Employment and unemployment in 1984: a second year of strong growth in jobs Essay

The employment situation in 1984 reflected extraordinary rates of
employment growth in the first 2 quarters, a pause in the summer months,
and additional employment growth in the last quarter of the year. Total
civilian employment, as measured by the Current Population Survey, stood
at 106.0 million in the fourth quarter after seasonal adjustment.
Employees on nonagricultural payrolls,as measured by the Current
Employment Statistics program, totaled 95.5 milion of yearend. Both
series were up by about 7 million from the trought of the 1981-82
recession.



With the robust employment growth early in the year, unemployment
continued to drop sharply, but, as the job growth slowed, the
unemployment decline slowed after midyear. At 8.2 million in the fourth
quarter, unemployment was down about 1.3 million from the year before
and more than 3.5 million from the recession trough. At year’s
end, the rate of unemployment in the total labor force was 7.1 percent;
it was 7.2 percent for the civilian labor force. These indicators were
down 1.3 percentage points from the fourth quarter of 1983.

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This article examines the behavior of the key labor force time
series, both for 1984 and in relation to the business cycle, and details
the effects on various social and economic groups. Special emphasis is
placed on such groups as minority workers, as well as on families and
their relationship to the labor market, and selected industries that
have had prominent roles in the changing employment structure of the
economy.


Unemployment



As employment growth paused in mid-1984, so faded the rapid
reduction in unemployment that had occurred in the first 6 quarters of
recovery. The rate of unemployment for civilian workers dropped more
than a full percentage point from the fourth quarter of 1983 to the
second quarter of 1984 and then showed more modest improvement, ending
the year at 7.2 percent.



Among the major labor force groups by age and sex, men and
teenagers showed declines in unemployment in all 4 quarters of 1984.
After large decreases in the first and second quarters, the unemployment
rate for men edged down slightly in the last two to end the year at 6.2
percent. The rate for women, however, actually edged up a bit in the
third quarter, after dropping as low as 6.7 percent in the spring;
unemployment among women stood at 6.6 percent at the end of the year.
Teenage unemployment showed small declines throughout most of 1984 but
remained at a persistently high level, ending the year at 18.4 percent.



The continuing decline in unemployment among adult males in the
second half reflected improvements among black men, as their rate
dropped from 14.8 to 13.1 percent between the second and fourth
quarters. Over the same period, white male unemployment edged down to
end the year at 5.4 percent. The overall unemployment rate for whites
dropped slightly in the second half, to 6.2 percent, following a much
stronger improvement in the first half. Among blacks, unemployment
dropped from 17.8 to 16.0 percent between the end of 1983 and midyear;
at the end of 1984 the black unemployment rate was 15.1 percent. Black
teenagers continued to have a very high rate of unemployment. Even
after a 6.6-percentage-point drop from fourth quarter 1983 to the end of
1984, unemployment affected about two-fifths of black teens in the labor
force. The unemployment rate for workers of Hispanic origin showed a
decline of 1.8 percentage points over the year to 10.3 percent, with
most of the improvement taking place in the first quarter.



Duration and reasons. The median duration of unemployment fell
from 9.3 weeks at the end of 1983 to 7.3 weeks at the end of 1984.
Similarly, the average (mean) duration of unemployment fell 2.9 weeks to
end the year at 17.1 weeks. These declines reflected a sharp reduction
in the number of the unemployed who had been out of work for a long
time. The number of person jobless for 6 months or longer declined by
three-quarters of a million over the year. Nevertheless, at yearend
there were still 1.4 million persons who had been unemployed for half a
year or more. Protracted unemployment is particularly a problem for men
55 years and older.


The number of job losers among the unemployed dropped by about a
million between the end of 1983 and the fourth quarters of 1984 as their
share of the unemployed fell from 55 to 51 percent. It should be noted,
however, that this cyclically important indicator showed virtually no
change from the third quarter to the fourth. Many observers treat a
higher proportion of those who leave jobs voluntarily as an indicator of
worker confidence int he economy; that proportion of the unemployed rose
irregularly from 8.9 percent at the end of 1983 to 10.3 at yearend.



Total Employment



The first 2 quarters of 1984 extended the unusually rapid growth of
total employment experienced in 1983. From the fourth quarter of 1983
to the second quarter of 1984, civilian employment grew by 2.4 million,
or 2.3 percent. In contrast, from the second to the fourth quarters,
employment grew by less than a million, or 0.9 percent. This declining
rate of employment growth was reflected in other quarterly economic
statistics, such as real Gross National Product (computed at a
seasonally adjusted annual rate) and the Index of Industrial Production:



Overall employment growth for the year was 3.3 percent, measured
from the fourth quarter of 1983 to the fourth quarter of 1984. Men
accounted for about 54 percent of the increase in employment, women for
more than 45 percent, with virtually no change in teenage employment.
Most of the gains for women occurred in the first half of the year,
while gains among men were more evenly spread.



