 1% of that is about 1.53 million. The labor force participation rate was 64.5% last year, and is 64% this year, or about 3/4 of a million less this year. The increase in retirement benefits (or disability) more than accounts for that. Of course there are new entrants to the labor force, which compensate in the other direction.

It is clearly not the only factor, but it is a very significant factor. There are also private/government pension recipients who tend to retire earlier and may wait to draw SS or may not be eligible - I would expect the number of new retirees to have risen by over 2 million over the last year.

Another way to backcheck the number is that the number of people not in the labor force increased by about 1.8 million over the course of the year. This number includes all retirees/not working disabled.

The number of discouraged workers fell over the last year. BLS has that total at about 1.1 million, having fallen about 186,000 over the year. The number of "marginally attached workers" is about the same over the year at 2.6 million, and that includes discouraged workers.

I'm guessing that there is a significant overlap between near-retirement workers and marginal/discouraged workers. It is very hard to find a job in this economy if you are older. Oh, sure, you can find really low-level work at a convenience store or retail, but it's hard to find anything that pays a living wage if you are near retirement. So I am guessing that many of these are transferring from the discouraged/marginal group to retirement.

[joshcryer]

32. Thanks for those stats, I encourage everyone to read this.

The boomers are in fact accounting for it a lot. It appears to me from those numbers that we may even be getting a lot of 'early retirements' in there (not real retirements as they're likely getting by on savings and by hunkering down until they hit actual retirement).

[Yo_Mama]

37. yes but the logical conclusion is that the economy is worse than we believe

The reason I'm claiming that is that if my contention is true, then our headline unemployment rates are not directly comparable to unemployment rates in prior post WWII times. So they don't show the real economic havoc taking place.

In the US, if you can't find real work, you're sunk, unless you can retire. But many retirees really don't have enough to live on themselves.

It's a travesty that we are cutting support for unemployed when the rates of employment are higher than they were at any other time before when we did this.

I'm going to repeat myself. WE NEVER CUT EXTENDED UNEMPLOYMENT BENEFITS BEFORE when we had anywhere near this lack of jobs. It's not just jobs - it's that many people are working part-time, pickup jobs for whatever they can get because they have no other alternative.

I really agree with what MadHound is saying ABOUT the economy - I'm trying to give real numbers to support his POV. It seems as if everyone not in DC really knows what's going on, but we can't get Congress to hear or see it.
Table A-9 splits employment by full-time/part-time among other things.

In November of 2000, we had 114,075,000 full-time workers. In November of 2011 we had 113,101,000 full-time workers. From November 2000 to November 2011, the labor force (people who are working or looking for work, doesn't count retirees) grew from 141,962,000 to 153,883,000. We have a structural job gap that's over 10 million, and that's excluding really retired boomers, and not even adding in discouraged workers.

\

I hope you can see that graph. It's of the number of full time workers, long time series. And here's the matching graph of the US labor force (which doesn't included discouraged workers), and you can see how much the population grew. I think our lack of real jobs caused a lot of the financial speculation, and it is certainly causing a lot of the poverty:


Before, real job growth matched pretty well with population growth. Over the last eleven years, there was a sharp diversion. The retirements are masking what is happening a bit, but not much. Another thing that should clue us in is how retail establishments hire their workers. It used to be you could get part-time shifts evenings or weekends or mornings or whatever. Now they want you to work whenever they want you to, so that you can't possibly put two part-time jobs together. They do this because they can, and they can because there is such a huge lack of full-time employment.

[eridani]

38. Early retirement isn't always a choice

Record numbers are applying for SocSec at age 62 who would likely prefer to work longer and get higher benefits later.

[Yo_Mama]

48. With the huge gap in jobs/potential labor force

Older workers who get laid off have terrible trouble finding new jobs, and are likely to have to retire early and then work odd jobs to eat.

[WildNovember]

43. It's a sign of there being fewer jobs available today than there were in 1999.

Labor force status: Civilian labor force participation rate



Total non-farm Employment (number of jobs)



Unemployment (number unemployed, U3)



Percent unemployment

[Karmadillo]

10. Unrec. OP uses facts and thought.

nt

[gratuitous]

11. No, no, no

It's victory laps and high fives all around!

[WillyT]

14. LOL !!!

;)

:evilgrin:

:hi:

:kick: & Rec !!!

[ProSense]

18. Here's

another chart.

In the end, none of this matter because people will always find something to complain about in the BLS data. It is what it is, and it's not mystical.

The rate is 8.6 percent and the jobs picture is slowly improving.

[MadHound]

20. Oh, cute, another chart that doesn't measure those who dropped out of the work force

Frankly, the jobs picture is holding about even, if truth be told. What's sad is that the jobs that are coming back are, for the most part, low paying retail and service sector jobs. We are seeing a continued decrease in our real world wages, our wealth, and our ability to stay above poverty level.

[Yo_Mama]

22. You are comparing apples to oranges, and that's not right

The leaving workforce number comes from the Household Survey. The "jobs" number you quoted is from the Establishment Survey. There are many reasons to believe that the Establishment survey is underestimating jobs right now.

