[Joint House and Senate Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
S. Hrg. 109-237
THE EMPLOYMENT SITUATION: OCTOBER 2005
=======================================================================
HEARING
before the
JOINT ECONOMIC COMMITTEE
CONGRESS OF THE UNITED STATES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
NOVEMBER 4, 2005
__________
Printed for the use of the Joint Economic Committee
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JOINT ECONOMIC COMMITTEE
[Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]
HOUSE OF REPRESENTATIVES SENATE
Jim Saxton, New Jersey, Chairman Robert F. Bennett, Utah, Vice
Paul Ryan, Wisconsin Chairman
Phil English, Pennsylvania Sam Brownback, Kansas
Ron Paul, Texas John E. Sununu, New Hampshire
Kevin Brady, Texas Jim DeMint, South Carolina
Thaddeus G. McCotter, Michigan Jeff Sessions, Alabama
Carolyn B. Maloney, New York John Cornyn, Texas
Maurice D. Hinchey, New York Jack Reed, Rhode Island
Loretta Sanchez, California Edward M. Kennedy, Massachusetts
Elijah E. Cummings, Maryland Paul S. Sarbanes, Maryland
Jeff Bingaman, New Mexico
Christopher J. Frenze, Executive Director
Chad Stone, Minority Staff Director
C O N T E N T S
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Opening Statement of Members
Hon. Jim Saxton, Chairman, a U.S. Representative from the State
of New Jersey.................................................. 1
Hon. Jack Reed, Ranking Minority Member, a U.S. Senator from the
State of Rhode Island.......................................... 2
Witnesses
Statement of Hon. Kathleen P. Utgoff, Commissioner, Bureau of
Labor Statistics; accompanied by John S. Greenlees, Associate
Commissioner, Offices of Prices and Living Conditions and John
M. Galvin, Associate Commissioner, Employment and Unemployment
Statistics..................................................... 3
Submissions for the Record
Prepared statement of Representative Jim Saxton.................. 15
Prepared statement of Senator Jack Reed, Ranking Minority Member. 16
Prepared statement of Commissioner Kathleen P. Utgoff, together
with Press Release No. 05-2118, entitled, ``The Employment
Situation: October 2005,'' Bureau of Labor Statistics,
Department of Labor............................................ 17
Response of Commissioner Kathleen P. Utgoff to question of
studies on earnings on women and men........................... 47
THE EMPLOYMENT SITUATION:
OCTOBER 2005
----------
FRIDAY, NOVEMBER 4, 2005
Congress of the United States,
Joint Economic Committee,
Washington, DC
The Committee met, pursuant to call, at 9:30 a.m., in room
2226, Rayburn House Office Building, the Honorable Jim Saxton,
Chairman of the Committee, presiding.
Representatives present: Representatives Saxton, McCotter,
and Maloney.
Senator present. Senator Reed.
Staff present: Chris Frenze, Robert Keleher, Colleen Healy,
John Kachtik, Brian Higginbotham, Emily Gigena, Chad Stone,
Matt Salomon, and Daphne Clones.
OPENING STATEMENT OF HON. JIM SAXTON, CHAIRMAN,
A U.S. REPRESENTATIVE FROM NEW JERSEY
Representative Saxton. Good morning. It is a pleasure to
welcome Commissioner Utgoff before the Committee once again to
testify on the employment situation.
The employment figures released today may reflect the
indirect affects of the recent hurricanes. Payroll employment
increased by 56,000 in October to a total level of 134.1
million workers. According to the separate household survey,
the unemployment rate edged down to 5.0 percent, a decrease of
one tenth of a percentage point.
Other standard economic indicators reflect the health of
the U.S. economy. Figures released last week indicate that the
economy grew at a 3.8 percent rate in the last quarter of this
year, despite the massive regional destruction wrought by the
hurricanes.
So far in 2005, the economy has expanded at a 3.6 percent
rate, roughly in line with the Federal Reserve expectations as
well as the Blue Chip Consensus indicators. Equipment and
software investment, which has bolstered the economy since
2003, continues at a healthy pace. This component of investment
responded especially sharply to the incentives contained in the
2003 tax legislation.
Employment has also gained over the period, with 4.2
million jobs added to business payrolls since May of 2003. The
unemployment rate, as I said a minute ago, is at 5 percent.
Consumer spending continues to grow. Home ownership has reached
record highs. Household net worth is also at record levels.
