PDF _ RL33164 - Understanding Government Employment Data After a Natural or Other Disaster, With Special Emphasis on Hurricane Katrina
14-Dec-2005; Gerald Mayer; 20 p.

Abstract: The federal government uses surveys of households and employers to estimate monthly employment and unemployment. A natural or other disaster may disrupt the collection of labor force data. In addition, survey estimates of employment and unemployment may not fully capture the job loss resulting from a disaster.

At the beginning of each month, the U.S. Bureau of Labor Statistics (BLS) releases employment and unemployment data for the previous month. The monthly national unemployment rate is based on the Current Population Survey (CPS), which is commonly called the household survey. Each month, the BLS also releases estimates of the number of wage and salary jobs for the previous month. These estimates come from the Current Employment Statistics (CES) survey, commonly called the payroll or establishment survey. The Local Area Unemployment Statistics (LAUS) program uses data from the household survey, establishment survey, Unemployment Compensation (UC) program, and other sources to produce monthly estimates of employment and unemployment for approximately 7,200 geographic areas in the United States. These data are used to administer and allocate funds under numerous federal programs.

A natural or other disaster may result in a loss of jobs due to damage to buildings and infrastructure (e.g., roads, bridges, or utilities). The job loss may extend to governments that lose tax revenue and businesses that lose customers. Because of the labor force definitions used in the household and establishment surveys, estimates of employment and unemployment may not fully capture the job loss from a disaster. Some persons who lose their jobs may be counted as employed. Other persons may be classified as having left the labor force (i.e., neither employed nor unemployed). In addition, it may be difficult to separate the employment effects of a disaster from the effects of other factors (e.g., changes in interest rates, business investment, consumer spending, and government spending). Finally, because the monthly estimates of employment and unemployment are based on samples of households and employers, any reported month-to-month changes in employment may not be statistically significant.

A natural or other disaster may result in a short-term loss of jobs. Rebuilding generally creates jobs and restores lost jobs. Rebuilding may, however, result in a temporary mismatch of skills. Therefore, some persons who lose their jobs may not return to work soon. For example, the skills needed to rebuild a bridge, levee, office building, or house may be different from the skills needed to operate a store, casino, restaurant, or other business. In the longer-term, rebuilding may raise employment above levels that existed before the disaster. The employment effects may be widespread. Some people may move away from a disaster area, affecting employment and unemployment elsewhere. On the other hand, rebuilding may attract workers to the disaster area and increase the demand for goods produced elsewhere (e.g., building materials, office equipment, and household goods). This report will be updated as issues warrant. [read report]

Topics: Government, Population

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