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4 - id ^: tin /l / \ b 98th Congress 1st Session ] ) f JOINT COMMITTEE PRINT ( S. P r t . 9g_72 TOTAL WEEKS OF UNEMPLOYMENT: A NEW MEASURE OF LABOR MARKET DISTRESS A STAFF STUDY PREPARED FOR THE USE OF THE SUBCOMMITTEE ON ECONOMIC GOALS AND INTERGOVERNMENTAL POLICY OF THE JOINT ECONOMIC COMMITTEE CONGRESS OF THE UNITED STATES JUNE 20, 1983 Printed for the use of the Joint Economic Committee U.S. GOVERNMENT PRINTING OFFICE 22-188 O WASHINGTON : 1983 JOINT ECONOMIC COMMITTEE [Created pursuant to sec. 5(a) of Public Law 304, 79th Congress] SENATE HOUSE OF REPRESENTATIVES ROGER W . JEPSEN, Iowa, Chairman W ILLIAM V. ROTH, J r ., Delaware JAMES ABDNOR, South Dakota STEVEN D. SYM M S, Idaho M ACK M ATTINGLY, Georgia ALFONSE M. D’AM ATO, New York LLOYD BENTSEN, Texas W ILLIAM PROXMIRE, Wisconsin EDWARD M. K EN N ED Y, Massachusetts PAUL S. SARBANES, Maryland LEE H. HAM ILTON, Indiana, Vice Chairman GILLIS W . LONG, Louisiana PARREN J. MITCHELL, Maryland AU GUSTU S F. H AW K IN S, California DAVID R. OBEY, Wisconsin JAM ES H. SCHEUER, New York CHALMERS P. W YLIE. Ohio MARJORIE S. HOLT, Maryland DAN LUNGREN, California OLYM PIA J. SNOW E, Maine Bruce R. B artlett , Executive Director J ames K. G albraith , Deputy Director S u b c o m m it t e e on E c o n o m ic G o a l s and LEE H. HAM ILTON, Indiana, Chairman AUGUSTUS F. H AW K IN S, California OLYM PIA J. SNOW E, Maine I n t e r g o v e r n m e n t a l P o l ic y SENATE HOUSE OF REPRESENTATIVES LLOYD BENTSEN, Texas, Vice Chairman ROGER W . JEPSEN, Iowa ALFONSE M. D’AM ATO, New York (II) LETTER OF TRANSMITTAL J u n e 20, 1983. Hon. R o g e r W. J e p s e n , Chairman, Joint Economic Committee, Congress o f the United States, Washington, D.C. D e a r M r . C h a i r m a n : I am pleased to transmit herewith a staff study entitled “ Total Weeks of Unemployment: A New Measure of Labor Market Distress/' The study was prepared by Dr. Paul B. Manchester, a Joint Economic Committee staff economist. In this study total weeks of unemployment, the product of the number unemployed and the mean duration of unemployment, is developed as a new labor market indicator. Despite the decline of 844,000 in the number of unemployed between December 1982 and May 1983, total weeks of unemployment rose, due to an increase in the average length of unemployment from 18 weeks in December to a record 20.4 weeks in May. Persons unemployed last month had been out of work for a total of 228.3 million weeks, a record level. Since the start of this recession in July 1981, the number of unem ployed has risen by 43 percent, but total weeks of unemployment have more than doubled, due to a sharp increase in the duration of unemployment. Traditional measures such as the unemployment rate and the number unemployed fail to consider the length of the period of job lessness. Clearly someone out of work for 1 year is subject to much greater hardship than someone out of work for 1 week. The Labor Department does provide measures of the average length of unem ployment, but these are presented separately from the information on the extent of unemployment. We currently have two separate one-dimensional indicators of our unemployment problem; the new measure proposed in this study combines the extent of unemploy ment and the duration of unemployment to present a full two-di mensional picture of the severity of the situation. Detailed comparisons of the shares of the unemployment burden borne by various demographic groups using this new measure and traditional alternatives are made in this study. In 1982 black males, blue-collar workers, and persons formerly employed in man ufacturing and construction experienced longer than average peri ods of unemployment in addition to their above average rates of unemployment. Thus, the shares of total weeks of unemployment borne by these groups greatly exceeded their shares of the labor force. The study concludes with an analysis of the cyclical record of this new measure and a comparison with alternative indicators. (in) IV The views expressed in the staff study are those of the author, and do not necessarily represent my views or the views of any other Member of the Joint Economic Committee. Sincerely, L ee H . H a m il t o n , Chairman, Subcommittee on Economic Goals and Intergovernmental Policy. CONTENTS Page Letter of transm ittal....................................................................................................... hi TOTAL WEEKS OF UNEMPLOYMENT: A NEW MEASURE OF LABOR MARKET DISTRESS Demographic breakdown................................................................................................ Duration o f unemployment............................................................................................ Cyclical record.................................................................................................................. Related measures............................................................................................................. Conclusion......................................................................................................................... 