The proportion of the civilian noninstitutional population with
jobs (the employment-population ratio) rose more than a full percentage
point over the year to 59.8 percent in the fourth quarter. This was
very close to the quarterly high of 60.0 percent reached in 1979.
Employment growth exceeded population growth for men and women. Among
teenagers, the decline in population coupled with fairly steady
employment levels also resulted in a higher employment-population ratio.



There has been some concern over the composition of employment
growth over the course of the current recovery. Such concerns are often
based on the fact that the service-producing industries are growing at a
faster rate than goods-producing industries. It is also useful to
analyze the occupational distribution of job growth over the past year.
While some analysts maintain that the changing industrial composition of
employment implies an unfavorable trend toward “dead-end”
service and clerical jobs, and thus away from “good”
managerial/professional and industrial craft jobs, the figures for 1984
demonstrate that the latter occupational groups were the fastest
growing, and the former occupations were among the slower. Employment
growth by occupational group:



The administrative support subsector, which includes clerical
workers, grew by only about 2 percent over the year, while, in a
development linked to recovery in the industrial sector, handlers,
equipment cleaners, helpers, and laborers saw an employment increase of
5.1 percent.



Nonfarm payroll employment



The number of nonagricultural jobs surged in the first half of
1984, sustained by the strong cyclical recovery. Growth continued at a
somewhat slower pace during the second half, as the job total reached
95.5 million by yearend, surpassing the recession trough by 6.8 million
employees. All in all, 2 years of economic recovery added about two and
one-half times the number of payroll jobs lost during the 1981-82
recession. Virtually all of that recession loss, however, occurred in
the goods-producing sector, while two-thirds of the recovery gains took
place in the service-producing sector. Indeed, goods-sector jobs were
still slightly short of their pre-recession peak at the end of 1984.
Employment growth in the goods sector essentially stalled during the
second half, as the service sector accounted for almost 85 percent of
payroll additions.



Despite a less heady pace of job growth, the recovery was still
producing solid job gains, particularly when viewed in comparison with
other post-World War II recoveries. Because the depth and duration of
the 1973-75 recession were quite similar to those of the 1981-82
recession, the recovery beginning in 1975 provides a useful benchmark
for assessing the strength of the current expansion. When employment
growth in each recovery is indexed to the respective cyclical trough, we
find that relative employment growth for the current recovery has
increasingly exceeded the post-1975 experience with each successive
month. The pattern varies markedly by sector, however. In the
goods-producing sector, the post-1982 recovery had an extended period of
faster growth than the earlier recovery, but it was marked by a pause in
the rate of growth some 20 months into the recovery. In contrast,
indices for the resilient service-producing sector tracked closely until
early 1984, when the rate of growth in this recovery quickened and
surpassed the post-1975 index. The service-producing index accelerated
again in the fourth quarter after hesitating slightly in the third.
(See chart 1.)



Service-producing sector. The service-producing sector gained 2.7
million jobs between the fourth quarters of 1983 and 1984, contributing
70 percent of the additions to total employment. This increase was led
by vigorous growth in services and retail trade. The services division
created more than a million jobs, well over one-third of the
sector’s increase. This division encompasses a diversity of
industries–from hotels, entertainment, and recreation to business,
health, educational, social, and legal services. While the services
division as a whole continued its historical trend of secular growth,
health services exhibited a lower rate of employment growth than in
previous years. An actual decline in hospital employment in 1984
explains the slower pace, as hospitals streamlined management and staff
in response to lower demand and pressure for more cost-effective health
services.



Business services, one of the more cyclically sensitive of the
service industries, led the division in both magnitude and rate of
growth, making up 40 percent of the division’s employment gain in
1984. A continuing upward trend in personnel supply
services–particularly in temporary help–explained a substantial
proportion of business services’ growth, although the pace of
growth in this industry was a bit slower than in 1983. The temporary
help industry contributed about 1 in 30 of the additional private
payroll jobs in 1984, down from 1 in 20 during earlier stages of the
economic recovery. Temporaries are used by a variety of industries, not
only to meet short-term labor shortages but also to meet labor needs
when employers are uncertain of the staying power of product demand.
The use of temporaries declines as employers reassess their needs and
add to their permanent work force.