The Household Survey would pick up the missed jobs - and it does. Here's the primary table:
http://www.bls.gov/news.release/empsit.a.htm

According to the Household Survey, we gained 278,000 jobs in November. 172,000 people joined the workforce. 487,000 more people were not in the labor force. The unemployed number dropped 594,000. There are a lot of internal consistencies in this data. First, the ADP report showed 230,000 more jobs, seasonally adjusted. Second, job losers and the end of temporary jobs dropped by 432,000. That is quite consistent with the drop in average initial claims over the last month. Third, workers who were part-time for economic reasons dropped by 378,000, which makes sense given that retail workers would get more hours and manufacturing surveys have generally showed a better pace.

The reason why the Household Survey and the Establishment Survey can differ so widely is that the Establishment survey literally polls a sample of companies, governments, etc. When that sample is picked, it's balanced. But some of the establishments in the sample will always contract (losing jobs) or fail. While that's happening, new establishments are opening up, but the sample doesn't show those. So there is an adjustment to the Establishment survey results called the Birth/Death Adjustment. That sample is based on what actually happened at businesses, but the data is always outdated, because data on new establishments isn't picked up for quite a while.

So when the economy is changing rapidly, the Establishment Survey can either be significantly more positive than reality or significantly more negative.

[MadHound]

23. LOL! Funny, funny,

I must say, you have intestinal fortitude coming into this thread trying to sell statistical snake oil, pretending that everything is really, I mean REALLY, REALLY OK!

Let's cut through the bullshit. Second line on the report, the one that says "Civilian Labor Force". Read across to the row that says "Change from:Oct.2011-Nov.2011". Note that the figure is -315,000. Sorry, but you can't dance and dazzle your way past that number.

[ProSense]

25. Here's

"I must say, you have intestinal fortitude coming into this thread trying to sell statistical snake oil, pretending that everything is really, I mean REALLY, REALLY OK!"

...the problem: If it's all "statistical snake oil," how do you know the 120,000 and 315,000 numbers are accurate? From the OP:

120,000 jobs gained, 315,000 people dropping out of the labor force. You do the math
The fact is, looking at the BLS numbers today it becomes obvious to even the most stat impaired among us that once again we're seeing the numbers being used to tell a story, not reflect reality.

It started this morning, with the usual speculative run up to the release of the numbers. "Experts were predicting 180,000 jobs created, but the actual percentage would remain approximately the same, hanging in there at 9%.

You're using the BLS numbers to reject the BLS report, while claiming that the BLS numbers don't "reflect reality"?

Do you have the real numbers?

[Yo_Mama]

33. Madhound - it used to be considered an utter disaster to have UE over 7.5%

I'm not arguing that things are "all right" - I'm arguing that this report showed genuine evidence of improvement. I mean, if your doctor tells you you have cancer and you have six months to live, and then three months later he does another round of tests and tells you you've still got six months to live, that is an improvement - but it certainly doesn't make things "all right".

Before this episode, I don't think Congress had ever terminated extended unemployment benefits before unemployment nationally dropped below 7.7%. What we are doing to people who cannot find work is unprecedented in post-WWII history.

We have sky-high youth unemployment. We have VERY high adult "core" unemployment. We have 13,300,000 people without jobs, seasonally adjusted, who are counted as unemployed. Add to that at least the 1.1 million "discouraged" workers (maybe we should call that "realistic" workers), and we get 14.4 million unemployed people. We do not possibly have jobs for more than 5 million of those.

We are basically cutting people off without a hope and without a lifeline.

Here are some other pieces from this employment report that are staggering:
Older people are literally pushing teenagers out of the job market. The labor force participation among people older than 65 without a disability is 23.2% (that's ALL people over 65, including those older than 75). The employment/population ratio is 21.6%, having risen from 20.9% last year.

In the meantime, the unemployment rate for teenagers is 26.4%, having RISEN from 26.2% last year. How sweet, fresh unemployment meat.

The glorious triumphal economy has cut the unemployment rate among whites from 8.4% to 7.2% over the last year. The total unemployment rate for blacks has dropped to - from 15.4% to 14.9%. Ain't that a shining beacon of hope.

The white teen unemployment rate has only fallen from 27.9% to 27.8% in a year. The black teen unemployment rate has RISEN from 13.5% to 14.4% over the year.
I don't know whether you will be able to see these graphs or not - they are the black unemployment rate

and the white unemployment rate since 75:


Our "recovery" in employment is really more like peak unemployment in a recession, isn't it.

[Name removed]

44. Deleted message

Message removed by moderator. Click here to review the message board rules.

[girl gone mad]

24. You do know you're not interacting with complete morons..

right?

[DCBob]

27. hard to tell sometimes.

;)

[Luminous Animal]

26. Do they count youth and young adults who are unable to find jobs?

I know several of those who only work odd jobs for cash.

[Yo_Mama]

36. If you earn any money in the survey week, they count you as employed

They do count everyone who is looking or working and over 15, but you could have gotten one hour's worth of work and be counted "employed".

That's one reason why people prefer the establishment survey - it screens that out. But at certain times it isn't reliable until much later revision.

[mmonk]

46. Already have. Already know.

[Karmadillo]

49. Kick

nt

[xchrom]

50. recommend

[JoePhilly]

51. UE UP, bad news ... UE FLAT, bad news .... UE DOWN, bad news.

Or I guess if UE went UP, we'd be cheering all of the people who re-entered the workforce.