Productivity growth continues at a high pace, although higher
energy prices have raised business costs and imposed hardship
on many consumers. These energy prices have not derailed the
expansion.
In summary, the economy has displayed impressive
flexibility and resilience in absorbing many shocks. Monetary
policy and tax incentives for investment have made important
contributions in accelerating the expansion in recent years.
The most recent release of Fed minutes indicates that the
central bank expects the economic growth to continue through
2006. The Blue Chip Consensus of private economic forecasters
also suggests that the economy will grow in excess of 3 percent
next year, and that employment will continue to rise.
[The prepared statement of Representative Saxton appears in
the Submissions for the Record on page 15.]
OPENING STATEMENT OF HON. JACK REED, A U.S. SENATOR FROM RHODE
ISLAND
Representative Saxton. I would like to ask our Ranking
Member if he would like to make a statement at this point.
Senator Reed. Thank you very much, Chairman Saxton, thank
you, Commissioner and your staff, for joining us this morning.
This hearing gives us the opportunity to continue examining the
impact of the recent hurricanes on the jobs data and to try to
discern underlying trends in the labor market. I want to
commend Commissioner Utgoff for the hard work her staff at the
Bureau of Labor Statistics has put into producing these
statistics under extraordinary circumstances, particularly the
hurricane.
As measured by initial claims for unemployment insurance,
the number of people who have lost their jobs due to Hurricanes
Katrina and Rita has now exceeded the half million mark, and
more job losses are expected from Hurricane Wilma. In the
coming months I hope the reconstruction efforts will stimulate
a recovery in jobs throughout the region.
Beyond the hurricane-affected areas, the labor market
showed signs of losing strength. For the economy as a whole,
this month's BLS report shows that only 50,000 net jobs were
created. It appears high gas prices may be squeezing employers
as well as consumers.
Even before the hurricanes, the labor market was still
feeling the effects of the most protracted job slump in
decades. Cumulative payroll employment growth has been modest
by the standards of most economic recoveries, and we continue
to see evidence of hidden unemployment, with labor force
participation and the fraction of the population with a job
still at depressed levels.
The typical worker's earnings are not keeping up with
rising living expenses, which is squeezing family budgets.
Gasoline prices have been high, and home heating costs are
expected to be substantially higher this winter than they were
last winter. In the past year, real wages have fallen
throughout the earnings distribution, with the largest declines
in the bottom half.
I am pleased that President Bush reversed his unwise
decision to suspend the Davis-Bacon Act in the hurricane-
ravaged areas and restored Federal wage protection for workers
on Federal contracts. But the President's steadfast refusal to
support an increase in the minimum wage still makes it hard to
take seriously his rhetoric about wanting to lift families out
of poverty.
I look forward to the Commissioner's statements and further
discussion of the October employment situation. Thank you.
[The prepared statement of Senator Reed appears in the
Submissions for the Record on page 16.]
Representative Saxton. Commissioner Utgoff, we will be
pleased to hear from you at this time. Thank you.
STATEMENT OF KATHLEEN P. UTGOFF, COMMISSIONER, BUREAU OF LABOR
STATISTICS, U.S. DEPARTMENT OF LABOR; ACCOMPANIED BY JOHN M.
GALVIN, ASSOCIATE COMMISSIONER FOR EMPLOYMENT AND UNEMPLOYMENT
STATISTICS AND JOHN S. GREENLEES, ASSOCIATE COMMISSIONER FOR
PRICES AND LIVING CONDITIONS
Commissioner Utgoff. Thank you very much, Mr. Chairman and
members of the Committee. I appreciate this opportunity to
comment on the labor market data we released this morning. I
would also like to say that I have with me Jack Galvin, who is
Associate Commissioner for Employment and Unemployment, and
John Greenlees, who is Associate Commissioner for Prices.
Turning to our data that we released this morning, nonfarm
payroll employment was little changed in October, and the
jobless rate was 5.0 percent. Payroll employment was flat in
September, minus 8,000. That was a revised figure.
Before discussing the payroll survey data in detail, I
would note that the October estimates were prepared using the
same modified procedures that were introduced in September to
better gauge employment developments in areas affected by
Hurricane Katrina. We will continue to evaluate our data
collection and estimation procedures and will resume standard
survey operations when it is appropriate.
