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

The employment situation in 1984 reflected extraordinary rates ofemployment growth in the first 2 quarters, a pause in the summer months,and additional employment growth in the last quarter of the year. Totalcivilian employment, as measured by the Current Population Survey, stoodat 106.0 million in the fourth quarter after seasonal adjustment.

Employees on nonagricultural payrolls,as measured by the CurrentEmployment Statistics program, totaled 95.5 milion of yearend. Bothseries were up by about 7 million from the trought of the 1981-82recession. With the robust employment growth early in the year, unemploymentcontinued to drop sharply, but, as the job growth slowed, theunemployment decline slowed after midyear. At 8.2 million in the fourthquarter, unemployment was down about 1.

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3 million from the year beforeand more than 3.5 million from the recession trough. At year’send, 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 weredown 1.3 percentage points from the fourth quarter of 1983. This article examines the behavior of the key labor force timeseries, both for 1984 and in relation to the business cycle, and detailsthe effects on various social and economic groups.

Special emphasis isplaced on such groups as minority workers, as well as on families andtheir relationship to the labor market, and selected industries thathave had prominent roles in the changing employment structure of theeconomy. Unemployment As employment growth paused in mid-1984, so faded the rapidreduction in unemployment that had occurred in the first 6 quarters ofrecovery. The rate of unemployment for civilian workers dropped morethan a full percentage point from the fourth quarter of 1983 to thesecond quarter of 1984 and then showed more modest improvement, endingthe year at 7.2 percent. Among the major labor force groups by age and sex, men andteenagers showed declines in unemployment in all 4 quarters of 1984.After large decreases in the first and second quarters, the unemploymentrate for men edged down slightly in the last two to end the year at 6.2percent. The rate for women, however, actually edged up a bit in thethird 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 butremained at a persistently high level, ending the year at 18.4 percent. The continuing decline in unemployment among adult males in thesecond half reflected improvements among black men, as their ratedropped from 14.8 to 13.1 percent between the second and fourthquarters.

Over the same period, white male unemployment edged down toend the year at 5.4 percent. The overall unemployment rate for whitesdropped slightly in the second half, to 6.

2 percent, following a muchstronger improvement in the first half. Among blacks, unemploymentdropped 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. Blackteenagers continued to have a very high rate of unemployment. Evenafter a 6.6-percentage-point drop from fourth quarter 1983 to the end of1984, unemployment affected about two-fifths of black teens in the laborforce.

The unemployment rate for workers of Hispanic origin showed adecline of 1.8 percentage points over the year to 10.3 percent, withmost of the improvement taking place in the first quarter. Duration and reasons. The median duration of unemployment fellfrom 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 toend the year at 17.1 weeks. These declines reflected a sharp reductionin the number of the unemployed who had been out of work for a longtime. The number of person jobless for 6 months or longer declined bythree-quarters of a million over the year.

Nevertheless, at yearendthere were still 1.4 million persons who had been unemployed for half ayear or more. Protracted unemployment is particularly a problem for men55 years and older. The number of job losers among the unemployed dropped by about amillion between the end of 1983 and the fourth quarters of 1984 as theirshare of the unemployed fell from 55 to 51 percent. It should be noted,however, that this cyclically important indicator showed virtually nochange from the third quarter to the fourth. Many observers treat ahigher proportion of those who leave jobs voluntarily as an indicator ofworker confidence int he economy; that proportion of the unemployed roseirregularly 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 oftotal employment experienced in 1983. From the fourth quarter of 1983to 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 decliningrate of employment growth was reflected in other quarterly economicstatistics, such as real Gross National Product (computed at aseasonally adjusted annual rate) and the Index of Industrial Production: Overall employment growth for the year was 3.3 percent, measuredfrom the fourth quarter of 1983 to the fourth quarter of 1984. Menaccounted for about 54 percent of the increase in employment, women formore 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 withjobs (the employment-population ratio) rose more than a full percentagepoint over the year to 59.8 percent in the fourth quarter. This wasvery close to the quarterly high of 60.0 percent reached in 1979.Employment growth exceeded population growth for men and women. Amongteenagers, the decline in population coupled with fairly steadyemployment levels also resulted in a higher employment-population ratio.

There has been some concern over the composition of employmentgrowth over the course of the current recovery. Such concerns are oftenbased on the fact that the service-producing industries are growing at afaster rate than goods-producing industries. It is also useful toanalyze the occupational distribution of job growth over the past year.While some analysts maintain that the changing industrial composition ofemployment 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 1984demonstrate that the latter occupational groups were the fastestgrowing, and the former occupations were among the slower. Employmentgrowth by occupational group: The administrative support subsector, which includes clericalworkers, grew by only about 2 percent over the year, while, in adevelopment linked to recovery in the industrial sector, handlers,equipment cleaners, helpers, and laborers saw an employment increase of5.1 percent.

