Unemployment

Scary title huh?

I was reading about unemployment levels tonight. Take a look.

Ever wonder how the Unemployment level is actually counted? Here's the question: do you think the unemployment rate is determined by the number of people claiming unemployment? Nope. A survey of about 60K households is completed on a monthly basis.

Then...

At the time of the first enumeration of a household, the interviewer prepares a roster of the household members, including their personal characteristics (date of birth, sex, race, Hispanic ethnicity, marital status, educational attainment, veteran status, and so on) and their relationships to the person maintaining the household. This information, relating to all household members 15 years of age and over, is entered by the interviewers into laptop computers; at the end of each day's interviewing, the data collected are transmitted to the Census Bureau's central computer in Washington, D.C. (The labor force measures in the CPS pertain to individuals 16 years and over.) In addition, a portion of the sample is interviewed by phone through three central data collection facilities. (Prior to 1994, the interviews were conducted using a paper questionnaire that had to be mailed in by the interviewers each month.)

Each person is classified according to the activities he or she engaged in during the reference week. Then, the total numbers are "weighted," or adjusted to independent population estimates (based on updated decennial census results). The weighting takes into account the age, sex, race, Hispanic ethnicity, and State of residence of the person, so that these characteristics are reflected in the proper proportions in the final estimates.

A sample is not a total count, and the survey may not produce the same results that would be obtained from interviewing the entire population. But the chances are 90 out of 100 that the monthly estimate of unemployment from the sample is within about 290,000 of the figure obtainable from a total census. Since monthly unemployment totals have ranged between about 7 and 11 million in recent years, the possible error resulting from sampling is not large enough to distort the total unemployment picture.

How the unemployment level is calculated reminds me about a West Wing episode.

Two parts to this: the first being - are you concerned that the unemployment level is determined by interviewing 60K households? The second, and more importantly - I would think the real unemployment level would be terrifying.

Here's why it would be terrifying: if a true unemployment level was identified, the number would have to include stay at home parents, those between 16 and 65 who aren't working for one reason or another, are not generating income, and are no longer looking for work. People who the government would identify as someone NOT in the labor force.

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