Jobs in retail trade increased by 785,000 over the year. Eating
and drinking places and general merchandise stores contributed about
half the increase, with general merchandise showing the higher growth
rate. Employment gains were particularly strong in the first and second
quarters but tapered off in the third quarter as consumer spending flattened and retail sales lagged. By yearend, the pace picked up once
again in anticipation of strong holiday sales.



In wholesale trade, a 280,000-increase was dominated by additional
workers involved in the sale of durable goods, particularly in
commercial and industrial equipment. First-quarter employment gains
were particularly strong for cyclically sensitive durables and remained
steady throughout 1984, despite a drop in the volume of sales after the
second quarter.



Elsewhere in the service-producing sector, employment in
transportation and public utilities added 180,000 jobs in 1984, bringing
the industry total above its pre-recession peak. All of the increase
occurred in transportation, with about half of it coming from trucking.
Finance, insurance, and real estate jobs were also up 200,000. In
contrast to previous years, employment in State and local government
picked up as the economic recovery fueled greater tax revenues, but
Federal employment remained essentially unchanged.



Goods-producing sector. The goods sector–construction and
manufacturing, in particular–enjoyed a strong cyclical rebound early in
the recovery and exhibited a higher rate of growth than the
service-producing sector in the recovery’s seconf through sixth
quarters. The pace of growth moderated in the latter half of 1984,
however, after a midyear climb in mortgage interest rates and an
increasing volume of factory-made imports. By yearend, only
construction had fully recovered the number of jobs lost during the
previous recession, as manufacturing employment had recouped 75 percent
of its job loss, and mining employment was still below the level
recorded at the recession trough.



The moderation in goods-producing employment growth was reflected
in the Bureau of Labor Statistics’ diffusion index, which is
heavily weighted toward manufacturing. Between 70 and 80 percent of the
186 composite industries registered job gains (over 3-month spans)
during the first 2 quarters; the index hovered around 60 percent during
the second half.



New jobs in construction grew at a less rapid pace in the second
half, after a strong performance in the first and second quarters. The
major weak spot in the construction market was in traditional
single-family housing. Mortgage interest rates rose sharply in the
spring, resulting in slower sales in the summer and a stalling in
housing starts. These factors weakened the demand for construction
labor. Cushioning the construction slowdown in the last two quarters
was a backlog in orders for new homes left over from the pent-up demand
from recession years. Moreover, home mortgage rates had edged down by
yearend, and an expansion in multifamily housing reflected some of the
demand from new households that would have otherwise been for
single-family dwellings.



The construction industry added 340,000 workers to its payrolls
over the course of 1984. Four-fifths of the increase was in the special
trades industry, which includes plumbing, painting, electrical work,
masonry, or concrete work. The pattern of job growth in special trades
dominated the trend for construction as a whole, and most of the
employment gains for both series occurred in the first half. At
yearend, construction employment had regained 170 percent of the jobs
lost during the recession.



The rebound in manufacturing employment by the end of 1984 had been
almost entirely within durable goods, while most of the less cyclical
nondurables industries showed little or no growth. The moderation of
jobs gains in the last half appeared to be associated with the widening
merchandise trade deficit. Stimulated by the strength of the dollar
abroad, the volume of imports grew throughout 1984, with virtually all
of the increase in factory-made products. Paradoxically, the usual
efforts of domestic manufacturers to remain competitive did not
stimulate factory job growth at home as much as might have been
expected. The investment in more modern equipment to increase
productivity would normally benefit industries such as machinery,
electrical and electronic equipment, and fabricated metal products
because of increased demand for their products. In 1984, however, the
capital investment dollar was worth more when spent on equipment
produced overseas.



Foreign competition alone, however, did not explain the pause in
durable goods’ job growth. The overriding factor was the cooling
of a heated recovery. New orders for durable goods failed to post big
gains after the first quarter, and factory output flattened,
particularly in durables. The rate of growth in gross national product
faltered with industrial production. Durable goods employment increased
430,000 from fourth quarter 1983 to second quarter 1984, or 3.9 percent;
the second-to-fourth quarter increase was only 180,000 workers, or 1.6
percent.



Despite the weakness in the hard-goods sector during the second
half, durables posted a 600,000-gain in jobs over the year. Eighty-five
percent of the increase came from additions in fabricated metal
products, machinery, electrical and electronic equipment, and
transportation equipment. The electrical equipment and machinery
industries added the most workers, both numerically and on a percentage
basis. Employment gains in machinery reflected the increased demand for
construction, metalworking, and general industrial machinery, as well as
for office equipment. the job gain in the electrical and electronic
equipment industry was concentrated in electronic components and
accessories, a “feeder” industry to other high technology
products. Spurred by growth in this component, the employment level in
electrical and electronic equipment continued to set new records in
1984, while other major growth industries within durables made marked
progress toward previous peaks. For example, the transportation
equipment industry added 125,000 workers over the year. Reflecting the
economy’s deceleration, three-fifths of employment increases in the
four fast-growing durable industries were added in the first half.