4 7 8 8 9 Ch a r t Total weeks of unemployment, 1969-83...................................................................... 3 T ables 1. 2. 3. 4. 5. 6. Measures o f unemployment, 1969-83...................................................................... Measures o f unemployment by race and sex, 1982.............................................. Measures o f unemployment by age, 1982............................................................... Measures o f unemployment by occupation, 1982................................................. Measures of unemployment by industry, 1982..................................................... Number unemployed and total weeks of unemployment, by duration of unemployment, May 1983....................................................................................... (V) 2 5 5 6 6 7 TOTAL WEEKS OF UNEMPLOYMENT: A NEW MEASURE OF LABOR MARKET DISTRESS By Paul B. Manchester* The economic, personal, and psychological hardships resulting from unemployment depend not only on the fact of being unem ployed, but also on the length of unemployment. The effects of long-term unemployment on the physical and psychological health of the jobless, their dependents, and others fearing loss of employ ment have been shown to be severe.*1 Unemployment compensation benefits replace only part of workers' lost income, and as time passes increasing numbers of the unemployed receive no benefits, or exhaust their benefit rights. Workers may also suffer depreci ation of job skills or habits from extended inactivity. The personal hardships are borne by the unemployed and all those dependent on the unemployed.2 Social unrest and crime may be exacerbated by extended periods of unemployment. The loss to the economy from extended unemployment is the value of total output foregone over the entire period of joblessness. The full dimensions of labor market distress reflect both the breadth of unemployment, measured by the number of people un employed, and the depth of economic hardship, measured by the average duration of unemployment. Traditional measures such as the number unemployed, the offi cial unemployment rate and the alternative rates prepared by the Bureau of Labor Statistics, and “ labor force time lost," capture only the current magnitudes of unemployment, not the cumulative damage. Other measures such as the mean, median, and percent age distribution of the duration of unemployment indicate the typi1 cal length of joblessness, but fail to show the extent of unemploy ment. None of the published indicators measures the combined ef fects of the size of current unemployment and the duration of un employment. Total weeks of unemployment is a new measure of labor market distress which combines the effects of a higher level and a longer duration of unemployment. This index equals the number of unem ployed multiplied by the mean duration of unemployment. In effect, this measure weights each unemployed worker by the *Economist, Joint Economic Committee. The views expressed in this communication are those of the author and do not necessarily represent those of the Joint Economic Committee or its members. I would like to thank Robert Fisher and Gloria Green of the Bureau of Labor Statis tics for facilitating the computations underlying this analysis, and James Galbraith and Bill Buechner of the Joint Economic Committee for helpful comments on an earlier draft of this study. 1 “ Estimating the Social Costs of National Economic Policy. Implications for Mental and Phys ical Health and Criminal Aggression.” A study prepared for the use of the Joint Economic Com mittee, October 26, 1976. 2 Personal accounts are related in Employment-Unemployment. A hearing before the Joint Economic Committee, October 8, 1982. (1) 2 number of weeks he or she has been out of work. Time series data on total weeks of unemployment are summarized in Table 1 for recent years and months. TABLE 1.—MEASURESOFUNEMPLOYMENT, 1969-83 Period 1969............................................ ........................... 1970............................................ ........................... 1971............................................ ........................... 1972............................................ ........................... 1973............................................ ........................... 1974............................................ ........................... 1975............................................ ........................... 1976............................................ ........................... 1977............................................ ........................... 1978............................................ ........................... 1979............................................ ........................... 1980........................................................................ 