Looking at employment rather than unemployment

by philg

I keep seeing news articles about unemployment percentages. I’m surprised that so few people look at the actual employment numbers rather than unemployment. As I’ve written here before, I think total employment is a much more interesting number because it predicts demand for housing (generally you need a job in order to pay rent or a mortgage) as well as the overall strength of the economy.

According to the U.S. Bureau of Labor Statistics, in 2000 the U.S. had 131,785,000 nonfarm jobs, of which 20,780,000 were in government. In 2011, the corresponding numbers were 131,190,000 (slightly less) and 22,034,000 (about 6 percent more).

So to my mind there should be demand for approximately 350,000 fewer houses and apartments (budgeting in some two-career households) and the overall economic strength of the U.S. should be lower because we have fewer private-sector jobs supporting more government jobs.

The raw data on employment don’t seem that hard to interpret. Why do they so rarely appear in the news?

16 thoughts on “Looking at employment rather than unemployment”

  1. It’s much harder to fudge the employment figures than those for unemployment. After all, either someone is gainfully employed, with a contract and all, and paying tax to the IRS – or she isn’t.

    Hence those in authority prefer the unemployment figures, which can be massaged six ways from Sunday.

  2. Hi Phil,

    I have two questions/comments?

    How does housing demand correlate to private sector jobs rather than public sector jobs?

    Also, you seem to imply that all public sector jobs are a drain on the economy (require support by the private sector). I don’t believe that all public sector jobs are a net negative because they provide the framework/infrastructure for capitalism to function. For example, the telephone system at Google could be compared to the interstate highway system for the US. Both systems require capital outlays that do not directly produce profits but they enable business to function. The same could be said for the majority of public sector work (especially the court system, the FAA, the FDA, etc) with the exception of the military.

    Just a thought.

    I like the thought provoking posts.

    Brad

  5. I question your assumption that private sector jobs are productive while government jobs are nothing but costs.

    Eg, government workers build and maintain critical transportation infrastructure, and eg, a good third of health care costs goes to completely unproductive insurance company bureaucrats.

  6. I’m not sure your numbers as presented here are particularly useful. You also need to take into account population and the age structure of the population (working age?).

    I keep an eye on the Calculated Risk blog, he has very good coverage of housing and employment issues. Usually there is a monthly post on labor and he frequently discusses the “labor participation rate” (which is what you are trying to get at here, I think).

    His chart porn is collected here: http://cr4re.com/charts/charts.html?Employment#category=Employment&chart=EmployPopJuly2011.jpg

  9. Very interesting philg, never thought to check those as unemployment numbers are all you ever hear about. Employment numbers do seem to be a lot simpler.

    @goddinpotty probably more than half of all health care costs are paid by gov’t, so bad example of ‘private’. Also, even assuming gov’t must maintain ‘critical transportation infrastructure’ (which I don’t), if gov’t is maintaining more than there are people to support, that would still drag down the economy. A superhighway built for 10 people is a waste, plain and simple, even if they could ‘use’ it.

  10. The media actually isn’t as bad about forgetting the “big picture” with the economy as they are with almost everything else they report on.

  11. If we spend X trillion on government jobs, how much do we spend on supporting the unemployed? Would we spend less if we provided a government job for every “unemployed” person? Very confusing.

  12. goddinpotty: if the government jobs are going towards things like critical infrastructure, and the point of critical infrastructure is to make it possible for people and businesses to exist and thrive, then this would imply that government jobs would foster personal and corporate prosperity, and therefore create more private sector jobs.

    Why, then, do the numbers philg listed suggest otherwise?

  13. Underived numbers more valuable than derived ones.

    Besides total jobs, be nice to know total hours worked and total compensation.

    —

    Why divide it between government and non-government? Farm and non-farm strikes me as more legitimate—everyone who is not a farmer is a parasite on the backs of farmers. Sure, there is a little bit of infrastructure that supports farms on the farm side of the equation, but certainly not consumer electronics or manufactured food or entertainment or cosmetics or wars of choice.

    Every year for a long time now, we have fewer farm jobs supporting more non-farm jobs.

  14. Interesting question! Well I think that the unemployment in the US is calculated by the number of jobless claims submitted. This means that if the jobless claims are increasing, more people are losing their jobs. I think you are not accounting for population growth and the number of students who have completed their education since 2000. Just considering employment numbers will not lead to any conclusion.

  15. One way to think about government vs private sector jobs is to consider a spectrum of voluntary purchasing. At the “private sector” end of this spectrum are completely voluntary purchases, like getting my hair cut, or buying a hamburger. These are true value because someone chooses to exchange their stored value (money) for the product or service. At the other end of the spectrum are forced purchases. Things like getting my car smog checked, killing people in Iraq, contributing to the third repaving of highway 5 in Oregon, paying someone to oversee unemployment payments, etc. These services aren’t valuable enough to stand on their own in a free market, so they are forced upon us by government, with guns. There are low value private sector goods and services, but they generally don’t survive long so examples are difficult to find. There are some high value goods and services in the government sector, and these provide ammunition for people arguing for their favorite government program. I’d put the interstate highway system in the valuable goods category. I’d even put a local police force, financial derivatives regulation, and even some mandated drug testing and information disclosure in the valuable category. But the vast majority of government spending is of inadequate value to consider those jobs to be productive.

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