Foreign competition played a more obvious role in the primary
metals industry, the only major durable goods industry to post a decline
in jobs over the year. There was a noticeable loss of around 30,000
jobs over the year in the struggling steel and blast furnace products
industry. While steel demand was blunted only briefly by the short auto
strikes in the third quarter, the decline in employment was fairly
steady throughout the year.



Employment in construction-related industries was not particularly
strong, despite a booming first half in the construction industry
itself. Lumber and wood products, furniture and fixtures, and stone,
clay and glass added few workers to payrolls after the first quarter.
By yearend, lumber and furniture industries had recovered more jobs than
were lost in the 1981-82 recession, but levels in all three industries
remained below historical peaks.



Nondurables as a whole showed virtually no job growth, as small
gains in the first half were countered by actual declines in the second
half. Four industries–textiles, apparel, petroleum, and
leather–experienced employment declines for the year. Demand for
domestic products in these industries was also abated by the increasing
volume of imports. Employment increases in printing, along with rubber
and miscellaneous plastics, helped to offset the stagnation in other
nondurables. Gains in printing were steady throughout the year.
Employment in rubber and miscellaneous plastics, however, is driven by
demand in the construction and auto industries; as a result, growth was
concentrated in the first half.



Unlike other industries in the goods-producing sector, mining
experienced moderate, steady employment gains up through the third
quarter of 1984. Virtually all of the mining division’s increase
came from oil and gas extraction, although the number of jobs remained
short of the 1982 peak. Since 1982, the demand for oil has weakened,
while lower oil prices have left less incentive for increasing
exploration and employment.



Automobiles and steel. The automobile and steel industries are
often mentioned together as the prototypes of industries bearing the
costs of “restructuring” the U.S. economy. However, there are
significant differences in the way the two have been affected by the
business cycles of the early 1980’s. The two sketches here
highlight the similarities, the differences, and their effect on
industry employment.



For the past half century, the automobile industry has been a
central element of the U.S. economy. Its impact on other industries is
profound–for each job in the automobile industry there are about 2
associated jobs in the rest of the economy. The three largest auto
manufacturers rank 2, 9, and 38 on Fortune magazine’s listings of
the Nation’s largest industrial conrporations. Since the emplyment
peak in the late 1970’s, however, there have been a number of
developments of the industry. Most obvious has been the effect of the
back-to-back recessions of the early 1980’s. Consumer durables manufacturing, such as for autos, has traditionally been sensitive to
poor economic conditions, as consumers hedge against lower incomes by
deferring “big ticket” purchases. This had tended to lengthen the average useful life of existing cars and lower demand for new autos.
Post-baby-boom demographic patterns have slowed the long-term growth of
the number of new motorists. In addition, as a private study of changes
affecting the U.S. auto industry notes, a “shift in competition
from styling to technology and quality has challenged the existing
competitive strengths of domestic producers. . . .at the same time that
foreign competitors have increased their presence markedly.”



The result of these changes has been a steep decline in the number
of jobs in the automobile industry. After peaking at just over a
million payroll jobs in the last quarter of 1978, auto employment
plummeted 660,000 at the fourth quarter 1982 trough. Despite the sharp
recovery, in part due to strong consumer demand in 1984, payroll jobs in
the industry–875,000 at the end of 1984–were still far below the
level of 6 years before. Similarly, the unemployment rate for
automobile manufacturing averaged slightly more than 4 percent in 1978,
rose to more than 20 percent during the recession year of 1982, and in
the final quarter of 1984 averaged about 6.5 percent. In should be
noted that unemployment rates were lower in the first quarter–just
under 6 percent–before starting to rise again. That the unemployment
rate in the auto industry has roughly paralleled general labor force
developments is in significant contrast to recent developments in the
steel industry.



Throughout the late 1970’s and into the 80’s, the
international steel industry has experienced severe change. World
capacity has diversified geographically and now exceeds annual
consumption needs by as much as 180 million tons. Technological change
in production methods has radically altered the balance among the
subsectors of the steel industry. Changes in demand for, and economies
in the production of, final goods that are particularly steel
intensive–for example, automobiles–have limited the demand for steel
products.



