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May 25, 2009
Discouraged workers
Here's some confusing information: In March, North Carolina lost 33,000 jobs, almost twice as many as in February. Yet while the February unemployment rate jumped by a full percentage point, in March it rose only one tenth of a percentage point. This just doesn't make sense. Listen
Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:
"First of all, these numbers are accurate, but what we need to know is more about what those numbers really mean. And we need to focus on what it means to be called unemployed. Now, the unemployment numbers actually come from a survey that the federal government does every month. They survey about 60,000 households across the nation. To be counted as unemployed, you not only have to be not working, you not only have to say that you want a job, but you have to be actively looking for work. What does that mean? That means you have to be sending out resumes. You have to be contacting businesses, and you have to be going on job interviews, all within the last four weeks. If you're not actively looking for work - even though you tell the surveyor, 'Hey, I don't have a job. I want to work,' - but if you're not actively looking for work based on that definition of what active means, you're not counted as unemployed. And in fact, we economists have a name for these folks. We call them discouraged workers. So what happened in March is, yes, we actually lost twice as many jobs in North Carolina in March as we did in February. The unemployment rate, however, barely budged because so many workers who are unemployed - and we know they're unemployed - simply have given up looking for work, so they're not officially counted as unemployed. Now actually the government keeps a secondary set of unemployment numbers that takes account of these so-called discouraged workers. If we were to count them as unemployed in North Carolina in March, it would have added about a half percentage point to our North Carolina unemployment rate."
Posted by Dave at May 25, 2009 08:00 AM