Unemployment Report Loses Meaning as Labor Gauge

By Uchitelle, Louis | THE JOURNAL RECORD, November 1, 1993 | Go to article overview

Unemployment Report Loses Meaning as Labor Gauge


Uchitelle, Louis, THE JOURNAL RECORD


The Labor Department issued its monthly report on the health of the nation's labor force on Friday, but for millions of Americans, the unemployment rate has lost its meaning as a gauge of their well-being. For them, it will take some measure not yet invented to accurately capture their experiences.

By the Labor Department's standard, a Harvard graduate who once owned a business and now sells diet formula door-to-door is employed, not unemployed. So is a technician forced out of IBM and now stacking shopping carts.

The unemployment rate has declined to 6.8 percent in October from 7.8 percent in June 1992, but the sheer fact of holding a job does not mean, as it once did, that a jobholder feels safely ensconced in the economy.

"We fasten on the unemployment rate as a guide to the economy," said James Hechtman, a University of Chicago labor economist. "But the fact is that it was never all that satisfactory, and now it is much less so."

Measuring the labor force has become similar to measuring the windchill factor in weather reporting. The unemployment rate _ up one tenth of a point since September _ is the "temperature" on a windless day.

And the buffeting that people are taking in lost job status, in lost income and damage to self-confidence represents a stiff, cold wind. Various efforts are now being made to clock this rising wind. Even the Labor Department notes its existence.

"We are telling people who ask that the unemployment rate should not be viewed as a hardship measure," said John Bregger, an economist in the Department's Bureau of Labor Statistics. "The unemployment rate is only what it pretends to be: the proportion of the labor force out of work and hunting for jobs."

While times have changed, the Labor Department's statistical tools haven't. The monthly survey of 60,000 households that the department uses to determine the unemployment rate dates back to the 1940s, when jobholders generally enjoyed more security than they do today, and wages for most people went up each 9ear by more than inflation, instead of failing to do so _ the case today.

In such a world, the questions asked by the interviewer were easy to answer, and much more representative of actual conditions.

If people said that, during the week before the survey, they had worked for a company or for the government or for themselves, as doctors, plumbers and the like, then the interviewer put them down as jobholders.

Or they told the interviewer that they had not held a job the previous week, but had looked for one. That qualified them as unemployed. And in those days, a person without a job looked for work and usually found it. …

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