Level of underutilized workers worrisome issue for Indiana

“There’s a whole bunch of people in Indiana who have given up looking for jobs,” Guy Matins declared over breakfast.

“Not as many as you may think,” I responded. “And you have to understand these figures come from sophisticated and elaborate models developed by the U.S. Bureau of Labor Statistics. They’re not based simply on counting Hoosiers; a variety of statistical techniques are involved.”

“Involved, convoluted, confusing, whatever,” Guy rebuffed my caution. “Let’s just have the number and not the lecture.”

“Around 16,600 workers in 2014 may have stopped searching for a job because they didn’t believe there were any jobs they could get,” I said.

“Around 16,600,” he repeated. “And you say that’s not much! I’d say that’s plenty; in fact, that’s too many.”

“Well,” I countered, ignoring the fact that he misstated what I had said, “these discouraged workers, if you include them into the process, account for just 0.4 percent of the 3.2 million labor force in the state. That’s only four in a thousand,” I explained.

“It’s 16,600 people who would be working if they hadn’t dropped out,” Guy persisted.

“Dropping out of the labor force is not necessarily something bad,” I said, recognizing that my words would be heretical in some circles. “Not everyone should have a job; some people are better off going to school or providing care to a family member.”

“But they’d take a job if they thought one was out there for them,” Guy insisted.

“Yes,” I agreed, “but that doesn’t prove they would be better off. It’s far different from the estimated 131,300 Hoosiers in 2014 holding part-time jobs while desiring full-time employment. That may be a far more serious problem.”

“Then the unemployment numbers don’t tell the truth,” Guy proclaimed, attracting attention away from the screeching baby at the next table.

“You can’t say that,” I said. “These are the best estimates, made by honest, intelligent professionals working with inadequate data.”

“Blah, blah, blah,” he replied. “Standard cover-up by an economist for the bad data at the base of his dysfunctional profession.”

I was offended but delayed for a moment putting jelly on my English muffin.

“Come on,” he urged. “What’s the real unemployment rate in Indiana?”

“In 2014, unemployment averaged 6.1 percent in Indiana,” I said. “If you count in the part-timers who want full-time jobs, the discouraged workers and others who had not looked for work in the past four weeks, but say they wanted jobs, then Indiana’s unemployment rate soars from 6.1 to 11.3 percent for the year.”

“So the truth is out there,” Guy proclaimed. “The rate we hear all the time is about half the real rate.”

“What you call the real rate,” I said. “The official rate used everywhere was 6.1 percent. The numbers on underutilized workers are released by the Bureau of Labor Statistics, but no one pays attention, unless they have an ax to grind.”

I swallowed my coffee and left.

Morton Marcus is an economist, formerly with the Indiana University Kelley School of Business. Send comments to dr-editorial@greenfieldreporter.com.