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Who Are the Unemployed? A Chartbook U.S. Department of Labor Bureau of Labor Statistics 1977 Bulletin 1965 Who Are the Unemployed? A Chartbook U.S. Department of Labor Ray Marshall, Secretary Bureau of Labor Statistics Julius Shiskin, Commissioner 1977 Bulletin 1965 For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 Stock No. 029-001-02119-4 Preface Information in this chartbook is derived almost entirely from the Current Population Survey, con ducted monthly by the Bureau of the Census for the Bureau of Labor Statistics. Readers interested in keeping informed on current devel opments in the U.S. labor force can find up-to-date statistics in regular publications of the Bureau of Labor Statistics. Labor force data are published monthly in Employ ment and Earnings and the Month ly Labor Review, both available by subscription from the Superintend ent of Documents, U.S. Govern ment Printing Office, Washington, D.C. 20402. Special analyses are published in the Monthly Labor Review as articles and Special Labor Force Reports. Reprints are available, as long as supplies last, from the Bureau of Labor Statistics or any of its regional offices. This chartbook was prepared in the Office of Current Employment Analysis, Division of Employment and Unemployment Analysis, John E. Bregger, Chief, by Robert N. Ray, under the direction of Deb orah Pisetzner Klein. Material in this publication is in the public domain and may be re produced without permission of the Federal Government. Please credit the Bureau of Labor Statis tics and cite the name and number of the publication. Contents In troduction.......................................................................................................... 1 Chart 1. Percent distribution of the population 16 years and over by employment status, I976 annual averages......................................................................... 3 Chart 9. Chart 10. Part I: Characteristics of the U n em p lo yed .............................................................. 5 Chart 2. Percent distribution of the civilian labor force and the unemployed by selected characteris tics, I976 annual averages............................................ 7 Chart 3. Percent distribution of the civilian labor force and the unemployed by age and sex, selected years, I950-76................................................................. 9 Chart 4. Unemployment rates by age and sex, I976 annual averages........................................................................ 11 Chart 5. Unemployment rates tor white, black, and Hispan ic origin workers by sex and age, I976 annual averages.......................................................................13 Chart 6. Unemployment rates for persons 25 years of age and over by educational attainment, March I976................................................15 Chart 7. Unemployment rates for household heads by family status, I976 an nual averages............................................................... 17 Chart 8. Percent distribution of the unemployed by mar Chart 11. Chart 12. Chart 13. Chart 14. Chart 15. Chart 16. ital status, I956 and I976 annual averages.................................. ....................19 Unemployment rates by major nonfarm occupa tion, I976 annual av erages .................................................. ....................21 Unemployment rates by age for Vietnam-era vet erans and nonveterans, I976 annual averages........................... Range of unemployment mea sures based on varying definitions of unemploy ment and the labor force, I976 annual averages.............................................. ....................25 Percent of civilian labor force unemployed be fore and after seasonal adjustment, I976.................................. ....................27 Employment status of the unemployed during preceding and following months................................................ .................... 29 Average monthly unemployment and total number of persons with at least one spell of un employment during I975..................................................... ..................... 31 Methods used by jobseekers, I976 annual averages.............................................. ................... 33 Proportion of the unemployed seeking full- and part-time work, Chart 17. Chart 18. Chart 19. Chart 20. Chart 21. Chart 22. . 1963 and 1976 annual averages....................... 35 Percent distribution of persons unemployed less than 5 weeks and more than 26 weeks by selected characteris tics, I976 annual averages................................................................... 37 Unemployed persons by family relationship and presence of employed family member(s), I976 annual averages....................................................... 39 Total unemployment and insured unemploy ment in I973,1975, and I976.............................................................................41 Unemployment rates in poverty and nonpoverty areas by race, I976 an nual averages.............................................................. 43 Unemployment rates by State, I976 annual averages......................................... 