Despite the vast size of its domestic market, the U.S. steel industry has not been isolated from these international trends. A
combination of recession in the early 1980’s, a change in the ratio
of steel consumption to gross national product (including the
“downsizing” of autos), and intense international competition
has contributed to a complex restructuring of the U.S. steel industry.
Between 1977 and 1984, the overall capacity of the steel industry fell
by 16 percent. By the first quarter of 1984, imports accounted for
about one-fourth of raw steel consumption in the U.S. market, up from 18
percent in 1977. Within the industry, “minimill” production
techniques have grown from a 3-percent share of output in 1960 to about
one-fifth currently. Over roughly the same period, the market share of
the major integrated steel firms shrank from about four-fifths in the
1950’s and early 1960’s to just over one-half in 1983.



The structural changes affecting the steel industry have had
significant consequences for employment. While the increases in raw
steel production rates between 1982 and 1984 would normally have
suggested a general increase in payroll employment, such has not been
the case. From the trough of the 1981-82 recession (November 1982) to
December 1983, the steel industry had only recovered 5 percent of the
jobs lost during the downturn, and 1984 saw job levels fall by about
30,000. While it is true that the unemployment rate, as measured by the
Current Population Survey, has fallen in the “blast furnaces,
steel-works, rolling and finishing mills” industrial category, this
undoubtedly reflects a transfer of labor away from the steel industry,
rather than increased employment; that is, unemployed steel workers may
have taken jobs in other industries or withdrawn from the labor force
entirely.



Hours of Work



After steady increases throughout 1983, the factory workweek peaked
at 41 hours in the early months of 1984; this level represented the
longest workweek in manufacturing since 1967. The pattern of increase
was partly a result of increasing factory overtime hours, which rose to
a 1984 peak of 3.7 hours early in the second quarter. Employers often
change hours of work in the short run to reconcile production schedules
with the current number of workers. Adding employees to the payroll is
a costly process, more costly than overtime hours if the increase in
product demand is to be only transitory. If the increased level of
production is viewed as more permanent, the employer will add workers to
reduce overtime hours. As a result, employment will continue to
increase after hours have begun to decline. This pattern was evident in
hours and employment for manufacturing in 1984, particularly within the
durable goods sector. While hours retreated from the first quarter
peak, they remained at historically high levels.



The aggregate hours index is a comprehensive measure of labor
input, taking into account both the number of production or
nonsupervisory employees on nonfarm payrolls and their weekly hours. The
index for the total private sector rose by 3.3 percentage points in the
first six months, reflecting the strength in employment and hours for
goods-producing industries and employment gains in the services sector.
The index continued to edge up in the second half, buoyed by continued
job growth in the services sector. The total private index ended the
year at 114.5, a full 12 points above the previous recession trough.



Full- and part-time workers. Four of every 5 nonagricultural
workers in the United States are employed full time–that is 35 hours or
more a week. The remaining workers, those at work part time, totaled 18
million in the fourth quarter. Most of these (70 percent) worked part
time voluntarily, or for noneconomic reasons. However, 5.5 million were
at work on part-time schedules for economic reasons. These persons
either wanted a full-time job but could not find one or usually worked
full time but had had their hours cut back in response to unfavorable
economic conditions.



The number of persons working part time for economic reasons had
doubted from its late-1978 level to reach 6.4 million by the fourth
quarter of 1982. Seventy percent of the 900,000-improvement since then
took place during 1983.



While the number of persons involuntarily on short workweeks moves
in a cyclical fashion, changes in the number of voluntary part-timers
are not particularly cyclical but rather follow a fairly narrow secular
growth trend. Over the 4 quarters ending in late 1984, there was less
than I percent growth in the number of voluntary part-time workers in
nonagricultural industries, despite a 4-percent increase in persons on
full-time schedules. Voluntaryk part-timers accounted for about 13
percent of nonagricultural workers in the fourth quarter, down slightly
from their 14-percent employment share in 1977.



Although only about 20 percent of employed women were voluntary
part-timers in late 1984, they accounted for close to 60 percent of
persons in all industries on voluntary part-time schedules. Men and
teenagers fairly evenly made up the remaining 40 percent. These
proportions have changed over the last few years, as more women have
joined both the part-time and full-time labor forces, while the number
of teenagers in the labor force has declined. This decline is
especially relevant to the part-time employment issue, because about
half of all working teens were on voluntary part-time schedules in 1984.
Teenagers who work part time average about 17 hours per week, compared
with a 20-hour average for adults.



Labor force growth



The civilian labor force–the employed and the unemployed–grew in
1984, but by less than 2 percent. Both 1983 and 1984 have been years of
slow labor force growth when compared to similar periods of recovery in
the 1970’s. For instance, the second year of recovery from the
1969-70 downturn saw a labor force increase approaching 3 percent. (The
highest fourth-quarter-to-fourth-quarter labor force gains of the
1970’s were recorded in 1972-73 and 1976-77, at 3.3 percent.)
Contributing to the slower growth of the labor force was a decline in
the number of teenagers in the labor force. This was a reflection on
the long-term decline in the teenage population as the baby boom
generation passed into adulthood, to be followed by a generation
characterized by very low birth rates–the so-called “baby-bust” generation.



