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How bad is jobs situation?

Sunday, December 4, 2011

(Photo)
Gov. Mitch Daniels [Order this photo]
INDIANAPOLIS -- So how bad is the jobs situation in Indiana, really?

The question is at the heart of the upcoming battle between business and labor that is practically guaranteed to push all other issues aside during the 2012 session. And yet the key number used nationally to determine just how deep in the muck we are -- the unemployment rate -- is the subject of its own debate.

"Everybody knows the number is very imprecise," Gov. Mitch Daniels said.

But that "imprecise" number will be a critical figure in the looming battle over a "right to work" proposal -- the same issue that sparked a five-week walkout by House Democrats earlier this year and threatens to throw the 2012 session into chaos as well.

The stated reason for risking that chaos is job creation.

Republican House Speaker Brian Bosma has taken his arguments to the airwaves in an ad that aired last week in Indianapolis and Fort Wayne. In it, Bosma uses the dour economy and the troubles veterans face finding jobs to argue that Indiana should become the 23rd state to ban businesses and private unions from negotiating contracts that require workers to pay labor fees.

Indiana's unemployment rate crept up to 9 percent in October, up from 8.9 percent the month before. The national rate dropped from 9.1 percent to 9 percent over that same period. These are the numbers most folks are used to hearing when reading official tallies of the struggling economy.

But the official unemployment rate only tracks people actively seeking work. House Minority Leader Patrick Bauer, D-South Bend, and others say it's flawed because it excludes people who have either stopped looking for work or are only working part-time.

The Bureau of Labor Statistics actually produces a range of estimates. The range runs from a very strict definition of who is looking for work to a looser definition of joblessness that includes people who want full-time work but are only working part-time. Not surprisingly, the broader the definition, the worse things look.

The broadest definition, which includes the so-called underemployed and anyone no longer seeking work, was 15.6 percent of the national labor pool in November. The most recent numbers for Indiana put the state at 15.9 percent through the second quarter of 2011.

So which number gets the nod -- the more conservative, official unemployment rate or the broader definition?

The whole "How do you define unemployment?" debate is as old as the figure itself, said Steve Haugen, economist with the BLS division of labor force statistics.

After the Great Depression, lawmakers looking for a reliable and consistent measure of the nation's joblessness pondered whether desire to work should be considered or if measurements should focus only on what people are actually doing, he said.

Since then, presidential commissions have parsed and tweaked the official unemployment rate, but it has remained largely the same. What has changed is the introduction of new measures like the broader definition.

The larger number, which includes workers in part-time jobs who want to work full time, actually follows the same valleys and peaks as the official unemployment rate, Haugen said. So as a measure, the unemployment rate still shows where the national jobs situation is, where it's going and what it's done in the past.

Jerry Conover, director of the Indiana Business Research Center at Indiana University's Kelley School of Business, said each measure shows a different dynamic in the ailing economy.

"I would say maybe looking at the (unemployment rate) is a better measure of the degree of pain in the labor force," Conover said. "It can change not because there are more or fewer unemployed, but because the number of people out there looking for work changes.

"In that sense, the standard doesn't fully reflect the extent of people who want to work," he said.


Comments
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Why work when Welfare is excepted ? It seems to me alot of people in Brazil have been on welfare for generations. Begging and asking for handouts are their way of life. I guess ,thinking like that unemployment to grow higher and higher.

-- Posted by carebuttonbroke on Sun, Dec 4, 2011, at 7:27 PM

AMEN 2 THAT

-- Posted by buddry55 on Sun, Dec 4, 2011, at 8:32 PM

During Daniel's 29 month tenure as director of the OMB appointed to him by George Bush, the 236 billion surplus turned into a 400 million deficit due to an economic downturn,and the failure to enact spending cuts to offset large tax cuts. These were called Economic relief and tax reconciliation act of 2001 and jobs growth and reconciliation act of 2003 (Bush tax cuts). Never got many jobs but some got rich, maybe unemployment will get better under the next Govenor.

-- Posted by farmer on Sun, Dec 4, 2011, at 10:46 PM

Where is it that you obtained your numbers from? just curious......

-- Posted by Proud of My Country on Mon, Dec 5, 2011, at 11:09 AM

Maybe the same place MAGGIE7872 got hers?

"No wonder there are 99% people in the streets."

-- Posted by Maggie7872 on Sat, Nov 26, 2011, at 6:07 PM

-- Posted by Emmes on Mon, Dec 5, 2011, at 11:52 AM

Who will be paying taxes when the right to work passes? The immigrant workers, I think not.

-- Posted by James M on Mon, Dec 5, 2011, at 5:44 PM

sorry 400 billion wikipedia (mitch daniels)

-- Posted by farmer on Tue, Dec 6, 2011, at 8:46 PM

Wow, and to think after watch Mitch did in D.C. we here in Indiana were stupid enough to elect him governor. I know I didn't vote for him, so I feel good about me and carebuttonbroke I could not agree with you more on your comments.

-- Posted by realitycheck! on Wed, Dec 7, 2011, at 12:28 PM

Thank you "farmer".

-- Posted by Proud of My Country on Fri, Dec 9, 2011, at 11:23 AM

The really sad thing is that if a politician came out and said "I want you to work for what you get, and there will be no more handouts for anyone!", there is no way they would ever get elected, but isn't that the way it should be? Earn what you get, and get what you earn!

-- Posted by almostfootballfree on Sat, Dec 10, 2011, at 1:22 PM


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