45 Unemployment rates in eight industrialized nations, quarterly averages, I970-76.........................................................................47 Part II: The Cyclical Behavior of U n em p lo ym en t ................................................................................49 Chart 23. Unemployment rate, I948-76 ....................................................................... 51 Chart 24. Chart 25. Chart 26. Chart 27. Chart 28. Chart 29. Chart 30. Chart 31. Unemployment rate and the average duration of unemployment, I957-76.............................................. 53 Percentage distribution of the unemployed by status when entering unemployment stream, quarterly averages, I973-76......................................................................... 55 Unemployment rates of wage and salary workers by major nonagricultural industry, selected quar ters, I973,1975, and I976 ............................................ 57 Unemployment rates of major occupational groups, annual aver ages, I973,1975, and I976.............................................................................. 59 Duration of unemployment, se lected quarters, I974, I975, and I976 .............................................................. 61 Unemployed persons and the number working part time due to eco nomic reasons, I969-76............................................. 63 Number of discouraged workers and unemploy ment rate, quarterly averages, 1967-76.......................................................................... 65 Employment-population ratios by sex and age, 1958-76 ....................................................................... 67 A ppendix: Current Population S u r v e y ...................................................... 68 Selected Bibliography .................................................................... 69 Introduction Every civilian in the noninstitutional population aged 16 years and over is classified in the Cur rent Population Survey as either employed, unemployed, or not in the labor force. The sum of the em ployed and unemployed consti tutes the civilian labor force. The majority of the employed are persons who worked during the survey week. Persons also are counted as employed if they had a job but did not work during the sur vey week because of such reasons as a strike, illness, or vacation. Most of the unemployed are per sons who did not work during the survey week but were available for work and made specific attempts to find a job. However, the cate gory also includes persons on lay off and those waiting to begin a new job within 30 days. Most persons classified as not in the labor force are homemakers, students, or retired people. Also in cluded are the small but important number of persons who want to work but are not looking for a job because they feel it would be impossible to find one—persons who are frequently referred to as “ discouraged workers.” 1 Three Out of Every Five Americans 16 Years of Age and Over Were in the Civilian Labor Force in 1976 Persons 16 years and over, I976 annual averages Total noninstitutional population.......................................................................... 156,048,000 Armed Forces.........................................................................2,144,000 Civilian noninstitutional population......................................................................153,904,000 Civilian labor force...........................................................94,773,000 Employed................................................................... 87,485,000 Unemployed.................. 7,288,000 Unemployment rate (un employed as percent of civilian labor force).................................................................................7.7 Not in labor force........................................................... 59,130,000 Discouraged workers......................................................................... 911,000 Chart 1 . Percent distribution of the population 16 years and over by employment status, 1976 annual averages Arm ed forces Civilian em ployed Civilian labor force Unem ployed Part I: Characteristics of the Unemployed Among the unemployed are men and women, young and old, white and black, skilled and unskilled. In short, all population groups are af fected. However, young people, high school dropouts, blue-collar workers and blacks are dispropor tionately represented among the unemployed. Many of the unem ployed, have the responsibility for the support of other persons. Oth ers among the unemployed, such as some teenagers, only want jobs to earn spending money. In addition to persons who have lost their jobs, the unemployed in cludes persons who left their jobs voluntarily and persons who are entering the labor force for the first time or reentering after a period of absence. Moreover, the unem ployed labor force is constantly changing, as many persons remain jobless for only a short period of time while others search for work for many months before becoming employed or dropping out of the labor force. The Composition of the Unemployed Labor Force Differs from the Composition of the Labor Force as a Whole