Do Those Unemployment Stories Seem Scary? Take a Look at These Facts
Articles continue to be written about the high unemployment rate and its associated misery. Some pundits use the rate as the keystone of their dire economic forecasts. Interviews with the long-time unemployed are used to highlight the supposed widespread pain.
Mention the 10% unemployment number (it’s actually 9.5%, down from 10.1%, but people still round up), and we can visualize the distraught family, with the breadwinner unable to get work, facing foreclosure and bankruptcy. The various news services have worked hard to find such situations.
The problem is these reports misrepresent the facts by using simplistic or cherry-picked information. The real picture requires examining the breakdowns provided by the Bureau of Labor Statistics (BLS).
The BLS is part of the US Department of Labor and provides in-depth data regarding employment. The graphs below are based on a number of the reports that can be found on their website. The data shown are the 2009 annual averages, with an overall unemployment rate of 9.3%.
Unemployment by age
A recent article in The New York Times highlighted the 14% unemployment in the age 18-29 group, with a lead example of a single male, age 24, living at home (“American Dream Is Elusive for New Generation,” by Louis Uchitelle, July 6).
The article plays fast and loose with other data, dismissing or not mentioning key, offsetting information.
Note: The article also contains a odd photo slideshow. It’s supposed to depict a troubled jobseeker, but, instead, presents a life of comfort and even style. Rather than providing upsetting “millennial” unemployment information, The New York Times may have inadvertently shown why so many youth remain jobless.
Age is an important factor in understanding the employment picture. As a person matures, he/she gains knowledge, experience and contacts. Likewise, the move through the years increases the desire and need to be employed. We see this effect in the unemployment rates by age. Now we can see why a reporter shopping for scary numbers would pick the young rather than, for example, those nearing or in retirement.
Unemployment by education
It’s no secret that more schooling often provides more employment opportunities. That fact is seen by looking at unemployment rates by educational level. Notice that those with a bachelor’s degree or better have an unemployment rate of 4.6%, half the national rate.
Unemployment by gender and marital status
The following graph shows three important relationships:
- First, there are significant unemployment rate differences between men and women
- Second, there are significant differences based on marital status
- Third, the differences remain pronounced even when excluding younger jobseekers (aged 16 to 24 years), although the single unemployment rate declines to near the widowed, divorced or separated rate.
So… The 9.5% unemployment rate, while a popularly watched number, provides a misleading picture of what is happening. Therefore, in thinking about the economy’s future, we can dismiss any scary forecasts built on it or, particularly, on hand-picked numbers or examples (like The New York Times article’s 18-29 year-old group and the single, 24 year-old male).
