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Posted: 5:00 a.m. Sunday, Oct. 7, 2012

Unemployment rate changes can mask local job market reality, economist says

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Unemployment rate changes can mask local job market reality, economist says photo
Harold Morgan, a Hamilton native now living in Lebanon, waited in long lines Sept. 11 to apply for one of the 1,200 seasonal jobs the Kohl’s distribution center in Monroe is offering.
Unemployment rate changes can mask local job market reality, economist says photo
Thousands of people waited in long lines Sept. 11 to apply for one of the 1,200 seasonal jobs at the Kohl’s distribution center in Monroe.

By Eric Schwartzberg

Staff Writer

The earnest response to temporary positions at a local distribution center shows changes in the unemployment rate can paint a misleading picture of the local job market, experts say.

Unemployment fell sharply in August across the region, including in Butler County, where the rate dropped from 8.7 percent a year ago and from 7.3 percent in July to 6.6 percent in August, according to figures released late last month by the Ohio Department of Job and Family Services.

Hamilton dropped from 9.5 percent last year and 7.9 percent in July to 7.2 percent and Middletown from 10.1 percent a year ago and 8.7 in July to 7.8 percent in August.

Despite these numbers, the September job fair at the Kohl’s distribution center in Butler County brought out thousands of area residents hoping to snag one of the 1,200 seasonal jobs.

There are two reasons the unemployment rate can go down, said Bill Even, an economist at Miami University. Either more unemployed workers found jobs or more unemployed workers simply quit looking for jobs.

“For example, if you’ve got somebody who’s close to retirement and they were laid off, they might look for a year and then finally say ‘the heck with it, I’m just going to retire’ or a younger person might say ‘the heck with it, I’m just going to go back to school,’ ” Even said. “The unemployment rate falls but it’s not really an improving job market that’s causing it. It’s that people are discouraged and quit looking.”

Harold Morgan, 34, a Butler County native now living in Warren County, was one of the people applying for the Kohl’s jobs. He said he worked as an independent contractor until the economy soured.

Temporary work at the distribution center would mean better hours and pay than the part-time jobs he has been working while completing coursework at Warren County Career Center, Morgan said.

“I graduate in April, so I’m just doing what I can to get myself through school and get into my career,” said Morgan, who has four children, ages 15, 9, 6, and 3. “Being a father, you’ve got to do what you’ve got to do.”

Morgan is an example of a trend still seen during these tough economic times when people searching for work take whatever they can get, even at a lower salary than in previous jobs.

“During the Great Recession, a lot of the long-term unemployed had to take significant pay cuts in order to become reemployed,” Even said.

While job numbers are improving, there are still going to be pockets of different types of workers who are hurting, especially people with lower levels of education and industries hit hard by the recent recession, such as construction, he said.

“To the extent that some of these seasonal job openings happen to match the kinds of jobs these long-term unemployed people can fill, that might explain the level of excitement about that,” Even said.

When examining unemployment numbers, it’s important to be careful about jumping to a conclusion about the job market.

“You probably want to look at the number of people employed, as opposed to just the unemployment rate by itself,” he said.

Not only does a region need job growth to pull itself out of economic depths, it also needs job growth that outpaces population growth.

“Generally, in order for the job market to really be improving, you need the number of jobs to be rising faster than the number of adults (added to the population),” he said.

Typically, economists look to long-term trends in population growth, Even said.

“On a national level, they talk about you have to have so many hundred thousand jobs created each month just to keep up with the growth of the population if the job market is going to remain stable and bring unemployment down,” he said.

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