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12E.5.6 Employment in Perspective: Unemployment of Black Workers

Problems with economic data-statistics on unemployment — what it does not include.

1972 October

Employment in Perspective: Unemployment of Black Workers, US Department of Labor, Bureau of Labor Statistics, BLS Report 416, October 1972.UC Berkeley, Institute for Research on Labor and Employment Collections

The Bureau of Labor Statistics Report 416,  “Employment in Perspective:  Unemployment of Black Workers,” published in October 1972, addresses limitations of the unemployment rate data in telling the whole story of unemployment.       Questions: Who is counted as unemployed? ● Why do you think the author is concerned that the data collected on unemployment does not include “What a person is doing to find work”? Who is not counted as unemployed? ● Why would the author say that in defining unemployment, it is important to know why a person does not have a job, whether she or he “quit his job, was laid off, or never had a job before” or “turned down a job offer?” ● Why would collecting information on what type of job a person wants — “full-time or part-time job, or a temporary job” — be important? 3. According to this source, what are the limitations of unemployment data?
Students will investigate limitations of how unemployment is defined and think about how this may affect the unemployment rate in telling the full story of unemployment. Since the inception of data collection on employment in the 1880 Census, there have been criticisms of how and what information is collected. The1880 Census questionnaire asked the “Profession, Occupation or Trade of each person, male and female” of the household residents and “The number of months the person has been employed during the census year.” In 1910, the employment portion of the questionnaire asked for responses from those “10 years and older”; therefore, by this time, the census estimated values for everyone considered part of the “working age population.” By 1920, the census questions expanded to include job industry, and whether people were business owners, employees, or self-employed. The Great Depression highlighted the limitations of this data collected by the census as the government looked to use the information to assist the unemployed. In the 1930s, through the Civil Works Administration and the Works Progress Administration, the government conducted surveys of the unemployed to capture underemployed and discouraged workers. (Note that the idea of discouraged workers emerged from the 1940 census questions identifying those “seeking work,” “and if not seeking work, did he have a job, business, etc.” as well as the duration of unemployment.) The definition of the working-age population further evolved from these censuses, as it raised the minimum age qualification from 10 years old to 14 years old in the 1940s. The minimum qualified age rose again in the 1950s to its current limit of 16 years and older. Additionally, the definition of unemployed was altered to mean those who are seeking work but have not found it. Though the census and later the Current Population Survey collect data on discouraged workers and underemployed, as noted in this source in 1972 and today, these people are not included in the unemployment rate. The same concerns from the 1930s about capturing the full story of unemployment still remain. Although this article is specifically about black unemployment data, the same concerns apply to unemployment data overall. The key feature of this source is to identify further limitations of the collected unemployment data in telling the full story of the labor market. This source shows that in 1972 there were concerns about how unemployment was defined in the unemployment rate calculation. Although the article specifically examines unemployment data for African Americans in the 1970s, the excerpt examined here focuses on concerns that are applicable to overall unemployment data. The source does not state that all the factors should be included in the unemployment calculation, but it does state that to get a better picture of unemployment, more information should be collected. (Note: The next source will show how the BLS has tried to rectify these concerns). The source lists several limitations of the data collected, but it can be grouped into two main areas: (1) information on why someone is without a job and (2) what it means for someone to be “seeking work.” It is important to consider these other aspects of unemployment, particularly the reasons for unemployment as well as the meaning behind “seeking work.” Some of the reasons why the unemployed do not have jobs are the voluntary reasons a person may not work. These may include quitting a job or turning down a job offer. Additionally, a person who just entered the labor force may never have had a job before, such as a 16-year-old who began looking for work for the first time or a stay-at-home parent re-entering the labor force. It would be natural for these individuals to be unemployed because they had not been in the labor force for a while, if at all. Another suggestion that the source offers to obtain a more complete story of unemployment is to identify what type of work someone is seeking. For example, some people may voluntarily be looking for part-time or temporary employment and others may be taking a part-time or temporary job because a full-time one was not available. Finally, since the definition of unemployed means that people have to be looking for work, the author points out the relevance of collecting data about what individuals do to find work and accounting for them in unemployment calculation. Unemployment insurance benefits require submission of documents showing interview attempts and coursework to improve skills, but the CPS does not require such documents. The author states that CPS asks for the information, but it is just not included in the unemployment calculation.

“Considerable discussion has been taking place in recent months concerning the definition of unemployment as it pertains to blacks, or other minority groups, or to disadvantaged groups in the community. Some have suggested that the definition now in use is too narrow and does not reflect the situation of those who have dropped out of the labor force or are underemployed in their present job. For example, a recent newspaper editorial stated that the real issue "is not statistical method, but whether the government is trying to define black unemployment in a realistic way and with the kind of accuracy that will enable it to mount an effective attack on the problem."
… Need for work, therefore, because of the difficulty of measuring it objectively, does not enter into the definition of unemployment at all. The definition does not take into account what a person is doing to find work, whether he has turned down a job offer, whether he is rich or poor, whether he is getting unemployment insurance, whether his major activity is going to school, whether he wants a full-time or part-time job, or a temporary job, whether his spouse is working, or whether he quit his job, was laid off, or never had a job before. The definition rules out those who have given up seeking a job because they believe none is to be found, or for any other reason. However, information is collected on this last point as well as most of the others and is published by BLS. From it, one can obtain a better indication of the character and dimensions of the unemployment problem than one can get from any single number such as the unemployment rate.”