Unemployment Before, During, and After the Great Recession
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Unemployment Unemployment Before, During, and After the Before, During, and After the Great Recession Great Recession Dr. Norm Cloutier, Director UW-Parkside Center for Economic Education 23 rd Annual ASET Meeting Milwaukee, WI
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Unemployment Before, During, and After the Great Recession. Dr. Norm Cloutier, Director UW-Parkside Center for Economic Education 23 rd Annual ASET Meeting Milwaukee, WI December 7, 2012. Measuring Labor Market Performance. Household Survey - PowerPoint PPT Presentation
Transcript of Unemployment Before, During, and After the Great Recession
UnemploymentUnemploymentBefore, During, and After the Great RecessionBefore, During, and After the Great Recession
Dr. Norm Cloutier, DirectorUW-Parkside Center for Economic Education23rd Annual ASET MeetingMilwaukee, WI December 7, 2012
Measuring Measuring Labor Market PerformanceLabor Market Performance
• Household Survey– Current Population Survey of 60,000 hh regarding
labor market behavior in the “reference week.”
• Establishment Survey– Current Employment Statistics (CES) surveys
141,000 businesses and government agencies, 486,000 individual worksites.
Categorizing Categorizing Labor Market BehaviorLabor Market Behavior
• In the Labor Force (civilian, noninstitutionalized, ≥ 16 years-of-age)
– Employed: Worked in reference week.– Unemployed: Did not work in reference week, actively
sought employment in last 4 weeks, and was available to work.
• Not in the Labor Force: Did not work, did not look for work in the reference week, or was unable to work.– Marginally Attached: Want a job, looked in the last 12
months (but not last 4 weeks), are available.• Discouraged Workers: Not looking because of
economic conditions.
Headline Unemployment: U3Headline Unemployment: U3
Oct 2012 7.9%
Oct 200910.1%
Per
cen
tag
e
Labor Force Participation RateLabor Force Participation Rate
Oct 2012 63.6%
Apr 200167.3%
Per
cen
tag
e
The Amazing Disappearing WorkerThe Amazing Disappearing Worker
• Decades-long decline in male 25-54 LFP– 1970: 96.0% 2012: 88.5%
• Aging Boomers: “The Pig in the Python”– We may soon reach 10,000 new retirees per day
• Recession: – Discouraged Workers– Premature retirement
• Public policy: – Relaxed standards for disability
Male and Female Male and Female Labor Force Participation: 1948-2011Labor Force Participation: 1948-2011
Per
cen
tag
e
LFP rate of prime working age LFP rate of prime working age population peaked in 2000population peaked in 2000
Oct 2012 81.5%
% in
th
e la
bo
r fo
rce
LFP Rate of ≥ 65 has been LFP Rate of ≥ 65 has been increasing since 1985increasing since 1985
Oct 2012 18.4%
% in
th
e la
bo
r fo
rce
… … but there are soooo many more of but there are soooo many more of them: the “pig in the python” is agingthem: the “pig in the python” is aging
Past 12 months averaged 6,500 new “seniors” per day
Th
ou
san
ds
Increasing share of working age Increasing share of working age population is disabledpopulation is disabled
Oct 2012 5.4%
Alternative Measures of Alternative Measures of Unemployment: U5 and U6Unemployment: U5 and U6
Oct `129.3%
Oct `1214.6%
Per
cen
tag
e
Causes of Unemployment?Causes of Unemployment?
• Traditional Categories: – Seasonal, Frictional, Structural, Cyclical
• Demand-side:– Insufficient aggregate demand
• “balance sheet” recession• risk averse financial institutions
• Supply-side– Public policy: unemployment insurance, food
stamps, Medicaid, taxes, regulation, – “Uncertainty”
The “Chart of Doom”: The “Chart of Doom”: Job Loss as Percentage of Total Employment PeakJob Loss as Percentage of Total Employment Peak
Job TroughFeb 20108.76 mil jobs lost
Lost > 500,000 jobs/month, Oct `08 – Apr `09
28
― 1981 ― 1990 ― 2001 ― 2007
cum
ula
tive
% c
han
ge
in t
ota
l e
mp
loym
ent
4832
Job Loss as Percentage of Total Job Loss as Percentage of Total Employment PeakEmployment Peak
2007
cum
ula
tive
% c
han
ge
in t
ota
l e
mp
loym
ent
March 2010
Government Jobs Government Jobs During Employment During Employment ContractionContraction
1981
2007
2001
months since employment peak
cum
ula
tive
% c
han
ge
in g
ove
rnm
ent
emp
loym
en
t
1990
Government Jobs Government Jobs During Employment During Employment ExpansionExpansion
cum
ula
tive
% c
han
ge
in g
ove
rnm
ent
emp
loym
en
t si
nc
e tr
ou
gh
1981
1990
2001
2007
Private vs. Government Jobs During Employment Private vs. Government Jobs During Employment Expansion: 2001 vs. 2007 RecessionsExpansion: 2001 vs. 2007 Recessions
cum
ula
tive
% c
han
ge
in
emp
loym
ent
sin
ce
tro
ug
h
2001 Private
2001 Public
2007 Private
2007 Public
Co
ns
truc
tion
4%
Ma
nu
fac
turin
g 9
%
Tra
ns
po
rt & W
are
ho
us
e 3
%
??
? 1
1%
Le
isu
re 1
0%
FIR
E 6
%
W&
R T
rad
e 1
5%
Pro
f & B
us
Se
rv 1
3%
Go
ve
rnm
en
t 16
%
Lo
ca
l Pu
blic
Ed
uc
atio
n 6
%
Job growth by selected industries during Job growth by selected industries during contractioncontraction—expansion phases of the 2007 recession —expansion phases of the 2007 recession
*%= industry’s percentage of overall employment
Since March 2009 initial unemployment claims Since March 2009 initial unemployment claims have been declininghave been declining
… … the average length of unemployment the average length of unemployment seems to have stabilizedseems to have stabilized
Wee
ks
Unemployed ≥ 27 weeks Unemployed ≥ 27 weeks as % of total unemployedas % of total unemployed
Per
cen
tag
e
Improving conditions for job seekers?:Improving conditions for job seekers?:unemployed, job openings, and quitsunemployed, job openings, and quits
2.9*
1.1*
6.7*
1.4*
3.4*
tho
usa
nd
s
Date
*ratio unemployed to openings
