State’s January Jobs News Masks Washington’s Trend of Underemployment

 

Graph: Washington ESD

“Big job gains push Wash. unemployment rate down to 9.1 percent,” reports Seattlepi.com. “State’s monthly job results good, as unemployment drops,” puts in the Seattle Times. The AP? “Wash. State Jobless Rate Drops; 11,000 Jobs Added.”

A slightly more accurate, and less attention-grabbing formulation came from HeraldNet.com: “State jobless rate down slightly in January.” December’s unemployment rate of 9.3 percent “returned” to 9.1 percent, which is about where it has been for the past year and a quarter.

When you read that the unemployment rate has plunged or climbed by tenths of a percent, you should know that, nationally, the polling method’s margin of error is plus or minus a tenth of a percent. On a state level, it’s less precise. “Washington’s unemployment rate in December 2010—9.3 percent—was accurate within a range of 8.5 percent to 10.1 percent,” points out The Columbian. In effect, every single single story you’ve read about Washington’s unemployment rate for the past year has been a story about statistical noise.

Virtually everyone is quoting Employment Security Commissioner Paul Trause’s statement: “It’s unusual to have job gains in the middle of winter, so this is another positive sign that the recovery is under way.” It’s hardly bad news that “Between December 2010 and January 2011, Washington state added 11,000 jobs on a seasonally adjusted basis,” but the unusual is not necessarily a sign of recovery. It might also represent a shocky volatility. In any event, these are “seasonally adjusted” jobs.

“We’re certainly seeing positive news,” Dave Wallace, chief economist for the state Employment Security Department, told AP. “My instinct is to be somewhat cautious and see what the revisions will be in the coming months.” Wallace explained to the Seattle Times that, in absolute terms, the state lost 47,000 jobs between December and January, due to seasonal hiring. “In a very real sense, we lost jobs,” Wallace said, it’s just that, “we lost fewer jobs than we normally would at this time of year.”

Another thing to consider is that these 11,000 jobs are not individual people–if people are working two or even three jobs to make ends meet, those two or three jobs are each counted. This is noteworthy because Washington’s fullest measure of underemployment and unemployment (the U6 category) shows us leading the national average: the U.S. is 16.7 percent, and Washington is at 18.4 percent.

As the employment report goes on to explain, it’s looking like the “ranks of discouraged workers, marginally attached workers, and those working part-time involuntarily in Washington have risen even more dramatically than the number of unemployed.” That increase has been steady since January 2010, so when you learn that the state added 20,500 jobs between January 2010 and January 2011, it’s important to remember this U6 background–it’s an alarming longer-term trend, masking as it does stresses on workers.

The professional and business services sectors, and education and health care sectors, saw what growth there was. Construction saw a loss of 9,900 jobs, and government, a loss of 3,800 jobs, over the year. Gallup’s latest poll on job creation nationally shows this same kind of improvement, but they qualify the news thusly: “Job market conditions are better now than they have been over the past couple of years, but they are no better than they were during the recessionary period of September-October 2008.” Adjectives of choice are “weak” and “anemic.”

3 thoughts on “State’s January Jobs News Masks Washington’s Trend of Underemployment”

  1. Yup – coming up on 3 years without a job (save for one brief 6 month gig), and I cant even get McDonalds to call me back.

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