You will recall that in our analysis of the September
employment data, we concluded that the weakness was largely due
to the job loss in areas devastated by Hurricane Katrina. This
conclusion was based on an estimate of the change in payroll
employment excluding all of the sample units in the disaster
areas. That exercise showed that job growth outside the
disaster area was in line with the average monthly increase for
the Nation as a whole during the prior year.
We did a similar exercise for October and concluded that
the relatively weak increase was not attributable to the areas
directly affected by Katrina. Rather, job growth in the
remainder of the country appeared to be below trend in October.
In addition, the direct impact of Hurricane Rita on the
national employment data for October was judged to be minimal.
It is possible, of course, that the employment growth for the
Nation could have been held down by indirect affects of
Hurricane Katrina and Rita, for example, because of their
impacts on gas prices. I will note that Hurricane Wilma made
landfall after the October survey reference period, so we may
not see effects of that until next month.
Turning to the national developments by industry, leisure
and hospitality employment edged down in October. This follows
a substantial decline in September, at least some of it which
was hurricane-related. Employment in retail trade was basically
unchanged in October after a large decline in September. In
addition, there was little job growth in professional and
business services in October. The number of jobs in its
temporary help component showed little movement over the month
as well.
A few major industries posted notable gains in October.
Employment in the construction industry rose by 33,000 over the
month compared with average growth of about 21,000 per month
during the first 9 months of the year. Some of the October gain
reflects post-hurricane rebuilding and clean-up efforts.
Employment and financial activities continue to increase,
rising by 22,000. About half of this gain occurred in credit
intermediation. Employment, health care, and social assistance
also continued to expand in October.
Elsewhere in the economy, employment in the information
industry fell over the month, mostly because of a large decline
in motion picture and sound recording.
Factory employment edged up in October because of the
return of aerospace workers from a strike. The manufacturing
workweek rose by an unusually large amount, four tenths of an
hour. Increases in the factory workweek occurred throughout
most of the component industries. Average hourly earnings of
private production for nonsupervisory workers on private
nonfarm payrolls rose by $0.08 in October to $16.27 following a
2-cent increase in September. Over the year, average hourly
earnings were up by 2.9 percent.
Looking at some of the household survey indicators, the
jobless rate was 5.0 percent in October. The unemployment rate
basically has held steady since May of this year. Both the
labor force participation rate and employment-population ratio
were little changed in October.
I would also like to discuss some preliminary findings on
the employment status of persons directly affected by Hurricane
Katrina. Shortly after the hurricane struck, Bureau analysts
together with our colleagues at the Census Bureau devised a
short series of hurricane-related questions for inclusion in
the October Current Population Survey. These questions were
designed to identify and solicit information from survey
respondents who were evacuated from their homes even
temporarily because of Hurricane Katrina.
It is important to note that the estimates based on these
questions are not representative of all evacuees, but only
those who were interviewed through normal household survey
procedures. Some evacuees reside outside the scope of the
survey, such as those currently living in hotels or shelters.
Based on information collected by CPS-sampled households,
there were 791,000 persons aged 16 and over who had evacuated
from where they were living in August due to Hurricane Katrina.
About 300,000 of these persons had returned to the home from
which they evacuated, and the remaining 500,000 had not
returned to their August residences.
Of the 800,000 evacuees, 55.7 percent were in the labor
force in October, and their unemployment rate was 24.5 percent.
The jobless rate among those who have not been able to return
home was substantially higher than the rate for those who
returned to their August place of residence. Again, these
figures do not reflect the situation of persons still residing
in shelters, hotels or other places out of the scope of the
household survey.
Even with these limitations we believe that these data
provide useful information about the employment status of those
persons affected by Hurricane Katrina. As people make the
transition to more permanent housing, the estimates may be more
representative of the situation of all evacuees. We plan to
keep these special Katrina-related questions in the survey at
least through January 2006.
Summarizing labor market developments for October, nonfarm
payroll employment was little changed over the month, and the
unemployment rate was 5.0 percent.
My colleagues and I will now be glad to address your
questions.
Representative Saxton. Thank you, Commissioner, for your
very concise and informative statement.
[The prepared statement of Ms. Utgoff appears in the
Submissions for the Record on page 17.]
Representative Saxton. Commissioner, in your statement you
have a lot to say about the weather events that occurred,
namely Hurricane Katrina and Rita, which were back-to-back
storms at the end of August and the beginning of September.
