Welcome to a new semi-regular feature here at Snark-Infested Waters, where I will occasionally look into claims made by candidates for office.
My goal is not to make any given candidate look good or bad (so kindly save your accusations of bias) but to provide context for statements made over the course of the campaign year. I welcome comments that confirm or refute my findings, and if you hear a politician saying something that sounds a bit suspect, let me know at bailey@capenews.net.
To christen this feature, I’ll start with a comment made by Thomas F. Keyes, the Sandwich Republican running against Senate President Therese M. Murray (D – Plymouth), at his campaign kick-off event this past weekend. He took a slightly different tack when addressing the old stand-by issues of economic and job growth:
“The incumbent says things are going well because unemployment is at 6.8 percent. That’s nothing to be proud of. Unfortunately, that figure doesn’t account for all of the people who are underemployed. These are individuals who have had to take a lesser job or a job out of their field to make ends meet. Right now, Massachusetts has an underemployment rate of 8.9%. Let me say that again – it is 8.9 percent. We are the highest in the nation. When you combine underemployed and unemployed we have an employment problem of 15.7 percent.”
First, let’s put the unemployment issue into context. On March 8, the Massachusetts Executive Office of Labor and Workforce Development announced that as of January 2012, the unemployment rate in Massachusetts was 6.9 percent — slightly higher than the figure Mr. Keyes quoted, but that number has not changed from December 2011 and is the lowest rate since December 2008.
Combine that with the fact the national unemployment rate is currently 8.3 percent, and that Massachusetts is tied for the 16th lowest unemployment rate in the country, things look decent for Massachusetts — decent, but not fantastic.
Now we move on the the “underemployment” claim, and first we need to distinguish between the two definitions of “underemployment” in play here.
The figure Mr. Keyes quoted was from a New Jobs for Massachusetts/Chmura Economics and Analytics study from December 2011, which looked at workers’ potential based on their education and training and compares it to their employment status; a person working one or more level below his level of qualification is considered underemployed.
To provide a simplistic example: if a man with a master’s degree in his chosen field is working a job that only requires a bachelor’s degree, he is underemployed.
The report “does not reflect workers who could be considered underemployed because their salary has dropped more than 30% from its peak, or because they are supervising half or fewer of the people they used to supervise.” In other words, New Jobs for Massachusetts places more weight on what a worker could be doing based on their qualifications rather than their income.
Or the number of hours worked, and that is how the federal government defines underemployment. The US Department of Labor’s Bureau of Labor Statistics defines underemployed Americans as people willing and able to work full-time but who work part-time for economic reasons (e.g., they had their hours cut or cannot find full-time work).
For the sake of comparison, we’ll look at the DoL’s “U-6″ standard for measuring unemployment, which includes the unemployed, the underemployed (as per its definition), and all “marginally attached workers,” a category that includes “discouraged workers”.
(Both marginally attached and discouraged workers are defined as people able and willing to work, and who have looked for a job within the preceding 12 months of the data collection but not within the preceding four weeks. The difference is that discouraged workers stopped looking for work specifically because they do not believe there is work available, while marginally attached workers cite any reason for giving up on their job hunting — a fine distinction that is not wholly relevant to this analysis, but is mentioned for sake of presenting complete information.)
According to the DoL, Nevada actually has the highest total unemployment/underemployment rate at 22.7 percent. Massachusetts’ unemployment/underemployment rate as per the U-6 measure is 14.3 percent, which ties it for 33rd place with New York — again, decent but not spectacular, but below Mr. Keyes’ quoted total “unemployment problem” of 15.7 percent.
A recent Gallup poll more closely matches the DoL’s definition for underemployed; Gallup considers someone underemployed if they were totally jobless or were working fewer than 30 hours a week but wanted to work full-time. Based on that criteria, Gallup claimed the national average underemployment rate for 2011 was 18 to 20.9 percent. Massachusetts’ underemployment rate was 15 to 17.9 percent, placing it in the low end of Gallup’s “average” range — a downgrade from 2010, when Massachusetts recorded a below-average underemployment rate.
Once again, by this yardstick Massachusetts is doing fairly well, but not great.
Mr. Keyes’ statement paints a grimmer picture than Sen. Murray’s, which is not surprising since he’s trying to portray the incumbent as ineffectual on job growth and thus bolster his own image, but is his measure a more accurate picture of the state’s job situation?