1981........................................................................ 1982............................................. .......................... July 1981...................................... ........................... November 1982 ............................. .......................... December 1982 ............................. ........................... January 1983................................. .......................... February 1983 ............................... .......................... March 1983.............................................................. April 1983..................................... .......................... May 1983..................................... ........................... Civilian unemployment rate (percent) 3.5 4.9 5.9 5.6 4.9 5.6 8.5 7.7 7.1 6.1 5.8 7.1 7.6 9.7 7.2 10.7 10.8 10.4 10.4 10.3 10.2 10.1 Number unemployed by duration of unemployment (thousands) Total 2,832 4,093 5,016 4,882 4,365 5,156 7,929 7,406 6,991 6,202 6,137 7,637 8,273 10,678 7,854 11,906 12,036 11,446 11,490 11,381 11,328 11,192 27-51 weeks 78 152 342 317 199 240 780 704 523 330 278 491 604 952 581 1,060 1,205 1,320 1,386 1,505 1,457 1,418 52 weeks and over 55 83 177 249 144 141 423 644 505 318 257 329 559 825 533 1,063 1,197 1,413 1,446 1,473 1,504 1,548 Mean duration of unemploy ment (weeks) Total weeks of unemploy ment (millions) 7.8 8.6 11.3 12.0 10.0 9.8 14.2 15.8 14.3 11.9 10.8 11.9 13.7 15.6 14.0 17.3 18.0 19.4 19,0 19.1 19.0 20.4 22.1 35.2 56.7 58.6 43.6 50.5 112.6 117.0 100.0 73.8 66.3 90.9 113.3 166.6 110.0 206.0 216.6 222.1 218.3 217.4 215.2 228.3 Note— Monthly data seasonally adjusted, except the numbers unemployed for 27-51 weeks and 52 weeks and over are unadjusted, because they are not published separately on a seasonally adjusted basis. 3 4 This measure reveals a current labor market picture much worse than that shown by the conventional measures, and one much more severe than the situation in the 1973-75 recession. The cur rent recession, so soon after the 1980 recession, has caused much more labor market distress than many may have believed. In July 1981, at the beginning of this recession, the average length of un employment for the 7.85 million then unemployed was 14.0 weeks. Thus, the total number of weeks of unemployment was 110 million. In May 1983 the number unemployed was 11.19 million, and the average duration of unemployment was a record 20.4 weeks, yield ing a total of 228.3 million weeks of unemployment. Between July 1981 and May 1983 the total number of weeks of unemployment rose by 108 percent, the combined effect of a 43 percent increase in the number of unemployed, and a 46-percent rise in the average length of unemployment. This index reached a record level in May 1983. The civilian unemployment rate, which reached a 16 year low in 1969, nearly tripled between 1969 and May 1983, rising from 3.5 percent to 10.1 percent. But this greatly understates the rise in labor market distress. The total number of weeks of unemployment rose by 933 percent, the combined effect of a 295 percent rise in the number of unemployed, and a 162 percent increase in the mean du ration of unemployment. The number out of work for a year or more rose from 55,000 in 1969 to a record 1.548 million in May 1983. D e m o g r a p h ic B r e a k d o w n Various measures of unemployment in 1982 are compared by race, sex, age, industry, and occupation in Tables 2, 3, 4, and 5. As shown in Table 2, the two groups with above average unemploy ment rates last year, men and black-and-other, also experienced above average mean durations of unemployment, widening overall sex and race discrepancies in labor market distress. Black males were particularly hard hit—they accounted for 7 percent of the ci vilian labor force, 12 percent of the total number unemployed, and 16 percent of the total weeks of unemployment. White females ac counted for 37 percent of the civilian labor force, 32 percent of the total number unemployed, and 26 percent of the total weeks of un employment. The differences between races will persist even as we move into an economic recovery, though the mean durations of white and black-and-other unemployment (identical in 1972) may move closer together. The differences between sexes will decline if the male unemployment rate falls more rapidly than the female unemployment rate in the recovery. The mean duration of male unemployment exceeded that for females by a record 4.0 weeks in 1982; this gap will shrink, but will be well above the minimum dif ference of 1.2 weeks which prevailed in 1969. 5 TABLE 2 — MEASURES OF UNEMPLOYMENT BY RACE AND SEX, 1982 Civilian unemploy ment rate (percent) Race, sex1 Group percentage of total Civilian labor force (millions) Number unemployed (millions) Mean duration of unemploy ment (weeks) Total weeks of unemploy ment (millions) Civilian labor force Number unemployed Total weeks of unemploy ment White: Male........................ Female..................... 8.8 8.3 55.133 41.010 4.846 3.395 16.6 12.7 80.4 43.1 50 37 45 32 48 26 Total..................... 