In looking at the employment numbers from the month of
September and now, of course, the month of October, we see a
much different trend than we had been seeing for the months in
the first half of the year. In January, we had job growth of
about 124,000 jobs; in February, 300,000 jobs; in March,
122,000; in April, 292,000; and that trend continued June, July
and August. The numbers were 175,000, 277,000 new jobs, and in
August, 211,000 new jobs.
When we get to September and see the effects of, for some
reason--and I assume that you have talked about weather events
significantly because you think that had something to do with
it--all of a sudden the September numbers were down to a
negative 35,000, which have just been revised back up to a
negative 8,000, and this month's numbers were also on the weak
side.
Can you venture some opinion, venture some reasoning that
would support the notion that the hurricanes have had a lot to
do with this?
Commissioner Utgoff. We have come to the conclusion that in
October, Hurricane Katrina, which is the hurricane that has
most affected employment, did not cause additional losses, that
the weak employment situation is throughout the country. I
think it is fair to speculate that things such as higher gas
prices have influenced people's behavior in a way that has
dampened the employment situation.
The employment in discount stores and supercenters was
weak, as was employment in leisure and hospitality. These are
the kinds of places where people are not spending their money
because they may be spending their money on higher gas prices.
Representative Saxton. Not spending because they are
spending it on higher gas prices, that decision that an
individual or a family has to make about where they are going
to spend their dollars.
Commissioner Utgoff. Yes.
Representative Saxton. In addition to that, wouldn't it
discourage people to see $3 on the pump? So that affects
people's behavior, and that negative behavior may be an
indirect result of the hurricane that we see the resulting
weakening of the numbers, which occurred simultaneous with the
occurrence of these weather events.
Commissioner Utgoff. Yes, yes. There are many strong
economic numbers that have come out this month, but the
employment numbers reflect an economy that is not growing as
rapidly as it has been before.
Representative Saxton. Are there any other indicators in
the data that you have seen that would say that there are other
factors at play here?
Commissioner Utgoff. I would like to point out that
manufacturing showed a small gain because of return from a
strike, but there was also a 0.4 percent gain in hours in the
manufacturing industry spread throughout the entire industry,
which is often a sign that employers are on the cusp of
bringing back additional people. First they add hours, and then
they add additional people. So that may be one positive sign,
for this month for employment to be stronger next month. We
also have the lingering effect of Hurricane Rita and Wilma,
which really did not show up this month in the data because of
the timing of the survey and may show up in later months.
Representative Saxton. So the results of Rita are not in
this survey?
Commissioner Utgoff. They are, but we had good response
rates from employers who were affected by the hurricane. Next
month there may be rebuilding, there may be other activities
that go on that will affect the employment situation.
Representative Saxton. Can you shed any light for us on the
difficulties that may have resulted from the devastating storms
that occurred in having an effect on your ability to collect
and analyze this work-related data?
Commissioner Utgoff. The last 2 months have shown a real
effort by dedicated public servants to get out the best numbers
possible so that we could judge what was happening in the
economy. The Census Bureau made every opportunity to get to
every household that they could. There were two parishes that
they were not able to get into because they were completely
evacuated. They got back into those parishes this month. There
was a higher response rate. That is for the household survey.
In the payroll survey, Herculean efforts were made to get
responses from people that when normally they would do things
like many people who do touchtone entry, where they pick up the
phone and they just push--call a number and push a few buttons,
and that is their response, we called all those people
individually. People worked long hours to contact virtually
every person they could in the hurricane-affected areas.
Jack Galvin, Associate Commissioner for Employment.
Mr. Galvin. That covers it pretty well. We also had cases
of establishment survey respondents seeking out different
numbers to reach us and report their information via touchtone
data entry. Our 1-800 numbers were down for a while, but these
employers thought it important to report their numbers.
Representative Saxton. I see. The lack of communication
that resulted in the couple of weeks immediately after Katrina
seemed to have been a very significant impediment to me in
regard to your ability to collect data. I had a friend who
still lives in New Orleans, who ended up in Baton Rouge, and I
tried to call him for 2 weeks with no luck, and he was in Baton
Rouge. It must have posed some real challenges.
Commissioner Utgoff. We didn't change the definitions of
employment for the payroll survey, but as we discussed last
month, we did change the statistical analysis of those numbers.
For your friend who may have owned a business, if he didn't
report, in normal months we would have assumed that in first
closing if you didn't report, in the first period you didn't
report, that you looked like other people in your class, size,
industry, area, and we didn't assume that this time. We assumed
that people who reported zero employment did have zero
employment. We went through all of our procedures for
estimating employment and changed many of them.
