Jobless rates in context

Source: Bureau of Labor Statistics

This morning, the Bureau of Labor Statistics released data on unemployment for the month of September and Q3 of 2010. BLS provides unemployment figures broken out by a whole slew of characteristics every month and quarter using their “Current Population Survey,” a monthly survey of households around the country. To be clear, being technically unemployed is only a subset of those out of work. To qualify as “unemployed” one has to not have a job, have been available for work, and have actively looked for work in the last four weeks. This does not include those who have only looked in the last year (“marginally attached to the labor force”) and those who have stopped looking because there are no jobs (“discouraged,” which is a subset of “marginally attached”).

We decided to look at different age groups and how their unemployment rate has moved since 1978, a time period that includes several recessions, most dramatically between mid-1981 through late-1982 and late-2007 through mid-2009. Right off the bat, it was striking to notice that, generally the older that worker was, the lower the unemployment rate was. In fact, even when unemployment was at its lowest point in the last 32 years for 16-to-24 year-olds (9.1 percent in Q4 of 2000), that was significantly higher than the highest rate that workers 55 and older have ever reached (7.1 percent in Q4 of 2009).

“Younger workers move around more” said Heidi Shierholz, an economist with the Economic Policy Institute (EPI). “The fact that there’s more churning amongst people means that the unemployment rate is just higher.”

Shierholz also pointed out that workers tend to be more sheltered the more seniority and the more experience they have and younger inexperienced workers may be laid off first in a down economic environment. However, Shierholz added that, “when older workers do get laid off, they get stuck in unemployment longer.”

The other quirk that stuck out was that, although workers 55 and older still have a relatively low unemployment rate compared to other age groups, the most recent recession has hit them disproportionately hard compared to other recessions. When the unemployment rate reached 7.1 percent in Q4 of 2009 that was the highest it had ever been, including the recessionary peak in 1983 (5.6 percent in Q2). In fact, that’s a nearly 27 percent jump in the unemployment rate between recessions that hit younger age groups about the same as the most recent one.

 
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Comments

  • Jon

    Does the official unemployment rate count in unemployed workers who’ve stopped looking for a job after a year or so? I’ve heard different things and different numbers.

  • jklfdsajklfd

    The official unemployment rate is people who have actively looked for work in the last 4 weeks. If they have looked within the last year (but not in the last 4 weeks) the BLS classifies them as “marginally attached to the labor force.”

    here’s the bls definitions: http://www.bls.gov/dolfaq/bls_ques23.htm

  • mc

    Unemployment rate count is not the same for all cities and states. It differs from State to State.
    Sometimes the numbers are either too low or really high. Then I realized the percentage they calculate regarding unemployment rate may not include those who have stopped looking for jobs.
    What was local has now become global. It is terrible.

  • mc

    What happens in the Middle Eastern Countries like Egypt is only one of the problems but not the only problem in the whole world. What is happening in the United States is a major problem that needs immediate attention. Many States have highest unemployment rate. Many businesses are losing money. And popular Bookstores such as Walden, Barnes & Nobles, and Borders are literally going out of business. Gasoline price is going up. Many State Government Offices have been closed and they try to lay off people or transfer their entire branch of operation from the Southern Region to some remote Northern Region.
    Many Public School Teachers are going to be laid off. How could anyone possibly think of hope and move forward when everything else from the Education to Employment is failing miserably? The so-called banks took the taxpayers’ money as bailout but are not offering any help to the community, whatsoever.
    That is not good for America and is not good for American People.