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July 07, 2010
Hours worked
In gauging the progress of the economy most people focus on the labor market and jobs, and in measuring jobs we just count the number. But in simply counting the number of jobs, are we sometimes missing the bigger picture?
Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:
"We are ..., because obviously a business can increase its use of workers either by hiring more workers or taking the existing number of workers they have and working them longer hours. And, in fact, we have had a little bit of both going on in the economy. In fact, it is actually normal in the early stages of economic recovery for a business to work their existing workforce more hours and then only later add more people.
"A good example of the importance of focusing also on the number of hours worked is the employment report in May, which many people thought was very disappointing. We had about 40,000 net new private sector jobs created.
"However, what was unnoticed by many was that the work week expanded. People were working more hours. And, in fact, one of my colleagues calculated that if people were working the same number of hours in May as they did in April, we would have not had 40,000 new jobs created. We would have had about 350,000 new private sector jobs created.
"So that's why you really have to go beneath the surface of these statistics, and at this stage of the economic recovery tracking the average length of the work week is very important."
Posted by deeshore at July 7, 2010 01:32 PM