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How Is Employment Defined?


employment defined
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Question: How Is Employment Defined?
Answer: Each month the Bureau of Labor Statistics (BLS) issues the critical Jobs Report. It's actually two reports in one. The first surveys 160,000 non-farm businesses and agencies on their employment, wages, and hours worked. The BLS reports on which industries are growing and shrinking, whether American workers are working longer hours, and how fast salaries are increasing. This is known as the establishment survey.

The second reports on on the number of unemployed from a household survey. This also includes workers' age, sex, and race/ethnicity. The household survey has a more expansive scope than the establishment survey because it includes the self-employed,unpaid family workers, agricultural workers, and private household workers, who are excluded by the establishment survey. However, it is not as accurate as the business establishment survey because it has a smaller sample size.

Therefore, employment figures are taken from the establishment survey. Employment figures also include part-time workers. In the first stages of an economic slow-down, the number of workers stays the same, but the percentage of part-time workers increases as people cannot find enough full-time jobs. About mid-way during the slowdown, the total number of workers often decreases as even part-time jobs become unavailable.

Conversely, when the economy starts to pick up again, the first workers hired are part-time employees. That is because businesses are very hesitant to add full-time salaried employees until they know that the economy will sustain continued demand for their products and services. Once full-time employment increases, then you know the economic recovery is well underway.

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