After a year and a half of rather sluggish increases in labor force
participation, women registered a 0.6-percentage-point increase in their
labor force participation rate, ending 1984 with 53.9 percent of their
population working or looking for work. Men had virtually no change in
labor force participation in 1984, nor did teenagers.



Discouraged Workers


Persons who are neither working nor looking for work are considered
to be not in the labor force. Of the 63 million nonparticipants in the
final quarter of 1984, about 1.3 million were “discouraged
workers.” These persons reported that they wanted a job but were
not looking for work because they believed they could not find it.
While the number of discouraged workers follows the cyclical movements
in unemployment, the discouraged are not included in the count of the
unemployed, because, unlike the unemployed, they have not looked for
work during the 4-week period preceding the survey week. Indeed, they
need not ever have actually tested the job market to be included in the
category.



The total of discouraged workers peaked into the final quarter of
1982 at 1.8 million. The following shows the number of discouraged,
seasonally adjusted in thousands, at the two most recent business cycle
peaks (P) and troughs (T) and for the past 5 quarters.



The majority of discouraged workers cite job market factors, rather
than personal factors–such as age or lack of education or skills–as
their reason for not looking for work. The proportion citing job market
factors have been in the 70-to-80 percent range over the past 3 years,
with the 80-percent figure being registered in the first quarter of
1983, just after the recessionary trough. Over the most recent 4
quarters, the number of discouraged declined by about 130,000, with
decreases occurring among the job-market discouraged and those
discouraged by personal factors.



About 3 of every 5 discouraged workers are women. Interestingly,
this proportion changed little over the course of the most recent
recession, even though cyclical unemployment changes tend to be more
pronounced among men than women. Blacks also make up a
disproportionately large share of the discouraged and in the fourth
quarter accounted for more than 35 percent of the total. There was no
decline in the number of black discouraged workers over the year.



Workers in families



Most labor force participants live in family units. About 65
percent of the labor force in 1984 consisted of persons responsible for
their family units, including those with no spouse present (mainly
women). An additional 20 percent consisted of relatives, generally
teenagers and young adults living with their parents. Thus, only about
15 percent of the labor force were not in family units–fewer than 10
percent who lived alone and 6 percent who lived with others, such as
housemates.



With the overwhelming proportion of the population living in family
units and the growing number of women in the labor force has come an
increase in the number of multi-worker families. In 1984, 44 percent of
all married-couple families had both a husband and wife employed. This
was up from 39 percent just 7 years earlier. A large number of the
remaining married-couple families had two or more workers other than a
husband/wife combination, while others were of retirement age and had no
workers at all.



As employment grew in 1984, so did the proportion of multi-worker
families. In the fourth quarter, the proportion of employed persons who
were the sole support of their families was 24 percent, down about a
percentage point from 1983. This proportion has been edging downward
over time–despite some increases during recessionary periods. Over the
last 7 years, the decline has totaled 4 percentage points.



The decline in joblessness over the year reduced the proportion of
families that had an unemployed member. In the fourth quarter, just
under 10 percent of all families had someone unemployed, down from 11
percent the year earlier and 14 percent at the end of 1982. Moreover,
the rising incidence of multi-worker families means that many of these
families also had an employed family member. The effect of unemployment
within a family is often mitigated by the presence of other workers and
may also be minimized by the receipt of unemployment compensation, which
about one-third of the jobless in 1984 claimed.



These cushioning effects were not available to all the unemployed,
however. In the fourth quarter, about 33 percent of the unemployed
living in families had no employed person in the family. (Data on the
proportion with neither another family member employed nor receiving
unemployment compensation are not available.) While less than 20
percent of the unemployed wives in late 1984 had no workers in their
family, such was the case for almost 45 percent of the unemployed
husbands. Men and women who maintain families alone were much more
likely to be their family’s sole support. About 70 percent of the
unemployed men who maintain families and 80 percent of the women had no
employed person in their family.



It should also be noted that unemployment may be dual in families.
For instance, while husbands overall had a jobless rate of 4.1 percent
in the fourth quarter, those with an unemployed wife had a jobless rate
of more than 13 percent. Similarily, wives as a whole had an
unemployment rate of 5.2 percent, but it was about 17 percent for those
whose husbands also were looking for work. There were about 175,000
couples with dual unemployment, considerably less than in the recession
years.