8.6 96.143 8.241 15.0 123.6 87 77 74 Black and other: Male........................ Female...................... 18.2 16.4 7.317 6.745 1.334 1.104 19.8 15.4 26.4 17.0 7 6 12 10 16 10 Total..................... 17.3 14.061 2.437 17.8 43.4 13 23 26 Total male..................... Total female.................. 9.9 9.4 62.450 47.755 6.179 4.499 17.3 13.3 106.9 59.8 57 43 58 42 64 36 9.7 110.204 10.678 15.6 166.6 100 100 100 Total ................ x ln the 1980 Census, 83 percent of the black and other civilian population, 16 years and over, were black; the remainder were primarily American Indians, Alaskan Natives, and Asians and Pacific Islanders. Unlike race and sex differences, for which higher unemployment rates were exacerbated by longer durations of unemployment, dis crepancies between age groups in the rate of unemployment in 1982 were offset to some degree by differences in the mean dura tion of unemployment, as shown in Table 3. Teenage workers had the highest unemployment rate, but the lowest mean duration of unemployment; they accounted for 8 percent of the civilian labor force, 19 percent of the unemployed, and 12 percent of the total weeks of unemployment. On the other hand, workers 55 and over had the lowest unemployment rate, but the highest mean duration of unemployment; they accounted for 14 percent of the civilian labor force, 7 percent of the unemployed, and 9 percent of the total weeks of unemployment. TABLE 3 — MEASURES OF UNEMPLOYMENT BY AGE, 1982 Age Civilian unemploy ment rate (percent) Civilian labor force (millions) Number unemployed (millions) Mean duration of unemployment (weeks) Total weeks of unemployment (millions) Group percentage of total Civilian labor force Number unemployed Total weeks of unemploy ment 16 to 19............................ 20 to 24............................ 25 to 34............................ 35 to 44............................ 45 to 54............................ 55 to 64............................ 65 and over......................... 23.2 14.9 9.7 6.9 5.7 5.4 3.5 8.526 16.081 31.185 22.431 16.889 12.062 3.030 1.977 2.392 3.037 1.552 0.966 0.647 0.107 10.4 14.5 16.7 18.0 18.9 19.5 17.0 20.6 34.7 50.7 27.9 18.3 12.6 1.8 8 15 28 20 15 11 3 19 22 28 15 9 6 1 12 21 30 17 11 8 1 Total............................ 9.7 110.204 10.678 15.6 166.6 100 100 100 The occupational and industrial breakdowns in Tables 4 and 5 in dicate that those groups with above average unemployment rates in 1982 also had above average durations of unemployment, accen tuating the overall differences between groups. Blue-collar workers 6 comprised 31 percent of the labor force, but incurred 46 percent of total unemployment and 52 percent of the total weeks of unem ployment. White-collar workers accounted for 51 percent of the labor force, but 26 percent of the total unemployed and 25 percent of total weeks of unemployment. On an industry basis, construction and durable goods manufacturing were hardest hit, suffering above-average durations of unemployment in addition to their above-average unemployment rates. TABLE 4.— MEASURES OF UNEMPLOYMENT BY OCCUPATION, 1982 Civilian unemploy- Occupation (percent) Group percentage of total Civilian labor force (millions) Number unemployed (millions) Mean duration of unemploy ment (weeks) Total weeks of unemploy ment (millions) Civilian labor force Number unemployed Total weeks of unemploy ment White-collar workers.............. 4.9 56.159 2.767 14.8 41.0 51 26 25 Professional and managerial................... Sales workers................... Clerical workers................ 3.4 5.6 7.0 29.459 6.929 19.771 0.996 0.388 1.384 15.8 14.7 14.0 15.7 5.7 19.4 27 6 18 9 4 13 9 3 12 Blue-collar workers............... 14.2 34.561 4.904 17.5 85.8 31 46 52 Craft and kindred workers... Operatives, except transport...................... Transport equipment operatives..................... Nonfarm laborers............... 10.2 13.696 1.397 16.8 23.5 12 13 14 17.7 11.486 2.033 17.2 35.0 10 19 21 11.7 18.5 3.838 5.541 0.449 1.025 19.7 17.9 8.8 18.3 3 5 4 10 5 11 Service workers..................... Not elsewhere classified1 10.6 33.3 15.340 4.144 1.626 1.381 14.3 11.9 23.3 16.5 14 4 15 13 14 10 Total........................ 9.7 110.204 10.678 15.6 166.6 100 100 100 1 These figures were estimated as a residual, thus they may not be accurate. TABLE 5.— MEASURES OF UNEMPLOYMENT BY INDUSTRY, 1982 Industry1 Civilian unemploy ment rate (percent) Civilian labor force (millions) Number unemployed (millions) Mean duration of unemploy ment (weeks) Total weeks of unemploy ment (millions) 2.9 17.4 Group percentage of total Number unemployed Total weeks of unemploy ment 2 5 2 10 2 10 Civilian labor force Agriculture........................... Construction......................... 14.7 20.0 1.769 5.325 0.260 1.065 11.3 16.3 Manufacturing....................... 12.3 22.594 2.777 18.1 50.3 21 26 30 Durable goods................... Nondurable goods.............. 13.3 10.8 13.474 9.120 1.792 0.985 19.2 16.0 34.4 15.8 12 8 17 9 21 9 Transportation and public utilities............................ Wholesale and retail trade..... Finance and service industries......................... No previous work experience... Not elsewhere classified2 ..... 6.8 10.0 6.500 20.770 0.442 2.077 18.2 14.0 8.0 29.1 6 19 4 19 5 17 6.9 11.1 6.2 32.478 10.721 10.047 2.241 1.190 0.626 15.0 12.5 16.6 33.6 14.9 10.4 29 10 9 21 11 6 20 9 6 Total............................ 9.7 110.204 10.678 15.6 166.6 100 100 100 1 Wage and salary workers only. 2 These figures were estimated as a residual, thus they may not be accurate. 7 Overall, racial, sexual, occupational, and industrial differences in unemployment rates were exacerbated by differences in the mean durations of unemployment in 1982. However, differences between age groups in unemployment rates were offset to some degree by differences in the average length of unemployment. D u r a t io n of U n e m p l o y m e n t Monthly unemployment information is obtained from the Census Bureau's Current Population Survey (CPS) of approximately 60,000 households. Respondents to this survey are asked about the length of time each unemployed person in the household has been out of work. This information is summarized by the Bureau of Labor Sta tistics in categories of 1-4 weeks, 5-10 weeks, 11-14 weeks, 15-26 weeks, 27-51 weeks, and 52 or more weeks, and is presented (on a seasonally unadjusted basis) for May 1983 in Table 6.3 The estimat ed mean duration of unemployment for each group has been used to obtain the distribution of total weeks of unemployment by dura tion of unemployment. TABLE 6.— NUMBER UNEMPLOYED AND TOTAL WEEKS OF UNEMPLOYMENT, BY DURATION OF UNEMPLOYMENT, MAY 1983 [Not seasonally adjusted] Weeks of unemployment Number unemployed (millions) Mean duration of unemployment 1 (weeks) Total weeks of unemploy ment (millions) Group percentage of total Number unemployed Total weeks of unemploy ment I to 4....................................................................................... 5 to 10..................................................................................... I I to 14................................................................................... 15 to 26................................................................................... 27 to 51................................................................................... 52 and over............................................................................... 3.368 1.717 0.735 1.979 1.418 1.548 2.2 7.0 12.3 19.5 36.0 75.3 7.410 12.019 9.041 38.591 51.048 116.568 31 16 7 18 13 14 3 5 4 16 22 50 Total............................................................................. 10.765 21.8 234.677 100 100 ! By interpolation for the first 5 classes. The mean duration for the sixth class (52 + ) was found by dividing total weeks of unemployment for this group (calculated as the residual by subtracting the sum of total weeks for the first 5 classes from the total) by the number unemployed in this group. 3 Information for these 6 categories is published only for annual data since 1967 and for unad justed monthly data. For the seasonally adjusted monthly data, all quarterly data, and annual data before 1967, the 5-10 week and 11-14 week categories are combined, as are the 27-51 week and 5 2 + week categories, thus yielding 4 classes: 1-4 weeks, 5-14 weeks, 15-26 weeks, and 27 + weeks. 8 In May 1983, 31 percent of the unemployed were out of work for 4 weeks or less, but they accounted for only an estimated 3 percent of total weeks of unemployment. At the other end of the distribu tion, 14 percent of the unemployed were out of work for 52 weeks or longer, but they accounted for 50 percent of total weeks of un employment. In May, 27 percent of the unemployed were out of work for 6 months or more, but this group bore 72 percent of the labor market distress, as measured by total weeks of unemploy ment. C y c l ic a l R ecord The number unemployed and the mean duration of unemploy ment both rise in periods of weak economic activity—the correla tion coefficient between the average annual values of these two components of this index for 1948-82 is 0.61. Because this index is the product of two positively correlated series, it is subject to more cyclical variability than either component, as may be shown by comparing the respective coefficients of variation.4 This measure, total weeks of unemployment, has been calculated on a monthly basis back to 1948. The Bureau of Economic Analysis classifies the number unemployed as a leading indicator at cyclical peaks and a lagging indicator at troughs. The mean duration of un employment is a lagging indicator at both peaks and troughs.5 This implies that the product of these two series should be a lagging in dicator at recession troughs. This expectation is borne out—the index reached its maximum on average 5.6 months after the reces sion troughs for the seven recessions since 1948 (excluding the re cession which began in July 1981). This pattern appears to have continued