Behind the employment headlines

Most news stories in today’s business reports will headline the 431,000 growth in payroll employment during May – the biggest increase in years. That would be great news, except for one little problem. All except 20,000 of those jobs were temporary workers hired for the Census. May was the peak month for Census employment. In June, the Census will start laying off workers, adding an estimated 200,000 to the jobless ranks, with another 100,000 layoffs each month through September.

Meanwhile, bills are stalled in Congress that would provide minimal aid to local governments to provide summer jobs for young people and prevent layoffs of up to 300,000 teachers and other workers. Without these and more far-reaching measures, spending (and jobs) from the stimulus bill (passed in February 2009) will start winding down. There is a real danger that the official unemployment rate will again move up past 10 percent.

The official jobless rate for June dropped from 9.9 percent to 9.7 percent. This was partly due to the temporary Census hiring. But it also reflected the disappearance of about 400,000 from the labor force – workers who have given up looking for jobs. These are the hidden unemployed. Including everyone who would work if jobs were available, and those who work part-time but want a full-time job, there are more than 30 million unemployed and underemployed in the United States, for a real unemployment rate of about 20 percent.

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