Unemployment has a hidden underside
By DAVID BATES
March 11, 2009
The Oregon Employment Department's latest snapshot of carnage in the job market estimates 5,579 members of Yamhill County's civilian labor force are unemployed.
But Misty Vandiver isn't included in the count.
A few years ago, the 29-year-old McMinnville woman tumbled from a $40,000-a-year insurance job in Oklahoma to a local homeless shelter, where she lived several months after serving time in the county jail for drug possession.
Relentlessly optimistic, Vandiver - after walking out of jail with just $3 in her pocket - got her act together. Now she has her own place.
She also has a job. She works as a barista at Cornerstone Coffee, where she sings occasionally.
But she only gets 30 hours a week.
Would she work 40 if she could? "Heck yeah!" she said.
Vandiver, along with thousands of others across Oregon, is among those workers whose less than full employment situation flies beneath the radar economists use to calculate the official unemployment rate each month.
Technically speaking, she's not unemployed; she's underemployed. The federal government does have a measure to pick up part-time workers who would rather be working full time.
However, it isn't widely known or circulated. And it still doesn't pick up one element of the underemployed - someone with a master's degree who's been reduced to working 40 hours a week at Wal-Mart, for example.
"Our data does have some limitations," said Patrick O'Conner, the state economist responsible for crunching Yamhill County's job numbers. "It's a statistical measure, and a very good way to track economic trends in the area. But it does have its limitations.
In Yamhill County, with a civilian labor force now topping 49,000, unemployment slipped above 10 percent in January. That rate put the county in the company of hard-hit states like California and Rhode Island, and will surely rise again when February's numbers are released around the first of April.
The "other unemployment rate," as it was termed recently in a recent Wall Street Journal blog, isn't exactly a state secret. Economists do consider people like Vandiver, and the numbers are calculated and published by the U.S. Department of Labor.
However, those numbers don't typically get marquee attention in the media. In fact, they don't typically get any attention at all.
In January, the national unemployment rate was calculated at 7.6 percent. But a broader measure, one that takes into account workers like Vandiver, and others not fitting the narrower definition used to calculate the official rate, pegged unemployment nationally at nearly 14 percent.
That figure, according to the Journal, is the highest since the government started breaking out the data separately in 1994. In fact, it's just shy of the record for an even broader measure, no longer calculated, which hit 15 percent at the height of the 1980s recession.
At the time, the nation's official unemployment rate was 10.8 percent - about four percentage points lower.
Vandiver falls into the U.S. Department of Labor's "U-6" category - the broadest of the six it still tracks. The agency's midrange U-3 rate is the one that gets all the headline attention, with U-6 and the others going largely unnoticed, at least by the general public.
O'Conner said state economists developed rough estimates of what the other rates would have worked out to in Oregon in December, including the broadest, most inclusive U-6 rate.
Brace yourself for this one: In December, when statewide unemployment hit a 23-year high of 9 percent, the U-6 rate that probably best reflects reality on the ground came in just shy of 17 percent. What's more, the unemployment picture deteriorated significantly in January, and - given that national unemployment bolted past 8 percent in February -is widely thought to have continued deteriorating.
"The U-6 rate is a very important rate to look at," O'Conner said. "It's scary that one in six Oregon workers is either unemployed, a discouraged worker or underemployed due to only part-time work being available."
"It is really bad," agreed state Sen. Brian Boquist, the Polk County Republican who represents most of Yamhill County. "Salem has its head in the sand as to the depth of the disaster facing Oregon."
Boquist thinks the "real" unemployment rate is probably even worse than the U-6 rate, because the U.S. Department of Labor's definition of "civilian labor force" scoops up a lot of high schoolers.
"This includes all those over the age of 16 who can work," Boquist said. "What would happen if those ages 16 and 17, who are actually in high school, were dropped from the calculations? The rate could jump well above 20 percent."
Getting one's arms around the unemployment rate isn't easy, officials say.
Economists use a variety of tools. They conduct phone surveys of both businesses and households, evaluate state tax withholding and unemployment insurance records, and review media reports.
The "unemployed" clearly includes someone like Brenda Fields, a McMinnville woman who moved here in 1996 with her husband, Kelly, and two grown children.
She went to work for Newberg-based PPM Technologies, which manufactures food processing equipment, starting as a part-time accounting clerk. She advanced to a management position and survived three rounds of layoffs before getting a pink slip in January.
Fields has applied for about 20 jobs so far.
On Monday, she'll interview for an office job in Salem, emerging from a field of 136 after surviving a high-stakes typing test. "I was so nervous," she said, "I could barely keep my hands on the keyboard."
Her situation is relatively clear-cut.
Less so is that of their son, who lives with them and just got part-time work at WinCo. Same story for their daughter Ally, a Portland resident who lost her full-time job at a video game store and never collected unemployment benefits - thus escaping that measure of the economy's health - before landing part-time work at a theater.