The likelihood of a woman participating in the labor force is
greatly influenced by her age and marital status, and by whether she has
children. For instance, more than 80 percent of never-married women
ages 25 to 34 were in the labor force in the final quarter of 1984. The
proportion drops to about 65 percent for married women in the same age
group. The presence of young children, not surprisingly, tends to lower
participation still further. Among married women of all ages, those
with preschoolers had a participation rate of about 55 percent, compared
with 67 percent for those with children in school. The effect of young
children in the family was even larger among women who maintain
families, where there is a 20-point participation rate difference
between those with preschoolers and those with school-age children. In
general, divorced women are the most likely to participate in the labor
force and widows the least likely; no doubt the average age of 59 years
for the latter group is an important factor.



Perhaps what is of most importance is not that labor force
participation rates of mothers with young children are lower than those
of women with older children, but rather that participation rates of
mothers are so high. What is more, the largest increases in labor force
participation have been among mothers with young children. In fact, the
participation rate for married women with children under 6 grew by
nearly 10 points in just 5 years and in 1984 far exceeded the rate for
wives with no children present. (It should be noted that the wives
without children tend to be older than the mothers, although certainly
most were pre-retirement age and a number were young newlyweds.) Only
the participation rates of widowed and divorced women have shown little
growth.



Black workers



The labor market situation for black workers has improved notably
over the past 2 years. The unemployment rate for blacks, at 15.1
percent in the fourth quarter of 1984, declined by more than 2.5 points
over the year and by more than 5 points from its all-time high, set in
late 1982. The ratio of black-to-white unemployment, at 2.4 to 1,
remained historically high, however.



Another way to view the differences in the unemployment rates for
blacks and whites is by comparing their late-1984 levels to those
registered in the first quarter of 1977; both of these periods came 8
quarters into recoveries from long and deep recessions. While the rate
for white workers was, in fact, lower than it had been at the same point
in the post-1974-75 recession recovery, the jobless rate for blacks at
the end of 1984 remained above their 1977 level. One reason that
unemployment among blacks is still higher than during the earlier
recovery period is that blacks experienced essentially one long, hard
recession, lasting from early 1980 through late 1982, while white
workers experienced a 1-year period of partial recovery (from the third
quarter of 1980 to the third quarter of 1981). Hence, the unemployment
rate for blacks at the “official” business cycle peak in the
third quarter of 1981 was even higher than that registered during the
“official” recessionary trough a year earlier. (See chart 2.)



The jobless rate for black men, at 13.1 percent in late 1984, had
fallen by about 7 points from its recession peak. Joblessness among
white men only dropped about 3.5 percentage points but, at 5.4 percent,
was substantially below the national average. Unemployment among black
women, like that of white women, is less cyclical, meaning less prone to
the ups and downs of the business cycle, than that of their male
counterparts. The late-1984 rate for black women of 13.2 percent was
about 4 points below the recession high but was substantially higher
than the 5.6 percent registered for white women.



Nearly half of all black teenagers in the labor force in late 1982
were unemployed, and no improvement occurred during the next year. By
late 1984, their unemployment rate dropped to 41 percent, about matching
the level in 1977. Interestingly, white teenagers, like black teens and
adults, showed no improvement in joblessness during the 1980-81
recovery. But the unemployment rate for white teens declined in both
1983 and 1984. By late 1984, their rate was down to 15.6 percent;
hence, black teens were 2.6 times as likely as white teens to be
unemployed.



The actual number of unemployed blacks rose from about 1.3 million
before the 1980 recession to 2.4 million in the second quarter of 1983
and receded to 1.9 million by late 1984. About 200,000 of that decline
took place in 1984.



On the employment side, the count dropped from 9.5 million before
the 1980 recession to 9.2 million by late 1982 and then grew to 10.4
million by late 1984. Most of the improvement–about 850,000–took
place over the last 4 quarters.



The ratio of employment-to-population, by telling us what
proportion of the population is employed, helps put employment changes
into perspective in a setting of a continually growing population.
About 53 percent of all working-age blacks in the civilian population
were employed in late 1984; among whites, the proportion was 61 percent.
Much of the difference can be attributed to a 10-point gap in the ratios
for black and white men–65 versus 75 percent. The ratios for men
decline due both to economic downturns and earlier retirements.



Unlike their male counterparts, black women historically have had
higher employment ratios than white women. But faster labor force
growth among white women has brought their ratios to about the same
level–50 percent. That high mark, representing a record for both
groups of women, resulted from steady labor force participation during
the recessionary period and a resumption of growth during the recovery.