Compared to the labor force as a whole, the unemployed work force is disproportionately young, black, female, and blue collar. Chart 2. Percent distribution of the civilian labor force and the unemployed by selected characteristics, 1976 annual averages Percent “ 5 5 and over 100 - 90 - 80 - 70 - 60 - 50 - 40 - 30 - 20 - 10 2 5 to 5 4 Civilian labor force 1 6 to 2 4 Unem ployed _ Age Race Sex Occupation 0 http://fraser.stlouisfed.org/ 8 Federal Reserve Bank of St. Louis Teenagers and Adult Women Now Make up More Than Half of the Unemployed Since 1950, the increasing partici pation of adult women in the labor force and the slowly declining par ticipation of adult men have been reflected in an increase in the pro portion of women and a drop in the proportion of men among the un employed. Chart 3 . Percent distribution of the civilian labor force and the unemployed by age and sex, selected years, 1950-76 Civilian labor force Unemployed 1950 1955 1960 1970 1976 Unemployment Rates Are Highest for Young People Unemployment Is highest among young people and then diminishes with increasing age through the central age groups. There is little difference in unemployment rates between men and women in the younger and older age groups, but in the central age groups women have substantially higher rates than men. Chart 4. Unemployment rates by age and sex, 1976 annual averages Percent of civilian labor force unemployed 15 10 5 M en W omen 0 1 6 to 1 9 2 0 to 2 4 2 5 to 3 4 3 5 to 4 4 4 5 to 5 4 5 5 to 6 4 6 5 and over Age 11 12 Unemployment Rates for Persons of Hispanic Origin Are Below Those for Black Workers but Above Those for Whites Persons of Hispanic origin are the second largest minority group in the Nation. Their overall unemploy ment rate is typically between the rates of whites and blacks. Decen nial census data indicate, however, that there is considerable diversity within the Hispanic-origin popula tio n -pe rso n s of Cuban and South American origin have considerably lower unemployment rates than those of Mexican and Puerto Rican origin. Chart 5. Unemployment rates for white, black, and Hispanic origin workers by sex and age, 1976 annual averages Percent of civilian labor force unemployed 40 30 20 Black Hispanic W hite Both sexes 1 6 to 1 9 years Note: Data on persons of Hispanic origin are tabulated separately without regard to race. Therefore Hispanic workers are also included in the data for w hite and black workers. At th e time of th e 1 9 7 0 census, approximately 9 6 percent of the Hispanic population was white. 13 14 Lower Unemployment Rates Are Associated with Higher Levels of Educational Achievement Obtaining more education sub stantially reduces the likelihood of unemployment. Thus, high school graduates have significantly lower unemployment rates than drop outs. Similarly, persons with 4 years or more of college education have jobless rates sharply lower than those with 1 to 3 years. Chart 6 . Unemployment rates for persons 25 years of age and over by educational attainment, March 1976 Percent of civilian labor force unemployed 10 8 6 4 2 0 8 years of school or less Elementary 9 to 11 years High school 1 to 3 years graduate of college of school High School years or more of college College 15 http://fraser.stlouisfed.org/ 1 6 Federal Reserve Bank of St. Louis Unemployment Is Higher for Female Family Heads Than for Male Family Heads Although the unemployment rate for all workers who head house holds is well below the overall na tional average, there is considera ble variation in unemployment depending on the sex of the house hold head and the presence of rela tives. Those household heads who fit the traditional image—men with families—have relatively low un employment rates. Other male heads who live alone or with per sons other than relatives experi ence much higher joblessness. The highest unemployment rates are for female heads living with relatives, typically those rais ing children on their own. These women are often handicapped by a lack of work experience and train ing, and by their family respon sibilities. Chart 7. Unemployment rates for household heads by family status, 1976 annual averages Percent of civilian labor force unemployed 10 8 - All workers All household heads M en W om en M en W om en Household heads living with Household heads not relatives (family heads) living with relatives 18 A Declining Proportion of the Unemployed Are Married Men The increase in the participation of women and the rapid growth of the teenage labor force have changed the overall composition of the la bor force. As adult men have de clined as a proportion of the labor force, the share of the unemployed who are married men has declined as well. Chart 8. Percent distribution of the unemployed by marital status, 1956 and 1976 annual averages 21% M arried wom en 1956 W idowed, divorced and separated 1976 http://fraser.stlouisfed.org/ 2 0 Federal Reserve Bank of St. Louis Blue-Collar Workers Have Relatively High Unemployment Rates The probability of becoming unem ployed is closely related to the type of work a person does. Whitecollar workers, particularly those in professional and managerial jobs, experience relatively little unem ployment, whereas joblessness