Representative Saxton. Yesterday Chairman Greenspan was
here to testify before the Joint Economic Committee, and he was
pleased to reflect on the 3.8 percent growth that we saw in the
last quarter; he was pleased to project that growth will
continue in the next year or so at a rate, GDP rate, above 3
percent. He was pleased to talk about low long-term interest
rates. He was pleased to see that in spite of Katrina and Rita
and Wilma, and in spite of uncertainties created by the Gulf
War, by the war on terror, and in spite of the interest rate
increases that the Fed has deemed necessary, that he expects
the economy to continue to grow.
Do you see anything in the numbers that would speak
contrary to that view?
Commissioner Utgoff. The numbers that we are putting out,
many of them are very strong. The only cause for concern is
this month's employment situation is relatively weak compared
to the very strong employment growth that we have been seeing
earlier.
Representative Saxton. In that regard previous
Commissioners always have warned us about reading too much into
the monthly data release. Would you say that this month's data
is statistically significant, or is it something that we need
to wait and see as we move forward?
Commissioner Utgoff. I will say the same thing as every
other Commissioner: One month data is not something that you
want to make a significant judgment on.
Representative Saxton. We have got the weather events that
could have a temporary affect here, and we know from past
experience that the statistical significance of 1 month's
numbers are not always particularly meaningful.
Commissioner Utgoff. Yes.
Representative Saxton. Thank you, Commissioner.
Mr. Reed; I'm sorry, Senator Reed. My friend.
Senator Reed. Jack.
Thank you, Commissioner, and thank you, Mr. Chairman.
We were seeing what appeared to be sustained job growth
over the last several months, but I understand the August
number was revised down from the initial report; is that
correct?
Commissioner Utgoff. Yes, that is correct.
Senator Reed. The initial report for August jobs was?
Do we recall a revised number?
Commissioner Utgoff. Just a moment.
Mr. Galvin. When we reported August back in September, we
reported it at 169-, then in our second closing last month we
revised it up to 211-, and now we are reporting 148-.
Senator Reed. We went from 211- to 148-, and that was
before Katrina and Rita and Wilma; is that correct, before the
hurricanes?
Commissioner Utgoff. Yes, the August number would not have
been affected by the hurricanes.
Senator Reed. So what we were seeing was growth, and
something suddenly might have happened in August to cause a
revision downward. Then we have this month's report, which I
thought was interesting, because in response to the Chairman's
question, you point out you did not really see the primary
affects of the hurricane because the weakness was nationwide;
is that a fair statement?
Commissioner Utgoff. Yes.
Senator Reed. And so, we saw revised numbers downward in
August, we had a hurricane, and now we are seeing very, I think
being polite, modest growth in jobs in this month, which is
nationwide and not targeted to the hurricane effects.
The other aspect here I think is interesting is labor force
participation. That seems to be consistently poor. In fact, I
think there was a slight increase--I should say a slight
decrease in labor force participation in October?
Commissioner Utgoff. Down one tenth of a percent.
Senator Reed. Down a tenth. Not statistically significant,
but indicating there is a huge reservoir of people who are not
counted in the unemployment rolls because they are not actively
seeking work, and that seems to be stable at high levels. I
guess historically in terms of a recovery from a recession,
these levels of workforce participation seem to be high; is
that accurate, too?
Commissioner Utgoff. The decrease in labor force
participation that occurred with the recession that started in
2000 was significant and has not returned to prerecession
levels.
Senator Reed. I think that is a significant issue when it
comes to the truth of the situation of American families across
the country.
We have been talking about payroll growth and job growth,
et cetera, but unemployment claims for this month seem to be
growing also; is that fair?
Commissioner Utgoff. I believe that the initial claims
were----
Mr. Galvin. Overall initial claims declined, 12,000.
Senator Reed. How about in terms of, again, talking in
terms of the hurricanes; are those claims still coming out of
the hurricane areas?
Commissioner Utgoff. Yes.
Mr. Galvin. ETA has reported that the number has gone above
500,000 of initial claims related to the hurricanes.
Senator Reed. What is your expectation with respect to
additional claims coming out of those regions? Let me step back
for a second. Is there a delay because people have difficulty
because they have been uprooted in filing their claims?
Commissioner Utgoff. There has been a concerted effort to
have additional places to file unemployment insurance in all
the areas that have been affected and to make sure that the
places where evacuees have gone in large numbers have the
ability to file for both employment insurance and disaster
unemployment assistance.