in 1982-83, with the recession trough in November or December 1982, and total weeks of unemployment probably reach ing a peak in May 1983. At cyclical peaks the leading indicator characteristics of the number unemployed more than offset the lag ging indicator characteristics of the mean duration of unemploy ment; on balance the index has a mean lead time of 3.4 months. R elated M easures Other studies have discussed additional measures of underutiliza tion of labor.6 One measure, labor force time lost, was recommend ed by the Joint Economic Committee in 1955, and has been pub lished monthly by BLS since 1962. This indicator is expressed as a percentage of potentially available aggregate hours. It is computed by assuming that unemployed persons looking for full-time work lost an average of 37.5 hours; that those looking for part-time work lost the average number of hours actually worked by voluntary part-time workers during the survey week; and that persons on part time for economic reasons lost the difference between 37.5 hours and the actual number of hours they worked. The assump 4 The coefficient of variation is the standard deviation divided by the mean. This measure has a value of 0.46 for the number unemployed, 0.20 for the mean duration of unemployment, and 0.61 for the total weeks of unemployment. 5 Business Conditions Digest, April 1983, p. 62. 6 Several measures are discussed in Curtis L. Gilroy, “Supplemental measures of labor force underutilization,” Monthly Labor Review, May 1975, pp. 13-23. 9 tion that the unemployed looking for full-time work lost 37.5 hours of work has been criticized as being too low, but this charge has less validity today, with the trend toward a shorter work week. A second set of measures involves three adjustments to express employment, unemployment, and unemployment rates on a “ full time equivalent” basis. The first adjustment weights part-time workers and the unemployed seeking part-time work by the ratio of average weekly hours of workers on part-time schedules to aver age weekly hours of workers on full-time schedules. This would yield an unemployment rate slightly below the offical rate, because the unemployment rate among part-time workers, which receives less weight in this measure, is greater than the unemployment rate for full-time workers. The second adjustment, recommended in 1955 by the Joint Economic Committee, has now been incorporated into the alternative unemployment measure U-6, published month ly by BLS. It counts workers on part time for economic reasons as partially employed and partially unemployed. It is somewhat simi lar to the labor force time lost measure, but one author believes that “ the joint impact of unemployment and involuntary part-time unemployment is estimated in a more comprehensive manner than in . . . the labor force time lost measure.” 7 This adjustment yields a significantly higher unemployment rate—in May 1983 measure U-6 was 12.9 percent, in comparison with the official civilian un employment rate of 10.1 percent. The third adjustment adds dis couraged workers to the number unemployed and under-employed, and is now reported quarterly by BLS as alternative unemploy ment measure U-7. It yields the highest unemployment rate—15.0 percent in the first quarter of 1983, compared with the official civil ian rate of 10.3 percent. A third measure was developed by Geoffrey Moore.8 It comes closest to the index analyzed above. Moore proposed multiplying the unemployment rate by the mean duration of unemployment— this is equivalent to division of total weeks of unemployment by the size of the labor force. For 1982 this calculation yields 1.5 weeks, or 7.6 days. This index shows that if average unemployment during the year were distributed evenly among all persons in the labor force, each worker would have been jobless for 7.6 days.9 C o n c l u s io n The usual indicators of unemployment—the unemployment rate, the number unemployed, the average length of unemployment— consider one dimension of the problem at a time. Total weeks of unemployment, the product of the number unemployed and the mean duration of unemployment, is a measure of labor market dis tress which combines two of these dimensions. This new index more accurately measures the cyclical deterioration in our employ 7 Gilroy, p. 17. 8 Geoffrey H. Moore, “How Full Is Full Employment,” American Enterprise Institute for Public Policy Research, 1973, pp. 17-22. 9 The measure proposed in this study, total weeks of unemployment, intentionally does not adjust for the size of the labor force. Such an adjustment complicates the measure, makes it more difficult to interpret, and does not measure aggregate labor market distress as well. The unemployed find little or no comfort in the fact that there are many employed in today’s large labor force. 10 ment situation, and it provides a basis for comparing the relative shares of labor market distress borne by various demographic and economic groups of workers. O
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