Unemployment in January fell to 7.4 percent from 9.3 percent a year ago. That sounds good, right?

But numbers can be deceiving.

Here’s how:

The Syracuse area (Onondaga, Oswego and Madison counties) labor force fell from 320,700 people to 314,000. The labor force is the number of people who are working or unemployed, but actively looking for work.

That’s a loss of 6,700 people. The number of people unemployed shrank by almost the same amount: 6,400 people.

Most of us assume that when the unemployment rate goes down, it means more people are working. Sometimes, that’s the case.

But what it really means is that the number of people who said they didn’t have a job, but were actively looking for work, shrank. People who become discouraged and drop out of the labor force are not counted.

Economists refer to that as “hidden unemployment.”

So if you assume that the 6,700 people the labor force lost are still here, but unemployed and simply no longer looking for work, the recalculated unemployment rate goes to more than 9 percent. That’s not so good.

Karen Knapik-Scalzo, an analyst with the state Department of Labor in Syracuse, said some of that loss in the labor force is part of a national trend of aging workers deciding to retire. She said there are fewer younger workers entering the job market to take their place.

Knapik-Scalzo said the Syracuse area’s unemployment numbers are in line with the state and national numbers, so there isn’t cause to worry.

Knapik-Scalzo also pointed out that, over the year, the region has added jobs. The numbers showed a growth of 700 private sector jobs.

But E.J. McMahon, president of the Empire Center for New York State Policy, said the job growth barely counts. It’s an increase of less than one percent, he said.

McMahon said the region is graying at a faster pace that the rest of the state because it doesn’t have enough job growth to attract and keep young people.

He also said it’s likely that a significant number of those 6,700 people who left the labor force likely are discouraged workers who are no longer being counted. 

“If you live there, it’s already dawned on you” that it’s still hard to find a good job, McMahon said.

 © 2014, Syracuse Post-Standard

Tags:

You may also like

The good, the bad and the ugly in Cuomo’s budget

“We are at the early stages of what shapes up as the biggest state and city fiscal crisis since the Great Depression,” said E.J. McMahon of the Empire Center. “Borrowing and short-term cuts aside, the budget doesn’t chart any clear path out of it.” Read More

Economic Experts Discuss Long-Term Impacts of Coronavirus

"My prediction for now is this is going to be the most severe and prolonged fiscal crisis New York state and its local governments have seen, really since the Great Depression when government did not operate at the scale it now operates," Empire Center Research Director E.J. McMahon said. Read More

Economic inequality continues rising in Capital Region, U.S.

Opponents of a higher minimum wage, like the Empire Center for Public Policy, have argued that a gradual minimum wage increase would increase employer overhead and cost the state up to 200,000 jobs — and at least 11,000 in the Capital Region alone. Read More

Film-tax credits: New York subsidies equaled $40,800 a job

New York has dished out more on film-tax credits since 2003, about $5 billion overall, than it would have on the Amazon deal, E.J. McMahon, founder of the Empire Center for Public Policy, a fiscally conservative think tank in Albany. Read More

How big Wall Street bonuses are a boon for LI

E.J. McMahon of the Empire Center for Public Policy, a fiscally conservative think tank based in Albany, breaks it down: The state has a 4 percent sales tax, and Nassau and Suffolk each have a 4.25 percent sales tax. Read More

Million-dollar earners in New York fell as concerns grow over rich leaving to other states

Cuomo's claims are likely overstating the immediate impact of the deduction cap, said E.J. McMahon, founder of the Empire Center, a fiscally conservative think tank in Albany. It's simply too soon to know if people have fled the state because of the so-called SALT cap, McMahon said. Read More

Economic gap widens between upstate and downstate New York

It’s a tale of two states — upstate and downstate. Upstate New York’s economy has added just 6.3 percent more jobs since 2010, among the worst performances in the nation, according to a study released Tuesday. Read More

Richard Brodsky: Cuomo and Molinaro are both intent on ignoring the truth

The upstate economy continues to stagnate, with consequent financial and social problems. The downstate economy continues to boom, with different problems and its own warning signs. No surprise. This latest evidence of New York's economic reality comes from the Empire Center and its estimable grey eminence E.J. McMahon. It's a well-crafted analysis and consistent with dozens of other such reports. Read More