Job trends indicate more tough times ahead for Mississippi.While the unemployment rate for Mississippi has been trending down, so has overall employment. In July of 2012, the Mississippi Department of Employment Security reported the unemployment rate was 10.3 percent and the number of people employed was 1.214 million.
In July 2013, the unemployment rate was down to 8.6 percent but the number of Mississippians employed had dropped to 1.196 million.
How can the unemployment rate fall with fewer people working?
The unemployment rate is the ratio of the difference between the civilian labor force and the number of individuals employed divided by the civilian labor force. For the unemployment rate to fall with fewer people employed, the civilian labor force number must decrease.
The civilian labor force in July 2013 totaled 1,308,300. A year earlier it totaled 1,354,200. That means the civilian labor force contracted by 45,900 people from one year to the next.
What happened to these people?
According to the guidelines for calculating civilian labor force, these are people who had been in the labor force but dropped out. They quit looking for work.
So far in 2013, Mississippi’s civilian labor force numbers for each month have been lower than the same month for 2012.
In contrast to the above, the University Research Center is reporting “unprecedented” job growth in 2013. How can this be?
The university report focuses on establishment-based employment at Mississippi businesses which does not include the self-employed, agricultural workers, and private household workers. Civilian labor force and total employment numbers include these workers (Mississippi has many of them) as well as Mississippi residents who work across state lines.
While it is good that Mississippi businesses are hiring more, the year-over-year decline in total employment and the downward trend in the civilian labor force overshadow those gains.
That same issue arises at the national level. While total employment has been growing, albeit slowly, the labor force participation rate has been trending down since 2008. The labor force participation rate is the civilian labor force divided by the population between the ages of 16 to 64. Historically, the rate has averaged between 67 and 68 percent. In August it reached its lowest point since 1978 at 63.2 percent.
Since the population factor has held steady, this decline in the labor force participation rate also shows many people dropping out of the civilian labor force and giving up looking for work.
These people, in Mississippi and elsewhere, still must support themselves. Some can rely on savings or family members for a period of time, but many must go on government assistance to survive. That’s not good, for them or taxpayers.
Job creation remains job one.
Politically driven disruptions that undermine business confidence only hurt job creation.
BILL CRAWFORD (email@example.com) is a syndicated columnist from Meridian.