Friday, February 21, 2014

Facts about Guam's latest unemployment report

A recent anonymous commenter on my last blog post, "Running to catch up to low employment numbers" wrote the following:
So you counter hard evidence that the economy is improving with simple pessimistic conjecture? Anyone can be a naysayer, but to be a naysayer in the face of hard evidence of improvement just shows that the you take the contrarianism that Democrats have exhibited with our administration as gospel.
This criticism of my blog post is incorrect because my argument was not about whether the economy was getting better, but about the depressed state in which Guam's economy finds itself.  Obviously this comment is one piece of evidence that there is popular demand for an analysis of Guam's employment situation and whether it is, in fact, getting better.  I would certainly hope so, but let's see where the evidence leads.

Look at a snapshot of the latest unemployment report and the year-on-year changes in different measures.  According to the September 2013 unemployment report:
  • The Civilian Labor Force declined by 1,550, or 2.1%.
  • Employment declined by 1,300, or 2.0%.
  • Full Time Employment declined by 2,260, or 4.2%.
  • Part Time Employment increased by 1,520.
  • Unemployment declined by 810.
Is this hard evidence of improvement? No. Full time employment declined by about 4.2% and employment overall declined by 2.0%.  Unemployment declined but more than all of the decline in employment is accounted for in the drop in labor force participation.  Additionally, the number of people outside of the labor force who did not want a job increased by about 3,380. Is that good news? No. It is a further sign of economic stagnation: that many people have not only stopped looking for jobs, but now are telling themselves they didn't want one, in the first place.

When I approach these numbers, I prefer to actually look at ratios rather than the raw numbers, since the reported numbers are no more than estimates of the current population.  The main ratio I examine is the employment-population ratio, since it gives a good glimpse of how many of Guam's civilian population are employed. What we find is that the employment ratio was 53.7% in September 2012 but only 52.5% in September 2013, a decline of 0.8 percentage points in a year.  A curious fact is that the employment-population ratio has only been at or below 52.5% one time before the current administration, in May 1976. As I pointed out in my previous post, the employment-population ratio has remained below its rate of 54.3% in March 2011 since that point, as far as data is available.  Here is a list of quarters where employment ratio was at or lower than 54.3%:
  • May 1976: 51.2%
  • March 1982: 53.6%
  • March 2011: 54.3%
  • March 2012: 49.9%
  • June 2012: 51.9%
  • September 2012: 53.7%
  • December 2012: 53.4%
  • March 2013: 52.4%
  • June 2013: 53.7%
  • September 2013: 52.5%
Please note that only two are prior to the current administration. Unfortunately, employment remains very low and the apparent direction of change is not unambiguously positive.

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