One of the biggest misunderstandings among my readers is about who is counted in the Department of Labor’s unemployment rate, currently 9 percent in Connecticut and 8.1 percent nationally.
The estimate is determined by a national telephone survey. Federal employees call more than 60,000 households every single month, and ask the person who answers the phone : Do you have a job? If the answer is no, the census taker asks: Do you want a job? Have you applied for any jobs in the last four weeks?
If the answer to questions two and three is yes, then you are unemployed. Simple as that. It has nothing to do with whether you are collecting unemployment checks, or even ever collected unemployment checks. (For instance, women who have been stay-at-home mothers for years, who are now applying to jobs, count as unemployed.)
In August, about 83,700 people were collecting unemployment benefits from the state of Connecticut. About 6,750 worked for Connecticut employers but live in other states, just as some Connecticut residents collect checks based on work they once did for New York and Massachusetts employers.
By comparison, the telephone survey said there were 171,000 unemployed people in Connecticut in August.
So when people time out of unemployment benefits without finding jobs, they are still counted as unemployed. The only reason they would not be counted in the unemployment rate is if they give up looking. The unemployment rate is not designed to capture every person who would like to have a job if it was easy to get one — though there is an estimate of those people, too, called ‘discouraged workers’. It just answers the question of who’s looking and unable to find work.
Nationally, the unemployment survey has done a good job of measuring job trends for decades. In Connecticut, the number isn’t as good, because our sample size is smaller, but it’s the most accurate estimate available.