03
Aug
2013
Employment Ratios: Total, Men, and Women
Tyler Cowen and Scott Sumner are debating over the significance of the sharp decline in the employment ratio (which looks at what percentage of the working-age population is employed, and is a different indicator from the labor force which considers the percentage of those actively seeking employment).
Although someone brought it up in his comments, Scott didn’t deal with what is clearly one of the huge drivers of the total ratio over the last 50 years: women entering the work force. When you decompose it by sex (red=women, green=men, blue=total), it sure does look like the economy is broken:
How does it look like the economy is broken? The Employment level is growing at a faster rate than the Civilian Noninstitutional Population. This past year, employment level grew 1.43% while the working age population grew .98%. People seem to forget that the denominator in that ratio is growing when claiming the ratio shows there is no recovery.
Civilian noninstitutional population (thousands)
http://data.bls.gov/timeseries/LNS10000000
July 2012: 243354
July 2013: 245756 = .98% increase
Employment level (thousands)
http://data.bls.gov/timeseries/LNS12000000
July 2012: 142250
July 2013: 144285 = 1.43% growth rate
Right Joe, and if we extrapolate that line out, it looks like we’ll get to the pre-recession employment ratio by about 2025. That’s what I mean by “broken.”
Does the employment ratio take into account part time versus full time work?
As far as I know, anytime FRED uses the word “employment” it is when anybody is receiving a wage of some kind or another (minus pensions, welfare, investment income, disability, etc), without regard to how many hours per week/month are worked. However, if iwe were to make such a distinction, how do you think that this would drastically change the data? Considering that each time-series presented is based upon the same methodology, would that somehow change the dynamic shown or the relation between each set?
I asked the question out of my own curiosity for what direction employment was headed in. The reason I mention this is because when I see new jobs numbers reported over the last couple of years it seems a majority are part timers.
I doubt the data would change in terms of gender, but I would be interested to see the employment ratio data compared to removing the part time component, or perhaps look at total hours worked.
Basically I’m wondering how much of the unemployment rate/employment ratio is being changed purely by part time workers entering the workforce compared to how many of these people would rather be working full time. Might give an interesting view of how our economy is changing. Or maybe not.
No, this is false. Since the labor market began to recover in January 2010, almost 92% of the jobs created were full-time. There have been a few months with big spikes in part-time jobs created, but this oft-repeated factoid is a myth.
Jan 2010 FT jobs: 110,614,000
Jan 2010 PT jobs: 27,721,000
July 2013 FT jobs: 116,090,000
July 2013 PT jobs: 28,233,000
So roughly 6 million jobs created, only 0.5 million of which were part-time.
sources:
http://research.stlouisfed.org/fred2/series/LNS12500000
http://research.stlouisfed.org/fred2/series/LNS12600000
Hmmm. Maybe I’m wrong here, as I haven’t looked at the data, but I was alluding to stuff like this:
Most 2013 job growth is in part-time work, survey suggests
Here’s the relevant portion of the article: “Over the last six months, of the net job creation, 97 percent of that is part-time work,” said Keith Hall, a senior researcher at George Mason University’s Mercatus Center. “That is really remarkable.”
Hall is no ordinary academic. He ran the Bureau of Labor Statistics, the agency that puts out the monthly jobs report, from 2008 to 2012. Over the past six months, he said, the Household Survey shows 963,000 more people reporting that they were employed, and 936,000 of them reported they’re in part-time jobs.
“That is a really high number for a six-month period,” Hall said. “I’m not sure that has ever happened over six months before.”
Bob, that’s why Krugman argues for alien defense lasers and proper deficit spending…
Whatever, even if the economy buys the manipulation and finally increases job creation so that we get full time jobs (not just Obamacare induced part time jobs for the most part), Austrians would still argue that the new prosperity is phony, since it is not based on real market prices but on pure intentional manipulation of them, even if the Fed could normalize its balance sheet in this situation without some dire consequences.
More women in the workforce means more taxation.
More taxation means more interest to be earned lending to the US Treasury.
This is why the Rockefeller Foundation financed magazines, newspapers, publishing houses, and news organization to promote the women’s liberation throughout the 60s and 70s.
But the green line went down as the red line came up, so to a large extent the women simply displaced the men. Maybe in a few more generations those lines will get even closer together, although always there will be a tendency for women to stay home feeding newborn babies.
“But the green line went down as the red line came up.”
Not equally.
Plus, intentions are not always the same as results.
Doesn’t more taxation mean *less* interest to be earned lending to the US Treasury? With a larger tax base, there is less need to borrow to finance current spending.
Haha, you’re so funny. Thinking there is all this self-restraint and stuff.
With a larger tax base, thge limits to borrowing are expanded, and you know the incentives when you spend other people’s money.
Perhaps I am not seeing the obvious, but I don’t understand this logic:
“With a larger tax base, thge limits to borrowing are expanded”
Can you expand on this? Why? Does a state with a larger tax base look better to potential creditors, so they will get lower rates? Or are you suggesting a different mechanism?
@Jeremy H
Why do people with higher incomes tend to get better access to credit?