Is the Great Recession Over? In CA Signals are Mixed

Susan Shelley

Columnist and member of the editorial board of the Southern California News Group, and the author of the book, “How Trump Won.”


On one hand, a recent study of U.S. Census data by the Washington, D.C.-based Economic Innovation Group found that Los Angeles County led the nation with the largest number of jobs added, a total of 352,840 between 2010 and 2014.

The good news extended statewide. Twenty counties in the U.S. accounted for half of net new businesses established in those years, and five of those counties are in California.

Yet the latest Field Poll found that 74 percent of California voters list the economy and jobs as their top concern.

Is that just habit? Or something else?

A closer look reveals a problem of definitions, starting with: What is a job?

“People are considered employed if they did any work at all for pay or profit during the survey reference week,” explains the website of the U.S. government’s Bureau of Labor Statistics, referring to its monthly survey of 60,000 households, “This includes all part-time and temporary work, as well as regular full-time, year-round employment.”

So when people pick up part-time or temporary work for a few days or even for a few hours, the government counts them as “employed” at “a job.”

Some people are counted as “employed” at “a job” even if they don’t get paid.

Here’s an example from the BLS website: “Garrett is 16 years old, and he has no job from which he receives any pay or profit. However, Garrett does help with the regular chores around his parents’ farm and spends about 20 hours each week doing so.”

Here’s another one: “Lisa spends most of her time taking care of her home and children, but she helps in her husband’s computer software business all day Friday and Saturday.”

According to the Bureau of Labor Statistics, Garrett and Lisa have “jobs.” They’re in a category called ”unpaid family workers,” which includes “anybody who worked without pay for 15 hours or more per week in a business or farm operated by a family member with whom they live.”

A neutral observer might consider Garrett and Lisa to be “unemployed,” or “struggling,” or even “a remake of ‘The Grapes of Wrath.’”

But the government doesn’t see it that way. They count Garrett, Lisa, and all the part-time and temporary workers as “employed” at “a job.”

The unemployment numbers are equally suspicious. The government defines people as “unemployed” if they “did not have a job at all during the survey reference week, made at least one specific active effort to find a job during the prior 4 weeks, and were available for work.”

That means people who have been trying to find work for months or years aren’t counted as unemployed unless they actively looked for work in the last month. They’re considered “out of the workforce.”

By counting unpaid and barely-employed workers as having “jobs,” and by refusing to count millions of Americans who want jobs but can’t find them, the alchemists at the BLS calculate that in April, the official U.S. unemployment rate was 5 percent.

Not everybody is convinced.

The Gallup Organization has invented its own measurement of employment, which it calls “Gallup Good Jobs.” A “good job” is defined as “30+ hours per week for an employer who provides a regular paycheck.”

In April, only 44.9 percent of Americans age 18 or older had “good jobs.”

Gallup has another measurement of economic pain that it calls the “underemployment” rate. It’s the total of all the unemployed people who are actively looking for work, plus the people who are working less than full-time while wishing they could find a “good job.”

In 2015, California had the nation’s highest rate of “underemployment,” 17.9 percent.

There’s a third indicator of economic distress that Gallup doesn’t measure but the Census Bureau does: the decline in salaries.

The U.S. economy added 9.1 million new jobs from 2010 to 2014, but that’s after losing 8.9 million jobs from 2008 to 2010.

Half the lost jobs were in the middle-wage sectors of the economy, including construction and manufacturing, with average salaries between $40,000 and $70,000.

But half of the 9.1 million jobs created during the recovery were in the low-wage sectors, including retail and food service, with average salaries below $40,000. Less than a third of the new jobs were in the middle-wage sectors.

On paper, the Great Recession may be over. But as they say in baseball, you don’t play this game on paper.

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