among blue-collar workers is rela tively high, particularly among non farm laborers and operatives. Ser vice workers also experience high unemployment rates. Chart 9. Unemployment rates by major nonfarm occupation, 1976 annual averages Percent of civilian labor force unemployed 15 Biue-collar workers Service workers 2 1 Young Veterans Have High Unemployment Rates Young veterans (20 to 24 years of age) constitute a small and declin ing proportion of the Vietnam-era veteran population (16 percent in 1976); they are the only group of veterans whose unemployment rate substantially exceeds that for nonveterans of similar age. This differential is explained by the shorter period young veterans have had to find and establish them selves in jobs than their nonveter an peers. In addition, veterans are eligible for unemployment com pensation which may encourage them to sustain their job search until they find the right job. Differ ences in the incidence of unem ployment between veterans and nonveterans tend to disappear in time as older veterans become as similated into the civilian economy and build up work experience. Chart 10. Unemployment rates by age for Vietnam-era veterans and nonveterans, 1976 annual averages Percent of civilian labor force unemployed 20 15 10 Veterans Nonveterans Total, 2 0 to 3 4 2 0 to 2 4 2 5 to 2 9 3 0 to 3 4 Age 23 http://fraser.stlouisfed.org/ 24 Federal Reserve Bank of St. Louis Unemployment May Be Viewed from Many Different Perspectives Various alternative measures of unemployment are illustrated in this chart. The most restrictive (U-1) includes only the long dura tion unemployed, while the broad est measure of underutilization (U-7) combines discouraged work ers and part-time workers who would like a full-time job with per sons officially classified as unem ployed. In spite of their differ ences, these indicators all tend to move together over the business cycle. Note: U-1 Persons unemployed 1 5 w e e ks or longer as a p ercent of civilian labor force U -2 Job losers as a percent of civilian labor force U -3 Unem ployed household heads as a percent of household head labor force U -4 Unem ployed seekers of full-time jobs as a percent of full-time labor force U -5 T O T A L U N E M P L O Y M E N T AS A P E R C E N T O F CIVILIAN LA B O R FO R C E U -6 S eekers of full-time jobs plus half seekers of part-time jobs plus half total on (including those employed part time for econom ic reasons) (O FF IC IA L M EA SU R E) part time for econom ic reasons as a percent of the number of persons in the civilian labor force less half of the num ber of persons in the part-time labor force U -7 U -6 plus discouraged w orkers Chart 11. Range of unemployment measures based on varying definitions of unemployment and the labor force, 1976 annual averages Note: For further information on the developm ent of these measures, s e e Julius Shiskin, "Em ploym ent and Unemployment: T h e Doughnut or the Hole,” M onthly Labor Review, February 1 9 7 6 . 25 26 http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Unemployment Follows a Predictable Seasonal Pattern Throughout the Year Seasonal ups and downs are caused by the recurring patterns of weather, production schedules, school schedules, and the like. Seasonal adjustment removes these systematic variations ancf provides a clearer picture of under lying economic developments. Thus, after seasonal adjustment, the national unemployment rate declined over the first half of 1976 and rose over most of the second half of the year. Chart 12. Percent Percent of civilian labor force unemployed before and after seasonal adjustment, 1976 10 9 — Unem ploym ent rate, before seasonal adjustment 8 — Seasonally adjusted unemployment rate 7 — Jan. Feb. Mar. Apr. M ay June July Aug. Sept. Oct. Nov. Dec. 27 http://fraser.stlouisfed.org/ 28 Federal Reserve Bank of St. Louis There Is Considerable Turnover in the Ranks of the Unemployed from Month to Month In an average month during 1976 nearly half of the unemployed were new to that situation. Some of them had just entered the labor force in search of a job, while oth ers left or lost a job they had held during the previous month. By the following month, about one-fourth of the unemployed had found a job and one-fifth had left the labor force (to attend school, keep house, go into retirement, etc.) Chart 13. Attending Not in the labor force school Keeping house O ther Unem ployed Employed Employment status of the unemployed during preceding and following months Employment status Num ber unemployed Employment status in previous month in current month in following month Attending school Keeping house O ther Unemployed Employed http://fraser.stlouisfed.org/ 30 Federal Reserve Bank of St. Louis The Number of Persons Experiencing Unemployment During the Year Is Much Greater Than the Average Number Unemployed in Any One Month The total number of persons exper iencing unemployment at any time during the year greatly exceeds the number unemployed at any one time. In 1975 for instance (most re cent data available), the number of different individuals who were un employed at some time or another was 2.7 times the average monthly figure. This was consistent with to tals in past years