Toying with numbers: Employment
I was thinking, as I frequently do, about the unemployment rate. People see the unemployment rate at 10 percent, and conclude that the United States is in a very bad position, worse than many other points in our country’s history.
But are we, really? Does a ten percent unemployment rate mean that there were more jobs out at times where there was a lower unemployment rate? I wanted to take a serious look at this presumption.
We look at the unemployment rate now, and can point to times one, five, ten, or twenty years ago where the rate was higher. But this ignores a lot of information. How well did these jobs pay? What sorts of goods could be purchased with the money from these jobs? What was the quality of life that these jobs provided?
But perhaps most importantly, we have to ask this: how many people were really employed? People seem to ignore that the unemployment rate is just that: a rate. The number is measured as a percentage of the population. And the population has grown considerably over the course of the past century.
So I decided to attempt to estimate the number of jobs that have really existed since the 1940s, and see if we really are worse off than a decade or two ago.
First, here is a graph of Unemployment in January of each year:
According to this graph, unemployment now is almost as high as it has been since 1980. This is true when you go purely by percentages. For this next graph, I attempted to incorporate population. To do this, I took the population(according to the U.S. Census) and subtracted a percentage of this population equal to the unemployment rate of that year. Presumably, this gets us close to the numbers of people working in the United States.
I’m sure anyone with knowledge of statistics is crying foul right now, so I explained a couple of problems with the data after the jump below. I should emphasize that this was an amateurish quick number-crunch, not very serious research.
What does this data mean? This chart is effectively the opposite of Unemployment – higher numbers imply more people working. And what do we observe? A steady increase in the number of jobs available over time. Even in this recession, there are approximately twice as many jobs in America now as there were in 1950. Employment has more or less kept up with the rapid increase in population, and the variations of the unemployment rate are almost negligible in this context.
Yes, there are a lot of people unemployed right now – probably more than any other time in U.S. history. But imagine if 3 million people lived in the United States in 1950. Unemployment would be well over 50 percent. We have progressed as a nation, creating the most efficient and most wealthy economy in world history. This long-term success is being overcast by short term problems, and too many people are jumping to the conclusion that we are worse off than we were in the “good old days.”
I don’t mean to ignore the problems of others. In fact, I hope this sort of data inspires them. America is continually advancing and improving its economy, and historically even the largest setbacks have only been temporary. If history repeats itself we will evolve, and we will expand.
(Statistical disclaimer follows)