The monthly unemployment rate published by the Bureau of Labor Statistics measures the number of workers who are not working and looking for work – that is, the unemployed – out of the total number of people who are either working or looking for work in a given month. But this understates the number of people who experience unemployment during any longer period, since someone who is employed in one month may become unemployed the next, and vice versa.
Yesterday, BLS released its report on “over-the-year” employment and unemployment in 2010, which measures (among other things) the share of the workforce who experienced unemployment at some point during 2010. The report finds that 15.9 percent of the workforce was unemployed at some point last year, much higher than the average monthly unemployment rate in 2010, which was 9.6 percent.
The figure shows the average monthly unemployment rate and the over-the-year unemployment rate. Using the ratio of the over-the-year unemployment rate to the average monthly unemployment rate in 2010 (the latest data available), the over-the-year unemployment rate for 2011 and 2012 are projected. According to the data, we can expect that 14.9 percent of the workforce – more than one in seven workers – will be unemployed at some point next year.
It doesn’t have to be this way. The number of people experiencing unemployment – and the scars this unemployment causes to careers, families, and communities – could be considerably reduced with substantial additional stimulus spending to generate jobs.