which have gen erally ranged from to 4 times the average monthly level. Chart 14. Average monthly unemployment and total number of persons with at least one spell of unemployment during 1975 Num ber experiencing unemployment in 1 9 7 5 Total 7 ,8 3 0 ,0 0 0 Average monthly unemployment level, 1 9 7 5 31 32 The Most Widely Used Jobseeking Method Is Applying Directly to Prospective Employers The unemployed use a variety of methods in the search for work. In addition to applying to the employ er directly, the most frequently used methods include public employ ment agencies and newspaper ads. Chart 15. Methods used by jobseekers, 1976 annual averages Percent of jobseekers 0 U sed public employment agency 15 ME! 811111 1 8$p 111’-IflifsLl 30 45 60 8K 1' Used private employment agency Applied directly to employers Asked friends o r relatives Placed or answ ered ads O ther Note: T he percentage using each method totals more than 1 0 0 because many jobseekers used more than one m ethod. 75 One-Fifth of the Unemployed Are Seeking Part-Time Work As the service industries such as trade have grown in importance, a greater proportion of jobs have short workweeks. This, together with the expanding proportion of teenagers and women in the work force, has resulted in an increase during recent years in the propor tion of the unemployed seeking part-time work. Chart 16. Proportion of the unemployed seeking full- and part-time work, 1963 and 1976 annual averages 7 9% 86 % 14% 21% Seeking full-time work 1963 1976 Seeking part-time work 35 http://fraser.stlouisfed.org/ 36 Reserve Bank of St. Louis Federal The Long-Term Unemployed Have Different Characteristics Than the Short-Term Unemployed Compared with persons unem ployed a month or less, persons unemployed for long periods are disproportionately job losers, household heads, and adult men. In addition, they are more likely to be older and to be seeking full-time work. Chart 17. Percent distribution of persons unemployed less than 5 weeks and more than 26 weeks by selected characteristics, 1976 annual averages Percent Teenagers Entrants into the labor force Household heads O ther than Adult men household heads Job losers Unem ployed Adult wom en less than 5 w eeks mmmmmm Unem ployed I 2 7 w eeks I or more Job leavers 37 http://fraser.stlouisfed.org/ 38 Reserve Bank of St. Louis Federal Other Family Members Often Ease the Burden of Unemployment The financial hardship that is usu ally associated with unemploy ment is sometimes eased by the presence of an employed person in the family. About half of all unem ployed male family heads have a person in their family who is em ployed. By contrast, only about one-fifth of jobless female family heads are in households in which a family member is employed. Chart 18. Unemployed persons by family relationship and presence of employed family member(s), 1976 annual averages Unem ployed male family heads Unem ployed fem ale family heads 5 0 .5 % 8 1 .7 % 1 8 .3 % 4 9 .5 % Unem ployed wives Unem ployed relatives of family heads With employed person in family 1 6 .4 % 1 6 .6 % Without employed person in family 8 3 .6 % 8 3 .4 % 39 40 Unemployment Insurance Cushions the Financial Impact of Unemployment for Many Workers Unemployment compensation pro grams are specifically designed to assist experienced workers who lose their jobs by providing a por tion of lost wages. Thus, the pro portion of the jobless receiving un employment compensation is higher in years of high unemploy ment, such as 1975, when job loss increases. Furthermore, beginning in 1975, two federally financed supplemen tary programs extended unemploy ment benefits. One program, Fed eral Supplementary Benefits, pro vides up to 13 additional weeks of federally sponsored benefits dur ing periods of high unemployment to qualified claimants who ex haust their eligibility under per manent programs. A second Feder al program, Special Unemployment Assistance, is a temporary pro gram of assistance during periods of high unemployment for individu als who are not eligible for unem ployment benefits under any State or Federal law. Chart 19. Total unemployment and insured unemployment in 1973, 1975, and 1976 Millions of persons 10 9 Total unemployment 8 Total unemployment 7 Total insured unemployment 6 Total insured 5 unemployment Total unemployment 4 3 Special unemployment assistance Total insured unemployment 2 Federal supplem entary benefits 1 Regular payments 0 1973 Note: 1975 1976 Proportions based on these counts should be used with caution because the two sets of data differ in concept and method of m easurem ent. 41 http://fraser.stlouisfed.org/ 42 Federal Reserve Bank of St. Louis Unemployment Rates Are Highest in Metropolitan Poverty Areas Metropolitan “ poverty areas” — those Census tracts in which at least 20 percent of the residents are poor—generally have a greater incidence of unemployment than nonpoverty areas. Outside the me tropolis, unemployment rates are about the same in poverty and non poverty areas. In all areas, blacks have higher unemployment rates than white workers. Chart 20. Unemployment rates in poverty and nonpoverty areas by race, 1976 annual averages Percent of civilian labor force i n employed 20 15 - 10 5 - W