Labor Department Overstates number of working Americans by 3 million

[papau]

There is no copyright on this press release


Study Finds that Labor Department Overstates Share of Working Americans
By 1.4 Percentage Points


For Immediate Release:
Thursday, February 2, 2006

Contact:
Lynn Erskine 202-293-5380 x115


Washington, DC - The most important source of data on the U.S. labor market may be systematically overstating employment, according to a new report by the Center for Economic and Policy Research. The report, "Missing Inaction: Evidence of Undercounting of Non-Workers in the Current Population Survey (CPS)," found that the CPS appears to be overstating the share of American adults who are working by about 1.4 percentage points.

The report by economists John Schmitt and Dean Baker noted that a large and growing portion of the population does not respond to the CPS, and that the non-responders appear less likely to be employed than people who take the survey. This overstatement is significant because the CPS is the source for the government's most important statistics on the labor market, including the unemployment rate, poverty rate and health-insurance coverage.

"Current labor market estimates appear to be overstating the share of working Americans by 1.4 percentage points. This corresponds to roughly 3 million fewer people working - almost as big a drop in employment as in a typical recession," said John Schmitt, CEPR economist and lead author of the report.

The study assessed employment rates among non-responders by comparing employment rates in the CPS with employment rates in the 2000 Census. In 2000, 8 percent of the population did not respond to the CPS. In contrast, only 2 percent did not respond to the 2000 Census. After adjusting for the errors in reported employment in the Census data (and excluding the prison population), the study found that employment rates were 1.4 percent lower overall in the Census than in the CPS.

The study also found that the CPS overstates employment rates for blacks by about 2 percentage points, with the gap for younger black men as high as 8 percentage points. The CPS also appears to be overstating employment rates of younger Hispanic women by about the same margin, and younger Hispanic men by 3 to 6 percentage points.

Since the CPS is also the source of official statistics on poverty rates and health-insurance coverage, the report warns that these widely reported numbers could also be overly optimistic. Non-working adults are more likely to be in poverty and less likely to be covered by health insurance. Therefore, if non-working adults are disproportionately excluded from the CPS, then the survey is understating the true poverty rate and overstating the share of the population covered by health insurance.

The CPS is a monthly survey of households conducted by the Bureau of Census for the U.S. Bureau of Labor Statistics.

To read the report, see: http://www.cepr.net/publications/undercounting_cps_2006_01.pdf

[marmar]

1. Oops, a little blip...

Life in Newsspeak America is a real bitch! When will this nightmare end?

:cry:

[NMDemDist2]

2. K & R'd n/t

[TomInTib]

3. Picky, picky recommended

[papau]

4. I wonder if our dear US media will ever report on this? :-(

Or if they will even read this and absorb the fact that the "context" for reporting on Bush DOL NUMBERS LIKE JOB GROWTH may require a differrent spin.

sigh ......

:-(

[Festivito]

8. Perhaps it can be a little too confusing.

Percentage points oft expresses tenths of a magnitude, here a percent. I figure they mean a point as a straight percent. (Thus, 1.4% of 215 million workers yields 3 million overstated as workers.

Our gutless cowed and confused media should read: "overstating the share of working Americans by 1.4 percent," not percentage points. And if this 1.4% remains constant through Clinton and Bush, et. al. this only means that all our past memory of 4% unemployment being acceptable should be 5.4% as acceptable ... maybe acceptable!? Maybe it never was acceptable? I certainly don't know.

Confusing, difficult and does not fit into a bumper sticker.

Weren't the statistics used to hide 3 to 4 percent the other day, via long term unemployed? That would be more interesting to report, noting it defies relation to historical data. Add that this could be in addition to that, that we could be understating unemployment, by two separate articles, by 3 to 6%? And what would that mean in relation to historical unemployment figures.

BUT AGAIN, what does this matter if this percent-off has been historically the same? It skews the reality of a percentage, a percentage that means little, except if compared to history.

[The Backlash Cometh]

5. Notice how the quality went down after Bush got into office?

FEMA, the Labor Department, Education, FBI & CIA intelligence, EPA, just to name a few.

Just about the only thing missing during the Bush Administration is a good HUD scandal.

[many a good man]

6. Q: how do Europeans count their unemployed?

I've heard our unemployment rate would be similar to that of the social democracies in Europe if we counted them the same way. It seems our method is problematic and does not return accurate results.

[EVDebs]

7. 3 million divided by 150K jobs per month = 20 months of bogus

'net' full employment . 150K jobs per month are required for 'net' job growth in order to keep even with 2% population growth (what the 'net' is all about).

Bush didn't create a new net job until just after the last election if I remember correctly. This would mean he still hasn't.

[seasat]

9. That is what gets me about Shrub Inc's bragging.

If you got to the Census bureau and pull up the estimates for population growth, you find that the 18-64 age group has grown by about 9.3 million during Shrub Inc's reign. However, we only have a net of about 2 million jobs during this same period. That means that his anemic job growth has resulted in a huge number of folks dropping out of the labor force. They're trying to hide that fact with smoke and mirrors.

[fasttense]

10. I wonder why the error is growing instead staying the same?

"The percentage of the population who are missed as a result of people not responding to the survey has risen from less than 4 percent in the seventies to more than 10 percent in the last 2 years."

You would think the number of non-responders would stay fairly constant. But it doesn't. I wonder what the bushites are doing to cause more unemployed to avoid responding?