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


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