hite Black and other Poverty areas Nonpoverty areas Metropolitan areas Note: Poverty areas Nonpoverty areas Nonmetropolitan areas Designation of poverty areas is based upon 1 9 7 0 decennial census income data. 43 The Northeast and West Have Relatively More Joblessness Than the Rest of the Nation The relatively high unemployment in the industrialized Northeast stems from generally sluggish growth in manufacturing, the re gion’s major economic activity, and a decline in construction em ployment. Factors contributing to high unemployment in the West are the relatively larger numbers of people who migrate into the region looking for jobs, the younger age composition of the population, and the greater prevalence of highly seasonal industries, such as log ging and food harvesting and pro cessing. Chart 21. Unemployment rates by State, 1976 annual averages 8 .5 % and over 6 .5 % to 8 .4 % 4 .5 % to 6 .4 % Less than 4 .5 % 45 The United States and Canada Historically Have Had Higher Unemployment Rates than Other Industrialized Countries Unemployment is not estimated in the same way in all countries nor are the concepts identical from country to country. However, after adjustment to the extent possible for these differences, the United States and Canada have averaged consistently higher unemployment rates than other industrialized countries. Economic, cultural, and political factors have all contrib uted to this pattern. Chart 22. Percent of civilian labor force unemployed Unemployment rates in eight industrialized nations, quarterly averages, 1970-76 10 United S tates— Germ any 1970 1971 1972 1973 1974 1975 1976 Part II: The Cyclical Behavior of Unemployment Unemployment has fluctuated markedly over the post-World War II period, with certain important patterns consistently recurring during slack periods in the econ omy. Even before unemployment begins to rise, the number of hours in the workweek usually declines as producers take the less drastic course of cutting hours rather than laying off workers. As conditions worsen, however, job cutbacks be come more widespread and the proportion of the unemployed who have lost their last job will usually rise. The average duration of unem ployment will also rise as the re cession continues, although initi ally it may be unchanged or even decline as newly unemployed workers lower the average. As high unemployment persists, some workers may become discouraged and stop looking for work entirely. All of these factors tend to be re versed when the economy begins to improve and employers begin to expand their work force. The following charts depict the impact of the recent recession and recov ery. (All data are seasonally ad justed.) 49 Unemployment Peaked at 9.0 Percent in 1975, Well Above the Previous Postwar High of 7.9 Percent Reached in 1949 There have been six business downturns in the post-World War II period, each marked by a high level of unemployment. The downturn during 1973-75 was particularly se vere, as unemployment reached its highest level in 35 years. The level of unemployment continued to be high in the recovery, despite an up surge in jobholding, as an expan sion in labor force growth tended to slow the drop in the unemploy ment rate. Chart 23. Unemployment rate, 1948-76 1950 Note: 1955 1960 1965 1970 1976 Recession periods determined by the National Bureau of Economic Research. 51 http://fraser.stlouisfed.org/ 52 Federal Reserve Bank of St. Louis Movements in the Rate and Duration of Unemployment Are Parallel Over Time Changes in the incidence of unem ployment are affected both by the flow into and out of unemployment and by changes in the length of time persons remain unemployed. These changes tend to move in tandem, but duration changes lag slightly. Thus, when economic conditions worsen, there are in creases in the number of persons losing jobs and in the number unable to find work after entering the labor force. There is also an in crease in the duration of jobless ness among those who enter the unemployment stream. Chart 24. Percent of civilian labor force Unemployment rate and the average duration of unemployment, 1957-76 1 0 .0 unemployed Total unemployment rate 75 5 .0 2 .5 0.0 53 http://fraser.stlouisfed.org/ 54 Federal Reserve Bank of St. Louis Unemployment Increases During Recessions Are Generally Due to Job Cutbacks Although the numbers of job los ers, reentrants, and new entrants into unemployment all rise during recessions, the proportion who have lost their job increases the most. The number of persons who leave a job and become unem ployed is not generally affected by the business cycle. During the fourth quarter of 1976, about half of the unemployed had lost their last job, a very high proportion for an expansionary period. 