KISS the No. 2 pencils goodbye.
Starting this month, the government will enter the lap-top computer age when it takes its survey for the January unemployment rate.
As a result of the switch to computers and new questions that are more precisely targeted, the Bureau of Labor Statistics (BLS) expects the unemployment rate to rise. In a smaller parallel survey using the new questions and techniques, the unemployment rate rose 0.5 percent.
December's unemployment numbers being released today use the old methods.
How will the shift to computers affect the unemployment rate? The computers will help the Census Bureau, which does the interviewing, to ask the correct questions. As the interviewers input the information, the correct next question will automatically appear on the lap-top computer. In addition, the computer will keep track of prior answers from each of the 60,000 households queried. This will allow the BLS, part of the Department of Labor, to keep better track of the characteristics of the households such as occupation and duration of unemployment.
The old questions started off by asking ``What were you doing last week? Working or something else?''
The BLS felt it was getting biased information, especially from women who were asked ``Were you keeping house or something else?'' Instead, the new first question will be ``Does anyone in this household have a business or farm?'' Then, the interviewer will ask, ``Last week did you do any work for pay or profit?''
The change will account for people who work on family farms or businesses for at least 15 hours but do not get paid. The old questionnaire counted on individuals volunteering that information. The second question will allow women who work part time to answer the question in the positive. The BLS was concerned that women would not think their part-time work was important.
Filling in the cracks
The new questions will allow the BLS to better determine how many people are moonlighters. With sharper questions, the BLS expects to get more definitive data.
The BLS will also change the questions relating to discouraged workers. In the past, the BLS asked, ``Do you want a job?'' If the individual answered ``Yes,'' but said the job market was tight, the interviewee was called a discouraged worker. The new question will ask if the individual has searched for a job over the last 12 months. The government expects this will reduce the number of ``discouraged workers'' by at least half.
Otherwise, there are not really any other major changes. The BLS will continue to conduct two separate surveys each month. The first survey of unemployment is of 60,000 households which on average contain at least two individuals 16 years or older. The survey is always conducted the week of the 19th, regarding employment on the week of the 12th of the month.
Households are rotated: they are in the sample for four months in a row, then left out for eight months and then questioned for another four months. After the last period, the household is permanently off the list. The main goal of the questions is to determine working status. If the individual is unemployed, then the survey seeks to find out the duration. The BLS separates answers by age, sex, race, and Hispanic origin.
The second survey is about employment. State departments of labor question 370,000 businesses to determine the number of people on payroll, hours worked, and earnings. The answers are broken down by detailed industry classifications. People who are in job training programs are considered by the BLS to be ``out of the work force,'' the same as a student.
Data spur federal handouts
The reports are used by Congress in allocating funds for unemployment insurance. A high unemployment rate in a state might trigger extended benefits. Economists watch the report closely to determine economic trends. It is often considered a key measure of whether the economy is expanding or contracting.
The unemployment rate has hit some record highs and lows: During the Great Depression of the 1930s, the unemployment rate was about 25 percent; in the early 1950s, the unemployment rate was in the 2.5 percent range, which, oddly enough, might have been below full employment. When economists say ``full employment,'' they are refering to the unemployment rate below which inflation worsens. Economists now consider the full employment rate at 5.5 to 6 percent unemployment. Once the jobless rate reaches this level, the Federal Reserve often begins to hike interest rates.