Senator Reed. Do you expect a significant number of people
have not yet filed?
Commissioner Utgoff. I can't opine on that.
Senator Reed. Let me turn to a final topic. One of the
things that is both interesting and in a sense disturbing is we
have an increase in productivity which is substantial, yet
wages seem to be not reflecting those increases in
productivity. Productivity went up, wages seem still to be
rather anemic, and in real terms, wages are falling. If that is
a trend that is going to continue, that has ominous
implications for the economy. People are working harder and
harder, and the overall economy is more productive, and yet
they are not receiving any increase in wages.
How does that work for most of the people that work in this
country? Do you have a comment on that dilemma?
Commissioner Utgoff. Over the long run we normally see that
productivity and wages move in the same direction; not always,
but normally. That has not happened in the last few years.
Productivity has increased faster than wages and compensation.
Senator Reed. That might be the long run, but that is--2
years of data is a significant amount of data, which suggests
that this is a huge problem, because I think the premise that
we all have in our market economy is that increased
productivity will be shared in some sense with increased wages.
If there is a disconnect between productivity increases and
wage increases, that is, again, an ominous development in the
country and I think something we have to be terribly concerned
about. Thank you.
Representative Saxton. Mr. McCotter.
Representative McCotter. Thank you for being here.
Along similar lines, I am just curious if we have ever had
a study, because I come from Michigan. Just so you know, we
hear a lot in Michigan about the outsourcing of jobs, jobs
lost. One question I can't seem to get answered because I don't
know if anybody keeps track of it, and if you don't, nobody
does, is what jobs are lost overseas as opposed to what jobs
are lost to other States. Is there anywhere I could go find
that?
Commissioner Utgoff. We have a survey that addresses part
of that for large layoffs where there have been 50 or more
people laid off in a 5-week period and the layoff lasts more
than a month. We call back the company and ask where the
movement of jobs has been, and it is far more common for job
loss to be the result of movement of a company's activities to
another State or another area than it is for it to be moving
out of the country. So that outsourcing--there is outsourcing,
but it represents a relatively small fraction of job loss due
to the movement of work either within the company or to a
different company and within the United States and outside the
United States.
Representative McCotter. Where can I get that?
Commissioner Utgoff. We will be happy to send you more
material. We have both quarterly reports and a year-end report
that talks about that.
Representative McCotter. Can I get the latest year-end
report and the latest quarterly?
Commissioner Utgoff. Yes.
Representative McCotter. Along the lines of what the
Senator talked about, the increase in productivity and the
stagnation of wages to match that rise, is there any analysis
of how the flood tide of globalization is causing that? It
seems to me that one of the problems would be that if you have
to compete globally with any nation, not simply developed
democracies, what happens is you will try to do everything you
can to be more productive, and one of the things that you can't
because it increases prices of your products would be to reward
your employees for their increased productivity. Is there
anywhere to find a correlation between those two? Because it is
an ominous trend to find people working harder because they are
forced to compete globally with any country which may or may
not have similar protections for their people and find out at
the end of the day that is merely to tread water and to survive
economically, not to grow and prosper and pursue your American
dream. Is there anywhere that can be found?
Commissioner Utgoff. We have data on the increase in wages
and compensation benefits for the people over the 2-year period
that you are talking about, and for people who do not have
significant education, wages have been stagnant or falling. It
is a stark example of why we really need to have a good
educational and training system to prevent wage stagnation in a
world of global competition.
Representative McCotter. Relative to Michigan specifically
from what you were just saying, then, is that it is probably
statistically borne out that the people who are hurt the most
will be in such areas as manufacturing, it would seem to me,
because the history has been that you do not need an advanced
degree although the work is very technical to go into a very
well-paying job, to be able to produce, and then what we are
seeing now is that that no longer is a career path, the
statistics bearing out the people who get the degrees generally
don't go work at Ford on the assembly line, or they don't work
in the manufacturing area. Are we seeing then from the
statistics a special problem within the manufacturing sector
because of this trend?
Commissioner Utgoff. The manufacturing executives have told
the Department of Labor that they have help wanted signs up not
for assembly-line workers, but for workers who have more
training and more education; that manufacturing has become much
more of a high-tech industry where productivity has reduced the
need for workers with limited education.
Representative McCotter. If you would indulge me one last
question. Are they also telling you that they are able to take
the people who are engaged in the manufacturing sector
currently and then bring them into those jobs?
