When it works – this column-writing business – it’s a two-way street. A light goes on at both ends of the line. This heel-of-the-hand-to-the-forehead insight came to me courtesy of a reader who questioned my apparent concern in last week’s column about Maine’s declining unemployment rate.
“Isn’t it a good thing that the number of unemployed people in Maine has declined?” he asked. “Doesn’t that mean that more people have jobs?”
Clearly, what I thought went without saying needed to be said. This time, the light went on at my end of the line.
Yes, it is clearly a “good thing” that the number of unemployed Mainers declined by nearly 30,000 between 2010 and 2016. That, however, does not mean that 30,000 of the 57,000 Mainers who were looking for but didn’t have a job in 2010 had, by 2016, found jobs. Yes, some of those 57,000 people probably did have jobs in 2016. But others had retired, given up looking for work, moved away, qualified for disability or died. We simply can’t know for sure.
Figures about employment, unemployment and labor force participation come from sample surveys of households. They are true (within certain limits of statistical probability) for the universe they are designed to estimate at a given time and place. The status of any particular person in a sample at one time (say, 2010) cannot be known by the results of another sample taken at another time (say, 2016).
This problem is similar to that found in opinion polls of all sorts. Other than from personal contact, one cannot know today what any particular person who voted for Donald Trump last Nov. 8 thinks about the president today. We can only estimate opinions from current approval rating polls taken today from samples of various segments of the population.
So, just as we attempt to understand structural changes in the nature of political opinions through sample polls, so do we attempt to understand changes in the structure of our economy through sample questionnaires of households and employers. And it is through careful analysis of the results of these questionnaires over time that we can design policies designed to address the problems the data reveal to us.
And the central problem that analysis of Maine’s current labor force data reveals is quite clear. We simply cannot continue to increase the number of people with jobs while the number of people in the labor force continues to decline. Yes, it is wonderful that the number of unemployed people has declined dramatically, but that can’t continue forever. If we are to maintain a thriving economy, we simply must address not the jobs problem, but the labor force problem.
Perhaps this distinction risks seeming too clever. “What’s the difference? ‘Jobs’? ‘Labor force’? Isn’t it all the same thing?”
No, it isn’t. From the 1970s through the 1990s, the greatest change in Maine’s and the nation’s labor force was the vast increase in the percentage of women participating in the labor force.
This change did not result simply from large numbers of women saying, “I want a job.” It reflected major structural changes in social expectations and social structure. Although glass ceilings on job opportunities and pay rates have not all been shattered, the idea of women in the workplace is clearly no longer “unusual,” and the idea of “women’s work” has all but disappeared. This change was accompanied and made possible by opening up educational opportunities to women, by a vast expansion of child care options and by major (if not complete) restructuring of domestic responsibilities within dual working households.
Today’s labor force challenge poses just as great a change in social attitudes toward work and just as great a change in the social structures preparing people for work and supporting them in the workplace. Such changes will affect all elements of the economy.
Employers can no longer simply complain that they can’t find qualified workers; they have to help prepare the workers they need, both by working with local educational institutions to inform them of their needs and by developing clearer job training and job advancement paths within the workplace. Similarly, educational institutions must drop the old saw that “everyone has to go to college” and return to a diverse set of educational programs explicitly linked to clearly defined and documented job attitudes and skills.
Yes, it is a very good thing that many Mainers without jobs in 2010 now have jobs. But if our state is to address its all too real social and fiscal challenges, it must count on far more than reducing the unemployment rate.
Charles Lawton, Ph.D., is a consulting economist. He can be contacted at:
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