This depends entirely on whether you regard underemployment as a reflection of one’s job status in terms of full-time versus part-time, as per the DoL and Gallup, or in terms of qualified for A-list work but stuck in a B-list (or lower) job.
Either way, it could be reasonably inferred that an underemployed individual is making less than his full earning potential, and in a worst-case scenario, that means an individual is relying on some form of public assistance and not contributing as much to the very same tax base that supports such programs.
CONCLUSIONS
Massachusetts is faring well in a national context and certainly could be doing worse, but it could also be doing better. Economic recovery in the state is still very much a work-in-progress, but historical employment data is showing a steady, long-term trend toward reducing unemployment. We’re on the right track, certainly.
All three studies cited here are valid measures of underemployment, but they share a similar flaw: they do not go into detail about the economics of underemployment. There is no mention of how working below one’s capacity, whether that is measured in hours or credentials, affects one’s income, which plays into any number of related issues. How many underemployed people are resorting to public assistance to make ends meet? How many are able to pay their expenses but cannot indulge in discretionary spending? How many have been forced to simply adopt a less extravagant but perfectly adequate lifestyle? These are questions that deserve answers.
Mr. Keyes brings much-needed attention to the issue of the underemployed. Adding that data to the mix provides a more textured perspective on the state’s and the nation’s job market and efforts in job creation, but Mr. Keyes chose to present numbers that put Massachusetts — and by extension his opponent — in a worse light; two other valid measures indicate that Massachusetts is not as bad off as New Jobs for Massachusetts says it is.
If Mr. Keyes wishes to have an honest discussion about underemployment, he should consider multiple sources of data rather than just those with an immediate political benefit — and should he win the race and find himself in a position to address the issue, he will need to have a complete picture before him if he is going to find the best remedy. It’s in his best political interests and, potentially, the best interests of his constituents to look at all the data.
Tags: Senate President Therese Murray, State Senate - Plymouth & Barnstable, Tom Keyes
The views and opinions in the Enterprise blogs are those of the author and are not neccessarily shared by Falmouth Publishing.
Thank you, Mike, for your interesting analysis of this candidate’s press release as it affects the debate on quality of employment.
My organization, New Jobs for Massachusetts, encouraged Chmura Economics to develop and publish its statistics comparing all the states on one type of under-employment, the mismatch between an employed person’s education and the educational demands of their work. We also encourage the legislature, the media, and candidates of any party to use these facts.
Chmura’s analysis of US BLS and US Census public statistics showed that 8.9% of the Mass employed workforce was working below their educational level. Massachusetts’ 8.9% figure is the highest of the 50 states. New Jersey is second, at 6.7%. Our Mass number is 33% higher than New Jersey’s number, a big difference. This says people are having trouble finding work that suits their training. Chmura’s number is new, it’s never been calculated before.
We could find no statistics on the proportion of people working 30% or more below their former pay level, nor on people supervising half or fewer of the people they used to supervise.
One of many policy issues with under-employment is Mass’ pride in its educated labor force. Everyone feels it: Mass has more than 100 colleges and universities that graduate nearly 90,000 degreed students every year.
Do we want Mass to be in the position of producing 90,000 well-educated individuals, then telling these new “customers” that they should take their new degrees elsewhere? Do we want our Harvard dorm-room inventions like Facebook growing and going public in California, as a matter of policy? Wouldn’t relaxing our legal barriers to job growth benefit everyone? Have you read about California’s tax windfall from Facebook’s IPO?
Mass’ 8.9% under-employed represent roughly 290,000 people who—with their families — have invested in their education but are currently in jobs that do not reward the extra investment. Very few people purposely ignore their own job potential, certainly not in large numbers like these.
Mass is a very hard-working state, and the work force here expects to work, not goof off. These 290,000 under-employed individuals are frustrated by their inability to find work that rewards them. Lack of job growth means their current income is lower, their prospects are dimmer, and their attachment to living here is looser.
The various measures of under-employment you mentioned become public policy issues when more than four Gillette stadiums full of people cannot improve on their current job.
Massachusetts just lost a Congressional seat because people chose to live somewhere rather else than here. That widespread preference is a public policy issue. Mass could resume being a job-creation dynamo, a good subject for public debate.
Thanks for your interesting write-up.
(Note: Mr. Hruby is president of New Jobs for Massachusetts Inc.)