"She's definitely not in the rolls of the unemployed," Fields said. "But she's not fully employed, either."
It's not until you consider the situation of Brenda's husband Kelly that the nuances and shortcomings of the state's labor market analysis become clear.
He spent last week at home -not on the crane at Cascade Steel Rolling Mills in McMinnville, where he's worked for more than a decade.
There's not enough work to keep him on the job regularly. It's nothing like six months ago, he said, when Cascade's crews raced to keep up with orders for rebar.
Fields explains the irony of the situation this way: Unlike Yamhill County's 5,579 officially unemployed workers, he's still working full-time - but only, he notes, "when I'm working."
"We're working the barest minimum number of hours the company can afford to keep the place going right now," he said. "We're in a temporary layoff situation, where we're working only as much as the orders allow."
He's actually working full-time. It's just that he's only getting the chance to do that part of the time - something official measures don't necessarily catch.
Timing also comes into play.
Fields didn't work last week at all. He isn't slated to return to his job at the mill until March 11.
Ironically, that's the week state economists will use to determine employment levels for March. And if he works so much as one hour that week, he will be considered fully employed.
"The increased number of furloughs or short-term layoffs we are seeing in the current economy may or may not be captured in our rates, depending when they occur during the month," O'Conner said.
Kelly and Brenda Fields, both in their 40s, were already acting responsibly when they were both working full-time on a full-time basis. Two years ago, they started listening to Dave Ramsey, a syndicated radio personality who offers family finance advice from a Christian perspective.
They trimmed spending, got serious about a monthly budget, refinanced their home, paid off and cut up their credit cards, bundled as many utilities as they could and started an emergency fund.
Since being sucked into the economic storm, they've cut spending to the bone. They don't eat out. They shop at Goodwill.
Yet, all but one member of the Fields family has, strictly speaking, a job. So it could be worse, and is for many.
"If you'd asked me about this six months ago, I would have laughed, because we couldn't keep up with the orders we had," Kelly Fields said of his mill job. "Now, you can't get overtime to save your life."
Vandiver also has a home and a job, one she likes. She's eligible for food stamps, but declines to use them because she figures others need them more than she does.
Between rent and health care costs chewing up most of her paycheck, and roughly $40 a month budgeted for milk, eggs, bread, jelly and Ramen noodles, she's keenly aware of how close she is to landing in a homeless shelter again.
"Right now with my rent and everything the way it is, I have no money left at the end of the month, "she said. "One bad month of budgeting, and I'd be back there."
But Misty Vandiver isn't included in the count.
A few years ago, the 29-year-old McMinnville woman tumbled from a $40,000-a-year insurance job in Oklahoma to a local homeless shelter, where she lived several months after serving time in the county jail for drug possession.
Relentlessly optimistic, Vandiver - after walking out of jail with just $3 in her pocket - got her act together. Now she has her own place.
She also has a job. She works as a barista at Cornerstone Coffee, where she sings occasionally.
But she only gets 30 hours a week.
Would she work 40 if she could? "Heck yeah!" she said.
Vandiver, along with thousands of others across Oregon, is among those workers whose less than full employment situation flies beneath the radar economists use to calculate the official unemployment rate each month.
Technically speaking, she's not unemployed; she's underemployed. The federal government does have a measure to pick up part-time workers who would rather be working full time.
However, it isn't widely known or circulated. And it still doesn't pick up one element of the underemployed - someone with a master's degree who's been reduced to working 40 hours a week at Wal-Mart, for example.
"Our data does have some limitations," said Patrick O'Conner, the state economist responsible for crunching Yamhill County's job numbers. "It's a statistical measure, and a very good way to track economic trends in the area. But it does have its limitations.
In Yamhill County, with a civilian labor force now topping 49,000, unemployment slipped above 10 percent in January. That rate put the county in the company of hard-hit states like California and Rhode Island, and will surely rise again when February's numbers are released around the first of April.
The "other unemployment rate," as it was termed recently in a recent Wall Street Journal blog, isn't exactly a state secret. Economists do consider people like Vandiver, and the numbers are calculated and published by the U.S. Department of Labor.
However, those numbers don't typically get marquee attention in the media. In fact, they don't typically get any attention at all.
In January, the national unemployment rate was calculated at 7.6 percent. But a broader measure, one that takes into account workers like Vandiver, and others not fitting the narrower definition used to calculate the official rate, pegged unemployment nationally at nearly 14 percent.
That figure, according to the Journal, is the highest since the government started breaking out the data separately in 1994. In fact, it's just shy of the record for an even broader measure, no longer calculated, which hit 15 percent at the height of the 1980s recession.
At the time, the nation's official unemployment rate was 10.8 percent - about four percentage points lower.
