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March 21,1975

Tin® JoMei
The unemployment rate has risen
above the 8-percent level and the
actual number of unemployed has
reached 7V2 million, both for the
first time since the nation entered
World War II. But neither of these
two numbers tells very much about
the characteristics of the jobless,
because there is no "typical" unem­
ployed person. Jobless rates cur­
rently range from 3 percent for
professional and technical workers
to almost 40 percent for nonwhite
teenagers, indicating the wide
variance in unemployment for d if­
ferent groups in the labor force.
Yet in terms of sheer numbers, the
most likely person to be unem­
ployed today is the prime member
of the work force— an adult male
over 25 years of age.
Jobless categories
The present composition of unem­
ployment reflects the massive shift
in the structure of the civilian labor
force which has occurred in the past
two decades. In the late 1950's,
adult males accounted for a little
over 58 percent of the labor force,
but by 1973 their share of the total
had fallen to 48 percent. (Their
declining labor-force participation
is due variously to early retirement,
a higher rate of disability retire­
ment, and other factors such as a
relatively low level of educational
achievement among older workers
which places them at a severe dis­
advantage in today's labor market.)
Not quite two-thirds of the growth
in the labor force during the 1958-

73 period was accounted for by
adult women and 20-24 year olds
of both sexes.
Adult males generally are heavily
exposed to the danger of unem­
ployment in recession periods, be­
cause of their concentration in two
major cyclical industries, construc­
tion and manufacturing. In earlier
recessions, they accounted for
nearly one-half of the total number
of unemployed. But now that adult
men make up a smaller percentage
of the labor force, a larger share of
the burden falls on other demo­
graphic groups. This February,
adult males represented only about
29 percent of the unemployed, and
the remainder was divided in almost
equal proportions among adult
females, young adults of both sexes,
and teenagers of both sexes.
In the aggregate, of course, there is
more unemployment among adult
men because there are more of
them in the labor force. This is true
although the unemployment rate
for that group in February was only
5 percent— high for that group but
quite low in relation to the rate for
other components of the labor
force. For example, the jobless rate
in February for 20-24 year olds was
13.3 percent, and for teenagers it
was 19.9 percent. Thus, the prob­
ability of unemployment was more
than 2 V2 times greater for 20-24
year olds and 4 times greater for
teenagers than it was for adult
males. Also, the unemployment

(continued on page 2)

Opinions expressed in this newsletter do not
necessarily reflect the views of the management of the
Federal Reserve Bank of San Francisco, nor of the Board
of Governors of the Federal Reserve System.

rate for white workers was 7.4
percent, in contrast to a 13.5percent rate for nonwhite
This variability among the levels of
unemployment rates evolved over
the past two decades. The reasons
for it are several fold. For one
thing, teenagers and young adults
may lack marketable skills or a his­
tory of work experience. Adult
women re-entering the labor force
after an absence of some years
may find their skills somewhat
rusty or even obsolete. There are
also structural problems, such as
mobility and imperfect information
as to job opportunities. Finally, and
regrettably, there is still an element
of discrimination in the job market,
despite the best efforts of govern­
ment and business leaders to
eliminate it.
Attachment to labor force
The civilian labor force is a dynamic
and changing population. There is
a constant flow into and out of the
labor force as some persons (usually
young adults and teenagers) seek
their first jobs and as older workers
retire from the work force. In be­
tween these extremes are persons

DigifJZed for FRASER

who re-enter the labor force after
prolonged absences— generally
women with children who worked
prior to marriage. Consequently,
the pool of unemployed persons is
not limited to those who have lost
or left their last jobs.
In late 1973— a period of labor
market tightness, with a 43 -per­
cent average unemployment rate—
total unemployment was divided
roughly equally between job losers
and job leavers (on the one hand)
and re-entrants and new entrants to
the labor force (on the other).
However, the story was different
for the 31 million persons added
to the jobless rolls between October
1973 and February 1975. Job losers
accounted for 78 percent of this
group— and job leavers for less
than 2 percent— while re-entrants
and new entrants amounted to 20
percent of the total.
A fairly pronounced cyclical pat­
tern is evident from these figures.
As might be expected, the number
of job losers grows in numbers and
in relative proportion as the state of
the economy worsens. In contrast,
persons joining or rejoining the
labor force are heavily dependent
upon the growth of the economy
and the accompanying increase in
the number of jobs, so they repre-