25. Percentage distribution of the unemployed by status when entering unemployment stream, quarterly averages, 1973-76 t 100 90 80 70 60 50 40 30 SBtt 20 10 0 1973 1974 1975 1976 55 http://fraser.stlouisfed.org/ 56 Federal Reserve Bank of St. Louis Construction and Manufacturing Workers Are Most Affected by the Business Cycle Recessions almost always affect goods-producing industries to a greater extent than service-produc ing industries. This primarily stems from the fact that much of the goods consumed during reces sions come from stored inventor ies that are not replaced by new production. In the case of services, however, consumption and output must coincide since inventories are essentially nonexistent. This pattern is illustrated in the most re cent recession and recovery peri ods in which the strongest cyclical swings have occurred in construc tion and manufacturing. Chart 26. Percent of w age Unemployment rates of wage and salary workers by major nonagricultural industry, selected quarters, 1973, 1975, and 1976 G oods producing Service producing and salary workers unemployed 1 9 7 3 IV 1 9 7 6 IV <3° 57 58 Business Cycles Affect Blue-Collar Workers to a Much Greater Extent Than Other Major Occupational Groups All major occupational groups faced unusually high levels of un employment during the recent downturn. The greatest increase in joblessness, however, was borne by blue-collar workers, particularly operatives—the typical factory assembly line workers. In the post-recession year of 1976, job lessness among blue-collar work ers fell by over 2 percentage points, while the unemployment rates of white-collar and service workers remained virtually unchanged. Nevertheless, the unemployment rate of blue-collar workers was still higher than that of service workers and more than twice that of whitecollar workers. Chart 27. Unemployment rates of major occupational groups, annual averages, 1973, 1975, and 1976 Percent of experienced w orkers unemployed 15 / 10 1973 1975 1976 0 L_ Blue collar 59 http://fraser.stlouisfed.org/ 60 Federal Reserve Bank of St. Louis The Duration of Unemployment Varies Over the Course of the Business Cycle As economic conditions improve, jobs become easier to find and the number of newly unemployed usu ally decreases. A drop in the num ber of newly unemployed persons, however, initially tends to raise the average duration of unemployment and only after a period of time will the presence of more jobs tend to lower the proportion of the unem ployed in the longer duration cate gories. This is illustrated by the current recovery period in which the proportion of the unemployed who were jobless for 15 weeks or longer has been slow to decline de spite a gain of 3 million jobs be tween the third quarter of 1975 and the fourth quarter of 1976. Chart 28. Less than 5 w eeks Duration of unemployment, selected quarters, 1974, 1975, and 1976 52% 5 - 1 4 w eeks 1 5 w eeks and over 1974 I 4 .6 million http://fraser.stlouisfed.org/ Federal62 Reserve Bank of St. Louis The Number of People Who Are Involuntarily on a Reduced Workweek Increases During Recessions and Declines During Recoveries Employed workers who work less than 35 hours a week but want to work full time are classified as on part-time schedules for economic reasons. The increase in their num bers during recessions indicates that, in addition to the unem ployed, other workers are adverse ly affected by downturns in the economy. Chart 29. Thousands Unemployed persons and the number working part time due to economic reasons, 1969-76 9 .0 0 0 8.000 7 .0 0 0 6.000 5 .0 0 0 4 .0 0 0 3 .0 0 0 2.000 1,000 Recession 0 1969 1970 1971 1972 1973 1974 1975 1976 63 64 The Number of Persons Discouraged from Seeking Work Is Also Cyclically Sensitive Discouraged workers are persons who want a job but are not looking for work because they believe it im possible to find work. Because they are not engaged in active job search, they do not meet the job market test and are therefore clas sified as not in the labor force rath er than unemployed. While some of these persons are discouraged because of personal reasons such as age or lack of education, the ma jority simply believe there are no jobs in their line of work or area. It is this category of discouraged workers which normally increases or decreases in line with the unem ployment rate. During the latest recession, the number of discouraged workers citing job market factors as their reason for not seeking work ex ceeded 900,000, the highest level since these statistics were first collected in 1967. By the fourth quarter of 1976, however, their num ber had fallen below 800,000. Chart 30. Number of discouraged workers and unemployment rate, quarterly averages, 1970-76 65 http://fraser.stlouisfed.org/ 6 6 Federal Reserve Bank of St. Louis More Than 55 Percent of the Population Is Employed To help put the preceding material into perspective, this last chart presents the ratio of civilian em ployment to the total noninstitutional population. Over the postWorld War II period, the overall pro portion of the population that is working has remained about steady. There have been, however, offsetting underlying movements, as the ratio for adult men declined (primarily because of earlier retirements) while the ratio for women rose (because of their in creasing propensity to engage in market work). The measure shows that for the past 10 years the economy has been able to consistently generate jobs for more than 55 percent of the population despite short-term cyclical reverses, strong popula tion growth, and substantial changes in the labor force attach ment of various worker groups. Chart 31. Employment-population ratios by sex