Commissioner Utgoff. They are all very interested in
training programs either on their own or with the help of the
Department of Labor and the Department of Education to make
sure that people graduate from high school with the skills that
they need to enter the high-tech manufacturing workforce,
because that is where manufacturing is headed, and to retrain
their workers to take new jobs.
Representative McCotter. The high tech.
Commissioner Utgoff. In higher tech.
Representative Saxton. Good questions. Thank you.
Mrs. Maloney.
Representative Maloney. Welcome.
Commissioner Utgoff. Thank you.
Representative Maloney. What fraction of the population
actually has a job?
Commissioner Utgoff. Let me get to the numbers.
Representative Maloney. If you want you can get back to me
later.
Commissioner Utgoff. No, no, no. We have all these numbers.
The employment to population ratio in October 2005 was 62.9
percent.
Representative Maloney. What would the unemployment rate be
if you included people who want to work but have given up? They
are not officially in the labor force, they have been turned
down 10 times, and are not actively looking? What would the
unemployment rate be if you included those people?
Commissioner Utgoff. In October 2005, our broadest measure
of labor utilization, U6, was 8.7 percent.
Representative Maloney. What would the unemployment rate be
if you included people working part time for economic reasons?
Commissioner Utgoff. U6 includes those working part time
for economic reasons.
Representative Maloney. This also includes people who would
like to work but have given up?
Commissioner Utgoff. It includes discouraged workers.
Representative Maloney. I would argue the real unemployment
rate is 8.7 percent.
Anyway, I would like to ask you to clarify for me--first of
all, I want to go back to the numbers that you gave us. You
said that there was a net gain of 56,000 jobs in October and a
loss of 8,000 jobs in the revised September reading. How many
of those net gain jobs at 56,000 are filled by women, and how
many are filled by men? Likewise, I think it is important to
see who it is that is losing a job. How many of the net loss of
8,000 jobs in the revised reading had been filled by women, and
how many had been filled by men?
Commissioner Utgoff. The number that you refer to, 56,000,
is net. They are both people who have gotten jobs and people
who have lost jobs.
Representative Maloney. How many of them were women, and
how many were men?
Commissioner Utgoff. We don't have that statistic.
Representative Maloney. Did you at one time keep that
statistic?
Commissioner Utgoff. Yes, we did.
Representative Maloney. I find that an important statistic
to have. In fact, Senator Kennedy with the help of Senator
Reed, proposed an amendment to put it back into the payroll
data, and I would just like to clarify why the Bureau has
discontinued the women workers series on the current employment
statistic survey. Why did you discontinue it? It is half the
population. That is an important number to study.
Commissioner Utgoff. The statistic that you are talking
about would not be available to me to report to you for October
because----
Representative Maloney. That wasn't my question. My
question is why did you stop--why did you discontinue keeping
that statistic.
Commissioner Utgoff. The decision was made based on the
fact that the burden on employers for collecting that statistic
was not worth the amount of use that statistic was getting. We
know that because we can measure the hits on the Web site. We
know that in the last 10 years that 6 articles have been
written that partially use that data, and we have calculated
that if it takes employers a minute apiece to answer that
question, and you use a relatively low bookkeeper salary, that
the cost of those 6 articles is almost $3.5 million apiece.
Representative Maloney. I would like to request a copy of
those six articles. According to the research that we looked
at, that question has an 86 percent response rate. It is the
second highest responded-to question of any on the survey; the
only one being higher is how many employees do you have. The
only business organizations that responded supported collecting
the data. There was no business that went on record being
opposed to collecting the data. They all came out in supporting
it. Researchers use this data. The Federal Reserve Bank of New
York has used it, and many others use it.
So, I cannot understand why in the world you have removed
it. There is no substitute. Businesses don't seem to have a
problem with it since they all responded to the comment period
at OMB, in the original comment period, in support of it.
Researchers use it, and there seems to be overwhelming support
for it. The comments submitted to BLS ran 9 to 1 in favor of
it, and I believe the Senate just voted overwhelmingly, in a
bipartisan way I might add, to continue collecting it. I must
say I have signed numerous letters in a bipartisan way in
support of it, and I have spoken to professional researchers
who tell me that they use it, that it is valuable. I can't
understand why getting the number of women employed is not
important.
Now in your breakdown of these numbers by industry, how
many industries do you break it down by?
Mr. Galvin. Over 1,000 industries.