Vandiver falls into the U.S. Department of Labor's "U-6" category - the broadest of the six it still tracks. The agency's midrange U-3 rate is the one that gets all the headline attention, with U-6 and the others going largely unnoticed, at least by the general public.
O'Conner said state economists developed rough estimates of what the other rates would have worked out to in Oregon in December, including the broadest, most inclusive U-6 rate.
Brace yourself for this one: In December, when statewide unemployment hit a 23-year high of 9 percent, the U-6 rate that probably best reflects reality on the ground came in just shy of 17 percent. What's more, the unemployment picture deteriorated significantly in January, and - given that national unemployment bolted past 8 percent in February -is widely thought to have continued deteriorating.
"The U-6 rate is a very important rate to look at," O'Conner said. "It's scary that one in six Oregon workers is either unemployed, a discouraged worker or underemployed due to only part-time work being available."
"It is really bad," agreed state Sen. Brian Boquist, the Polk County Republican who represents most of Yamhill County. "Salem has its head in the sand as to the depth of the disaster facing Oregon."
Boquist thinks the "real" unemployment rate is probably even worse than the U-6 rate, because the U.S. Department of Labor's definition of "civilian labor force" scoops up a lot of high schoolers.
"This includes all those over the age of 16 who can work," Boquist said. "What would happen if those ages 16 and 17, who are actually in high school, were dropped from the calculations? The rate could jump well above 20 percent."
Getting one's arms around the unemployment rate isn't easy, officials say.
Economists use a variety of tools. They conduct phone surveys of both businesses and households, evaluate state tax withholding and unemployment insurance records, and review media reports.
The "unemployed" clearly includes someone like Brenda Fields, a McMinnville woman who moved here in 1996 with her husband, Kelly, and two grown children.
She went to work for Newberg-based PPM Technologies, which manufactures food processing equipment, starting as a part-time accounting clerk. She advanced to a management position and survived three rounds of layoffs before getting a pink slip in January.
Fields has applied for about 20 jobs so far.
On Monday, she'll interview for an office job in Salem, emerging from a field of 136 after surviving a high-stakes typing test. "I was so nervous," she said, "I could barely keep my hands on the keyboard."
Her situation is relatively clear-cut.
Less so is that of their son, who lives with them and just got part-time work at WinCo. Same story for their daughter Ally, a Portland resident who lost her full-time job at a video game store and never collected unemployment benefits - thus escaping that measure of the economy's health - before landing part-time work at a theater.
"She's definitely not in the rolls of the unemployed," Fields said. "But she's not fully employed, either."
It's not until you consider the situation of Brenda's husband Kelly that the nuances and shortcomings of the state's labor market analysis become clear.
He spent last week at home -not on the crane at Cascade Steel Rolling Mills in McMinnville, where he's worked for more than a decade.
There's not enough work to keep him on the job regularly. It's nothing like six months ago, he said, when Cascade's crews raced to keep up with orders for rebar.
Fields explains the irony of the situation this way: Unlike Yamhill County's 5,579 officially unemployed workers, he's still working full-time - but only, he notes, "when I'm working."
"We're working the barest minimum number of hours the company can afford to keep the place going right now," he said. "We're in a temporary layoff situation, where we're working only as much as the orders allow."
He's actually working full-time. It's just that he's only getting the chance to do that part of the time - something official measures don't necessarily catch.
Timing also comes into play.
Fields didn't work last week at all. He isn't slated to return to his job at the mill until March 11.
Ironically, that's the week state economists will use to determine employment levels for March. And if he works so much as one hour that week, he will be considered fully employed.
"The increased number of furloughs or short-term layoffs we are seeing in the current economy may or may not be captured in our rates, depending when they occur during the month," O'Conner said.
Kelly and Brenda Fields, both in their 40s, were already acting responsibly when they were both working full-time on a full-time basis. Two years ago, they started listening to Dave Ramsey, a syndicated radio personality who offers family finance advice from a Christian perspective.
They trimmed spending, got serious about a monthly budget, refinanced their home, paid off and cut up their credit cards, bundled as many utilities as they could and started an emergency fund.
Since being sucked into the economic storm, they've cut spending to the bone. They don't eat out. They shop at Goodwill.
Yet, all but one member of the Fields family has, strictly speaking, a job. So it could be worse, and is for many.
"If you'd asked me about this six months ago, I would have laughed, because we couldn't keep up with the orders we had," Kelly Fields said of his mill job. "Now, you can't get overtime to save your life."
Vandiver also has a home and a job, one she likes. She's eligible for food stamps, but declines to use them because she figures others need them more than she does.
Between rent and health care costs chewing up most of her paycheck, and roughly $40 a month budgeted for milk, eggs, bread, jelly and Ramen noodles, she's keenly aware of how close she is to landing in a homeless shelter again.
"Right now with my rent and everything the way it is, I have no money left at the end of the month, "she said. "One bad month of budgeting, and I'd be back there."