and age, 1958-76 Percent of population employed 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 67 Appendix: Current Population Survey Statistics on the employment status of the population are de rived from the Current Population Survey. This survey, conducted each month by the Bureau of the Census for the Bureau of Labor Statistics, provides comprehen sive data on the labor force, the employed, and the unemployed, in cluding such characteristics as age, sex, color, marital status, household relationship, occupa tion, and industry for the popula tion 16 years of age and over. For the unemployed, data are obtained on jobseeking methods used, rea sons for unemployment, and the duration of unemployment. Trained interviewers collect the in formation from a sample of about 47,000 households, representing http://fraser.stlouisfed.org/ 6 8 Federal Reserve Bank of St. Louis 461 areas in 923 counties and in dependent cities, with coverage in 50 States and the District of Columbia. The data collected are based on the activity or status re ported for the calendar week in cluding the 12th of the month. Terms used in the chartbook are explained below: who did no work at all during the week are counted as employed if they were temporarily absent from their regular job because of illness, bad weather, vacation, or an indus trial dispute, regardless of whether or not they were paid. Persons with more than one job are counted only once and are classified according to the job at which they worked the Em ployment greatest number of hours during In the household survey every per the week. son who did any work at all for pay or profit during the reference week Unemployment Total unemployment is a measure is counted as employed. Persons of the number of persons without working without pay are counted as employed only if they worked at work during the reference week, least 15 hours during the reference who made specific efforts to find a job within the past 4 weeks and week in a family-operated enter were available for work during the prise (and are then referred to as “ unpaid family workers” ). Persons reference week (except for tempor ary illness). Also included as un employed are those who did not work at all, were available for work, and (a) were waiting to be called back to a job from which they had been laid off, or (b) were waiting to report to a new wage or salary job within 30 days. Labor Force The civilian labor force is the sum of the total number of employed and unemployed people. Members of the Armed Forces are excluded from the civilian labor force by def inition but are added to it to yield the “ total labor force.” Unem ploym ent Rate The unemployment rate is the per cent of a group’s labor force that is unemployed. Selected Bibliography Bregger, John E. “ Unemployment Unemployment. Report 486, Bu Statistics and What They Mean,” reau of Labor Statistics, 1976. Monthly Labor Review, U.S. Department of Labor, Bureau November 1971. of Labor Statistics. Employment Green, Gloria P. “ Measuring Total and Earnings. Monthly publica and State Insured Unemploy tion containing all current labor ment,” Monthly Labor Review, force data. June 1971. ________ __________ The Em ployment Situation. Monthly President’s Committee to Appraise Employment and Unemployment press release. Statistics. Measuring Employ ________ __________ How the ment and Unemployment, 1962. Government Measures Unem Shiskin, Julius. “ Employment and ployment. Report 418,1973. Unemployment: The Doughnut ________ , ________ . Labor Force or the Hole?” , Monthly Labor Developments. Quarterly press Review, February 1976. release. U.S. Department of Labor, Bureau ________ Labor Force and of Labor Statistics; and U.S. Department of Commerce, Bu reau of the Census. Concepts and Methods Used in Labor Force Statistics Derived from the Current Population Survey, BLS Report 463 and Current Pop ulation Report P-23, No. 62,1976. U.S. Department of Labor, Employ ment and Training Administra tion. Employment and Training Report of the President. Pub lished annually. Bureau of Labor Statistics Regional Offices Region i 1603 JFK Federal Building Government Center Boston, Mass. 02203 Phone: (617) 223-6761 Region II Suite 3400 1515 Broadway New York, N.Y. 10036 Phone: (212) 399-5405 Region III 3535 Market Street P.O. Box 13309 Philadelphia, Pa. 19101 Phone: (215) 596-1154 Region IV 1371 Peachtree Street, NE. Atlanta, Ga 30309 Phone: (404) 881-4418 Region V 9th Floor Federal Office Building 230 S. Dearborn Street Chicago, III. 60604 Phone: (312) 353-1880 Region VI Second Floor 555 Griffin Square Building Dallas, Tex. 75202 Phone: (214) 749-3516 Regions VII and VIII* 911 Walnut Street Kansas City, Mo. 64106 Phone: (816) 374-2481 Regions IX and X** 450 Golden Gate Avenue Box 36017 San Francisco, Calif. 94102 Phone: (415) 556-4678 *Regions VII and VIII are serviced by Kansas City **Regions IX and X are serviced by San Francisco U. S. Department of Labor Bureau of Labor Statistics Washington, D.C. 20212 Postage and Fees Paid U.S. Department of Labor Third Class Mail Official Business Penalty for private use, $300 Lab-441 ☆ U.S. GOVERNMENT PRINTING OFFICE : 1977 0-250-056
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