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Demystifying the latest jobs report, why are so many Americans still struggling?

Washington, D.C. Each month, the U.S. Bureau of Labor Statistics releases its jobs report. 

The news articles come fast and furious and, for the past couple of years, were mostly full of optimism:

A sampling from articles about the March report, for example.

Associated Press: “Another month of robust US job growth points to continued economic strength
New York Times: “U.S. employers added 303,000 jobs in 39th straight month of growth

You get the gist.

The April numbers came on May 3 and the reports are more subdued - which is more in line with the reality job-seekers have faced in some time.

A year ago, Arsenio Santos was one of the 700 people laid off from his job at Salesforce. He was a technologist for a couple of decades by that point, and had never had too much trouble finding a new job. Employers before Salesforce ranged from startups to Cisco.

 “Most of my career it’s been relatively straightforward and easy for me. I’d gotten used to that,” Santos said. A year in on the search, he’s had some interviews, but nothing permanent has come out of that. “To try so hard, with getting ghosted over and over again … I took that as a sign that maybe I should be seeing what else I could be doing.”

He started working as a leadership coach for a few clients who are new to supervisory positions.

The jobs numbers don’t lie. They just are a measure of a specific slice of the economic picture. They tell the story they tell, but don’t offer a lot of detail - there’s no difference between a job in the C-suite or on the factory floor. To the numbers, a job is a job is a job.

So, let’s demystify the jobs report.

Each month, usually on the first Friday, the BLS releases a report that is itself based on two monthly surveys: The “Establishment” survey, officially known as Current Employment Statistics (CES), and the “Household” survey, officially known as Current Population Survey (CPS).

The Establishment survey measures employment in all non-farm industries, covering an estimated 97% of all non-farm employment. These companies report the number of jobs on payroll, and the BLS calculates the overall difference month-over-month. Because farm work is seasonal and relies heavily on contract labor, it is not included among the employers, though those workers may still be captured in the Household survey.

The Household survey is a monthly snapshot of the country’s population, statistically selected to represent a true cross-section of American households. Those who participate in the survey are interviewed on a 4-8-4 schedule - interviewed every month for four months, then left alone for eight months, and then four months of interviews again. This helps the BLS capture both month-over-month and year-over-year changes.

The Household queries include a variety of questions about activity related to employment and uses that to determine those who are employed, unemployed, and not in the labor force. related items. It’s meant to reflect the “entire civilian non-institutional population”, said Megan Dunn, a BLS economist who works on the Household survey. That means everyone not in the military and not living in an institution — which can mean a nursing home, a prison, or other similar types of full-time group living quarters.

So farm workers, gig workers, the self-employed - they can all be represented in the Household survey in some way. Have they worked in the past week? Did they job-hunt in the past four weeks? Examples of people represented by the Household survey but lost from the Establishment survey include private maids and chefs, people on unpaid leave, and college students who work more than 15 hours a week for no pay in their family’s business.

While the current “gig economy” companies like Uber and Seamless and TaskRabbit may seem like they have created a whole new employment category, they really haven’t. While the BLS doesn’t measure the gig economy, the types of work generally associated with it - one-off, task-by-task jobs - could be counted as employment in the Household survey.

“The nature of the people doing that kind of one-off, small-job type of work isn’t relatively new,” Dunn said. “There were always house painters that were going out and finding house painting work; there were always musicians going out and finding a gig. My aunt did sewing piece work. It isn’t new, it’s just the way that it’s organized.”

Neither of these surveys digs into what the jobs are. While there are industry breakdowns, there’s no differentiation between pay levels. The industry listed also depends on the company — an accountant job in a construction company would be included as a construction job, not finance.

And then there are the layoffs, which aren’t directly measured by the surveys.

“If company X announces they’re laying off 20,000 people, we’re not necessarily going to see a fall-off of people in that industry the next month,” said Carson Wilson, a BLS economist who works on the Establishment survey. In addition, “We’re measuring net employment change. If company X is laying off and company Y is hiring, you won’t necessarily see it.”

You also won’t see it, he noted, if it’s layoffs that are “out of scope” for the survey - such as contractors, overseas workers. And the layoffs may take place over many months, so the job loss won’t show up all at once.

The jobs numbers, in short, are themselves just one data point in determining the overall health of the economy, Wilson said. So what do the data show?

Since April 2020, which marked the end of the “covid recession” - i.e., when the jobs market hit rock bottom and employment started to recover - the jobs reports were mostly rosy. From February to April of that year, employment fell by 21.9 million. That’s how many U.S.-based jobs were lost in just over two months.

Statistically, the U.S. economy has since regained all those jobs and added another 5.8 million jobs.

That doesn’t mean the jobs are at the same pay grade as before, or even in the same industry. It’s a raw number. A data point. Some industries have not yet recovered — ”accommodation employment” (such as at hotels) is still 180,000 jobs below February 2020, while hospitals have gained about 279,000 jobs. That counts as a net gain in jobs, though that may be small solace for those in the hospitality industry.

The March report, released April 8, showed about 829,000 more jobs added to payrolls. These are actual jobs that people are working in, not the seeming “ghost jobs” that the Wall Street Journal wrote about last month.

Robynn Storey, who’s operated Storeyline Resumes since 2000, said she doesn’t know where those recovered jobs are, but too many of the roles posted for more experienced workers feel like those ghost jobs.

“If you’re boots on the ground like we are, and talking to people who have long-term careers … they’re four, five, six, eight, 12 months into a job search and cannot get an offer,” she said, noting that one client, a woman over 50, recently lost her housing and ended up in a shelter.

“What we’re seeing here now is that people are sort of losing hope,” Storey said. “It’s just such a weird time. I don’t know how to describe it.”

Santos said that what’s significantly different about the job market now for experienced workers - besides the length of time it takes to actually get hired - is how emotionally grueling the process is.

“When you get down to the actual human experience of looking for a job in tech in 2023-24 … so many people now are putting in more than the effort they would have put in two years ago, three years ago, four and getting borderline inhumane responses if they get any response at all,” Santos said.

One automated rejection email he got was addressed, “Dear [First name]”. “That kind of insensitivity to the process,” he offered, “is different now than it ever has been before.”

 

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