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Wednesday, October 12, 2011

Alternate Unemployment Rate Increases to 18.4% in September 2011

Molly's Alternate Unemployment Rate Rises to 18.4% in September  2011 from 18.3% in August 2011.   (Update for October HERE.)

The increase is due primarily to another 5% increase in the number of people working part-time who want full-time work.  According to the Bureau of Labor Statistics, 430,000 more people are working part-time but want full-time work in September 2011 over August 2011.  This number had been decreasing in the early months of the year, but it has now risen substantially for two months.  

There are now 874,000 more involuntary part-time workers than there were in July.  The number of additional workers overall reported over the two months (since July) is 729,000.  It appears as though most of the new workers are working part-time.  Remember that the official unemployment number has stayed at 9.1% for the past three months.     

There has been a decrease of 4% in the number of people who "want to work" but have not actively looked for work in the past month.  In August, there were 6,493,000 in this group; now there are 6,241,000 in this group.  As the civilian labor force added 400,000 workers and the civilian population as a whole only increased by about 200,000 workers, it appears that at least 200,000 of the people who "want a job" actually entered the labor force in September; that is, they are either actively looking for work or they have actually started employment.

Molly's seasonally-adjusted alternate unemployment rate is 18.4% for September 2011. It is up one-tenth (.1%) of a percent from the 18.3% of August 2011.  Details below...

29,503,000, very close to 30 million people, are unemployed and want to work OR underemployed (working part-time and wanting full-time work) in September 2011. This is an increase of 217,000 people from the 29,286,000 who were unemployed and/or  underemployed in August..

The details of Molly's alternate unemployment rate continue after the jump! 

In seasonally-adjusted numbers, 18.4% of the American labor force (in September 2011) were either:
  • "Officially" unemployed,
  • Working part-time but wanting full-time work,
  • or "Wanting a job" but hadn't looked in the past four weeks for some reason such as being discouraged, convinced that there was no work for them, or due to family obligations.
(Unlike others who calculate alternate unemployment rates, I do not count people among the alternate unemployed unless they say that they "want to work" according to the BLS Current Population Survey. How can you count someone as unemployed if they don't want to work?)

Here's how the numbers for the Alternate Unemployment Rate break down for September 2011:
  • The number of those unemployed and actively looking for work:  13,992,000 (vs. 13,967,000 in August)
  • The number of those working part-time who want full-time work:  9,270,000 (vs. 8,826,000 in August)
  • The number of people who "want a job" but haven't looked within the last month: 6,241,000 (vs. 6,493,000 in August)

The total number of unemployed or underemployed is 29,503,000 (an increase compared to 29,286,000 unemployed or underemployed in August).

The Alternate Work Force consists of the 154,017,000 people in the official BLS Civilian Labor Force plus the 6,241,000 people who "want a job" but haven't actively looked recently. That is a total of 160,258,000 people (compared to 160,087,000 in August.).  Molly's Alternate Unemployment Rate is the alternate number of un/underempoyed as a percentage of the Alternate Work Force.

Therefore, Molly's Alternate Unemployment Rate for September 2011 is 18.41% or 18.4%.  

Molly's Alternate Unemployment Rate for September went up primarily due to an increase in the number of people working part-time jobs who want full-time jobs.  That number, now 9,270,000,  increased over 400,000 since August.  

Who Do You Count and Where Do You Find These Numbers?

In greater detail, Molly's Alternate Unemployment Rate counts as the un/underemployed the following groups of people:

  1. All of those "officially" unemployed (actively looking) for work from the monthly BLS Employment Situation report.
  2. All of those "underemployed"; that is, those who are working part-time but who want and can't find full-time work according to Table A-8 of the same monthly Employment Situation Report.
  3. All of those who say that they "want a job" even if they have not actively looked for work in the past four weeks from the same monthly Employment Situation Report Table A-1. (This is a broader definition than the "discouraged workers" that BLS uses in calculating their U-6 number.)
The base workforce for Molly's Alternate Unemployment Rate includes the Civilian Labor Force (all of those employed, whether full or part time plus all of those actively looking for work) according to the BLS report plus the people who "want work" but have not actively looked in the past four weeks.

(As I wrote above, I do not include people who do not want a job; so if someone drops out of the labor force and tells the interviewers that they are no longer interested in obtaining a job (for whatever reason), they are not counted.)

Other comments on alternate unemployment and underemployment:

  • The "official" underemployment population consists of those people who are working part-time but want full-time work. These are the only "underemployed" people tracked and counted by the Bureau of Labor Statistics. However, people working at jobs below their skill level might are also considered "underemployed"; unfortunately, there are no national statistics on those workers.
  • For this month, September 2011, the underemployment rate is 6.6%, an increase from the 6.3% in August. This rate is the number of people working part-time who want full-time work as a percentage of all employed. Some writers use the term "underemployment" to include those who are unemployed as well, but I use it only for those working part-time who want full-time work.
  • As usual, we need to remember that the alternate unemployment number doesn't include people working temporary but full-time jobs, people who are working micro-businesses that may not make much money, nor does it include people who have returned to work for wages much less than what they received in the past.

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