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Loss of American Jobs

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Obama: Job Loss is Un-American

October 02, 2008 - Obama on the campaign trail

True unemployment may be close to 10 percent

By Heidi Shierholz

In January, the unemployment rate was 7.6%. In the calculation of the official unemployment rate, however, only jobless workers who are in the labor force actively seeking work are considered. So, to the extent that workers have dropped out of (or never entered) the labor force because they felt they would not be able to secure meaningful work, the official unemployment rate understates weakness in the labor market. From January 2001 to January 2009, the labor force participation rate dropped 1.7 percentage points, from 67.2% to 65.5%. If the labor force participation rate had not declined over that period, today there would be an additional four million workers in the labor force. And if those missing workers were counted as unemployed instead of as not being in the labor force, the unemployment rate today would be 9.9%.

Finding work twice as hard as when recession began a year ago

By Heidi Shierholz

This morning the Bureau of Labor Statistics released the Job Openings and Labor Turnover (JOLTS) data for December of 2008. The data show that there were 2.7 million job openings in December, down 6% from November 2008 and down 32% from the start of the recession in December 2007.

While job openings are becoming more and more scarce, the ranks of the unemployed are growing dramatically - up by 47% in the first year of the recession - such that in December there were 11.1 million unemployed workers.

“This means that there were 4.1 job seekers per available job - more than double the number of job seekers per available job at the beginning of the recession, which stood at 1.9 in December 2007,” said EPI economist Heidi Shierholz.

The JOLTS data are available by census region. Since the start of the recession, the West has experienced the largest decline in job openings, at 40%, followed by the South (down 32%), the Midwest (down 30%), and the Northeast (down 15%). The West also had the largest number of unemployed workers per job opening, at 4.9, followed by the Midwest (4.8), the South (3.6), and the Northeast (3.6).

Note: Given the 508,000 increase in unemployment in January, if job openings experience the same decline in January that they experienced in December, that will translate into 4.6 unemployed workers per job opening in January.