sent a relatively greater share of the
jobless rolls in an expanding
economy. Also, there tends to be
an inverse relation of job leavers
to the unemployment rate. When
labor markets are tight, workers
feel confident of their ability to find
alternate employment, so they may
feel somewhat more ready to quit
their present jobs and look for
others. But when jobs become
scarce, workers tend to stay put in
view of the higher search costs
White collar recession?
A striking feature of the present
recession is the decreased security
of white-collar employment.
Unemployment rates for all whitecollar categories are currently at the
highest levels since this type of
information was first collected in
1958. In that recession year, the
white-collar unemployment rate
reached 31 percent, compared
with a 12-percent rate for bluecollar workers. In contrast, the
white-collar rate now stands at a
record 41 percent, while the blue/2
collar rate of 11 percent remains
below its earlier peak. Jobless rates
in all white-collar categories— 3
percent for professional-technical
workers, less than 3 percent for
managers and administrators, 5
percent for sales workers, and 6

percent for clerical workers— might
appear attractive to blue-collar
workers, but are still the highest
in the two-decade history of the
The rising trend of white-collar
joblessness reflects in part the
growth of structural unemployment
among professional and technical
workers. This group, which includes
engineers and physical scientists,
was hard hit by the aerospace
shake-out of 1968-69 and the
recession of 1970-71, and its job
situation was still weak when the
latest recession hit. Rising unem­
ployment among sales workers
reflects the extended decline in the
physical volume of retail sales since
mid-1973, occasioned in part by the
inflation-induced fall in consumer
purchasing power over that period.
Increased unemployment of man­
agers and clerical workers mean­
while reflects businesses' wide­
spread efforts to cut such fixed costs
as corporate staff, most apparently
in the auto business, but elsewhere
as well. Thus it appears that whitecollar workers, like their blue-collar
brethren, are becoming more sub­
ject to the vicissitudes of the
business cycle.
Herbert Runyon

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■ J!|e 3 'O D S p U E J J U B S

a iv d

n p jn g © § ® ^ [

(D ollar amounts in m illions)
A m ount
O utstanding
3 /5 /7 5

2 /2 6 /7 5

Change from
year ago
D o lla r

Loans (gross, adjusted) and investments*
Loans (gross, adjusted)— total
Security loans
Commercial and industrial
Real estate
Consumer instalm ent
U.S. Treasury securities
O ther securities
Deposits (less cash items)— to ta l*
Demand deposits (adjusted)
U.S. G overnment deposits
Time deposits— to ta l*
States and p o litica l subdivisions
Savings deposits
O ther tim e deposits^
Large negotiable CD's


+ 1 ,852
+ 1 ,412
+ 1 ,460
+ 138
+ 326
+ 114
+ 1,303
+ 464
+ 140
+ 130
+ 170
+ 130
+ 156

+ 6,625
+ 6,851
+ 1,420
+ 2,646
+ 1,214
+ 693
- 309
+ 9,515
+ 808
+ 8,088
+ 174
+ 985
+ 6,375
+ 5,506

Weekly Averages
of Daily Figures

W eek ended
3 /5 /7 5

Selected Assets and Liabilities
Large Commercial Banks

W eek ended
2 /2 6 /7 5




year-ago period

Member Bank Reserve Position
Excess Reserves
Net free ( + ) / Net borrow ed ( —)







Federal Funds— Seven Large Banks
+ 1,528

+ 1,583






+ 1,677


Interbank Federal fund transactions
Net purchases ( + ) / Net sales ( —)
Transactions of U.S. security dealers
Net loans ( + ) / Net borrow ings ( —)

*lncludes items not shown separately. {In d ivid u a ls, partnerships and corporations.
Information on this and other publications can be obtained by calling or writing the Public
Information Section, Federal Reserve Bank of San Francisco, P.O. Box 7702, San Francisco
* Phone (415) 397-1137.