Representative Maloney. Eight hundred industries.
Mr. Galvin. That is the national numbers. The women's
workers numbers were broken down to a high level of industry
detail of about 40 high-level sectors.
Representative Maloney. Forty high-level sectors. I would
like to look at how you collected it in the past. I might say
that I went to your Web site in the past, and I have never seen
it mentioned, it is never in your press releases. If people
don't know about it, then they won't be using it.
I would just like to ask you; it was my understanding that
the New York Federal Reserve testified to the usefulness of
this data; is that correct, about the New York Federal Reserve
Bank?
Commissioner Utgoff. There was a written response from the
Federal Reserve bank that they had used the data.
Representative Maloney. If they are using it, I think we
need to give them the data they need.
Does collecting this data impose a large burden on BLS, or
is there some compelling reason why we should not continue to
collect this data since the response was 9 to 1 in support of
continuing it? Every business that wrote in wrote in in support
of it.
Commissioner Utgoff. First, let me make an important point.
The data on industry by women is available in the Current
Population Survey. We are making that more useful to our users
by producing a longer-time series. It is just the nature of
when you ask an employer do you want to put this data down,
when they spend 12 minutes a month--excuse me, 12 minutes a
year responding to it, they are not going to write a letter.
It is our job as a statistical agency to make the judgment
that 12 minutes a month for 400,000 employers is a very large
burden compared with 6 articles in 10 years.
Representative Maloney. Commissioner, if no one writes in
in opposition, why are you even having a comment period if you
are going to make a decision not based on the comments? Nine to
one the comments were in support of continuing the data, and
researchers have told me, that the other data that you are
using is not the same. They have told me that the CPS data
comes from a different source, individuals rather than
employers, and has a smaller sample size. BLS states that--you
have stated that it is less reliable for month-to-month
employment changes. The Federal Reserve uses this data. I would
respectfully urge you to continue collecting it.
Now, if Congress passes a bill forcing you to collect it,
would you collect it?
Commissioner Utgoff. Yes.
Representative Maloney. I would urge in a bipartisan way
that we put in such a bill. I know that Senator Kennedy and
like-minded people will be working in the conference committee
to keep the legislation in, and, quite frankly, I am absolutely
appalled that of all the things to cut out, it is keeping data
on employed women. I think that women's data should be kept,
and I urge you on your own to make this correction.
Commissioner Utgoff. We produce voluminous data on women;
earnings, use of their time, and when they are displaced from
the workforce. We cover every aspect of women in the labor
force.
Representative Maloney. Maybe I should wait until the
second round.
Representative Saxton. Actually, Senator Reed and I have
tentatively agreed not to have a second round.
Representative Maloney. May I have a follow-up question.
Representative Saxton. The gentlelady has made her point,
and you are rapidly approaching the 10-minute--your red light
has been on for 5 minutes. If you would ask another question
and conclude, I would appreciate it.
Senator Reed. I have one more question.
Representative Maloney. What is the Bureau doing to study
the wage gap specifically, and what are you doing to determine
how much of the wage gap is attributed to discrimination by
employer, and are you designing any surveys on this issue, or
do you have any surveys on this issue?
Commissioner Utgoff. We just produced a lengthy report, I
will send everybody on the Committee a copy, on highlights of
women's earnings. We publish earnings by age, race, all kinds
of groups, to compare them to men so that we know in what
industries women are making progress relative to men, in what
educational groups women are making progress relative to men,
occupations. This is a 40-page report that was just recently
produced and will continue to be produced.
The data that you say are being dropped were never used by
the BLS to evaluate women's earnings and the progress of their
earnings and are not suitable for doing that.
We will continue to be a major source of information on
women in the workforce and how women in the workforce are doing
relative to men by numerous categories.
Representative Maloney. I thank you for your testimony, and
you may not be using the information, but other researchers,
including the Federal Reserve, are using the information on the
number of women employed, or losing jobs, and that is valuable
information and I would respectfully urge BLS to place that
back in their column of items.
Representative Saxton. Commissioner, I would like to thank
you for being here with us this morning. We appreciate it very
much. We always enjoy these sessions, but we enjoy them even
more when you bring us good news. Hopefully next month we will
have some good news.
Commissioner Utgoff. We have had a spate of hurricanes, and
hopefully that will die down. And no snow storms next month.
Representative Saxton. Thank you.
[Whereupon, at 10:22 a.m., the Committee was adjourned.]
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