One trend is now clear – that unemployment is the most important driver for foreclosure. So what do the unemployment numbers mean? As this report by KERA tells us – they are not truly representative of what is going on and they can seriously understate what is going on:

Many people assume that the government only uses the number of persons filing for Unemployment Insurance benefits (UI) through state or federal government programs as their source.

Because many people aren’t eligible for UI or  have already exhausted their benefits, that wouldn’t  give us a real picture of the number of unemployed people.

Other people believe that the government actually counts the number of all unemployed people each month –an undertaking that would require the level of work done by the U.S. Census every ten years.

The Bureau of Labor Statistics uses a monthly survey called the Current Population Survey to measure unemployment across the country. It has been conducted in the U.S. every month since 1940, and is one of the oldest continuous monthly sample surveys of households in the world.

There are about 60,000 households in the sample, which is designed  to be representative of the U.S. population.  and each month, a quarter of the households in the sample are changed so that none  are interviewed more than four consecutive months. Surveyed individuals are interviewed and the data is compiled electronically so it can be adjusted to independent population estimates.

The survey relies on three basic concepts of employment and unemployment:

• Individuals with jobs are counted as employed.
• Individuals who are jobless, looking for a job, and available for work are unemployed.
• Individuals who are neither employed nor unemployed are not counted in the labor force. People who are under 16 or in the Armed Forces are also not counted.

These definitions aren’t as simple as they may sound. People are considered employed if they did any work for pay during the survey week. An 18-year-old student who baby-sits for 6 hours a week would be counted as employed, just as her mother who might work 40 hours per week.

People are classified as unemployed if they don’t have a job, are actively looking for work, and are currently available for work. If they are in training or educational activities, they are not counted as either employed or unemployed.

People who aren’t working but are physically unable to job aren’t counted in either category. Other examples of people not considered in the labor force would be persons confined to institutions such as prisons, jails, or hospitals.

As you might expect, there is much work that is done outside these simple definitions. The BLS keeps data on persons who would be counted as “marginally attached to the labor force” but not counted as either employed or unemployed.

“Discouraged workers” are a subset of this group. Many of these individuals are the people our community partners see every day. They don’t believe there is a job available for them and that they lack the skills necessary to find employment. The BLS keeps numbers on these individuals as well, but doesn’t count them in the official numbers.