As indicated earlier, the population of teenagers has been
shrinking. For black teens, the decline began in 1981 and for white
teens, in 1978. Both 16-to-19-year-old groups contracted by about 3
percent during 1984. But the number of employed black teens actually
grew by almost 100,000 during 1984, raising their employment-population
ratio nearly 5 points, to 23 percent. The employment of white teens was
about unchanged, and when combined with the decrease in their
population, their employment ratio rose, albeit by only 1 percentage
point. Perhaps of more significance, however, is the fact that the
employment ratio for black teens remains less than half that of white
teens, whose ratio was 48 percent in late 1984.



The kinds of jobs held by black workers are quite different from
those of whites. One-third of black men worked as machine operators,
fabricators, and laborers in 1984, compared to one-fifth of white men.
(See table 3.) Close to 20 percent of black men were in service
occupations, twice the proportion of whites. Black men were
underrepresented in all other fields, with about 15 percent in precision
production, craft, and repair–compared to more than 20 percent of white
males–and 12 percent in managerial and professional specialty
jobs–compared to about 25 percent among whites.



The occupational distribution of black women also was notably
different from that of their white counterparts. About 30 percent of
the black women were in service occupations, in which fewer than
one-fifth of white women, worked. Like black men, black women were
overrepresented as operators, fabricators, and laborers. While more
than a third of the black female workers held jobs in the technical,
sales, and administrative support category, nealry half of all white
women were so employed. For both black and white women, administrative
support including clerical jobs accounted for the majority of these
positions. Black women were underrepresented in both managerial and
professional specialty occupations. Only 2.5 percent of working black
women or white women held precision production, craft, and repair jobs.



Hispanic workers



Like other worker groups, persons of Hispanic origin shared in the
economic recovery of the last 2 years, as their jobless rate dropped
from 15.3 to 10.3 percent. In fact, the fourth-quarter 1984 figure
compares favorably with the rate posted 2 years into the recovery from
the 1973-75 recession. The labor market situation for Hispanic workers
more or less paralleled the course of the business cycle, with two
separate recessionary periods during the 1980’s. The ratio of
Hispanic-to-white unemployment rates was 1.7 to 1 in late 1984; that
relationship has not altered appreciably since the inception of the
Hispanic unemployment data series more than 10 years ago.



Hispanic men, women, and teenagers all exhibited substantial
unemployment rate declines, during the recovery from the latest
recession. Between the fourth quarters of 1982 and 1984, the jobless
rate for Hispanic men fell from 12.9 to 8.6 percent. For women, the
rate dropped from 13.7 to 9.5 percent, and for teens, unemployment fell
from 31.6 percent to 21.9 percent. (These data are not available on a
seasonally adjusted basis and hence are not fully comparable with those
shown for whites and blacks in table 1.)



The nearly 10 million working-age persons of Hispanic origin
residing in the United States (excluding Puerto Rico) accounted for 5.6
percent of the overall population. The largest of the Hispanic ethnic
groups was persons of Mexican origin, with 60 percent of the Hispanic
total. The jobless rate for persons for Mexican origin (at 9.9 percent)
was between that of workers of Puerto Rican origin (13.8 percent) and
those of Cuban origin (7.3 percent). Cuban workers tend to be older and
better educated than other Hispanics.



Employment among Hispanics, which had fallen by about 400,000
during the latest recession, has since grown by 700,000. Their
employment-population ratio reached 58 percent–still shy of the
60-percent high posted in early 1979–but nonetheless substantially
above the recessionary level of 54 percent.



The jobs Hispanic men hold are, with only a few exceptions, quite
similar to those of black men. (See table 3.) Like blacks, Hispanic
men in 1984 were overrepresented as machine operators, fabricators, and
laborers, and in service occupations, while their numbers in managerial
and professional specialty positions and sales occupations were
relatively small. However, like white men, one-fifth of Hispanic males
held precision production, craft, and repair jobs. About 9 percent of
Hispanic men worked in farming, forestry, and fishing, a category which
accounts for only about 5 percent of white men and black men.



The occupational distribution of Hispanic women is not especially
like that of either white women or black women. Slightly more than
one-fourth provided clerical and administrative support and just under
one-fourth worked in service occupations. The next largest group of
Hispanic female workers was machine operators, fabricators, and
laborers–particularly textile, apparel, and furnishings machine
operators, among whom Hispanics hold a disproportionately large share of
the jobs. Hispanic women were especially poorly represented in the
professional specialty category, as well as in executive,
administrative, and managerial jobs.



IN SUMMARY, it would be accurate to call 1984 a year of strong
employment gains–about 3 million more people and jobs by the end of the
year than were employed a year earlier. However, employment growth did
pause in the summer months before advancing again in the last quarter.
Whether this moderate growth will continue will be the employment story
for 1985.

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