Nonfarm payroll employment The number of nonagricultural jobs surged in the first half of1984, sustained by the strong cyclical recovery. Growth continued at asomewhat slower pace during the second half, as the job total reached95.5 million by yearend, surpassing the recession trough by 6.

8 millionemployees. All in all, 2 years of economic recovery added about two andone-half times the number of payroll jobs lost during the 1981-82recession. Virtually all of that recession loss, however, occurred inthe goods-producing sector, while two-thirds of the recovery gains tookplace in the service-producing sector. Indeed, goods-sector jobs werestill slightly short of their pre-recession peak at the end of 1984.Employment growth in the goods sector essentially stalled during thesecond half, as the service sector accounted for almost 85 percent ofpayroll additions. Despite a less heady pace of job growth, the recovery was stillproducing solid job gains, particularly when viewed in comparison withother post-World War II recoveries. Because the depth and duration ofthe 1973-75 recession were quite similar to those of the 1981-82recession, the recovery beginning in 1975 provides a useful benchmarkfor assessing the strength of the current expansion.

When employmentgrowth in each recovery is indexed to the respective cyclical trough, wefind that relative employment growth for the current recovery hasincreasingly exceeded the post-1975 experience with each successivemonth. The pattern varies markedly by sector, however. In thegoods-producing sector, the post-1982 recovery had an extended period offaster growth than the earlier recovery, but it was marked by a pause inthe rate of growth some 20 months into the recovery. In contrast,indices for the resilient service-producing sector tracked closely untilearly 1984, when the rate of growth in this recovery quickened andsurpassed the post-1975 index. The service-producing index acceleratedagain in the fourth quarter after hesitating slightly in the third.(See chart 1.

) Service-producing sector. The service-producing sector gained 2.7million jobs between the fourth quarters of 1983 and 1984, contributing70 percent of the additions to total employment. This increase was ledby vigorous growth in services and retail trade. The services divisioncreated more than a million jobs, well over one-third of thesector’s increase. This division encompasses a diversity ofindustries–from hotels, entertainment, and recreation to business,health, educational, social, and legal services. While the servicesdivision as a whole continued its historical trend of secular growth,health services exhibited a lower rate of employment growth than inprevious years. An actual decline in hospital employment in 1984explains the slower pace, as hospitals streamlined management and staffin response to lower demand and pressure for more cost-effective healthservices.

Business services, one of the more cyclically sensitive of theservice industries, led the division in both magnitude and rate ofgrowth, making up 40 percent of the division’s employment gain in1984. A continuing upward trend in personnel supplyservices–particularly in temporary help–explained a substantialproportion of business services’ growth, although the pace ofgrowth in this industry was a bit slower than in 1983. The temporaryhelp industry contributed about 1 in 30 of the additional privatepayroll jobs in 1984, down from 1 in 20 during earlier stages of theeconomic recovery. Temporaries are used by a variety of industries, notonly to meet short-term labor shortages but also to meet labor needswhen employers are uncertain of the staying power of product demand.

The use of temporaries declines as employers reassess their needs andadd to their permanent work force. Jobs in retail trade increased by 785,000 over the year. Eatingand drinking places and general merchandise stores contributed abouthalf the increase, with general merchandise showing the higher growthrate. Employment gains were particularly strong in the first and secondquarters but tapered off in the third quarter as consumer spending flattened and retail sales lagged. By yearend, the pace picked up onceagain in anticipation of strong holiday sales. In wholesale trade, a 280,000-increase was dominated by additionalworkers involved in the sale of durable goods, particularly incommercial and industrial equipment.

First-quarter employment gainswere particularly strong for cyclically sensitive durables and remainedsteady throughout 1984, despite a drop in the volume of sales after thesecond quarter. Elsewhere in the service-producing sector, employment intransportation and public utilities added 180,000 jobs in 1984, bringingthe industry total above its pre-recession peak. All of the increaseoccurred in transportation, with about half of it coming from trucking.Finance, insurance, and real estate jobs were also up 200,000. Incontrast to previous years, employment in State and local governmentpicked up as the economic recovery fueled greater tax revenues, butFederal employment remained essentially unchanged. Goods-producing sector. The goods sector–construction andmanufacturing, in particular–enjoyed a strong cyclical rebound early inthe recovery and exhibited a higher rate of growth than theservice-producing sector in the recovery’s seconf through sixthquarters.

The pace of growth moderated in the latter half of 1984,however, after a midyear climb in mortgage interest rates and anincreasing volume of factory-made imports. By yearend, onlyconstruction had fully recovered the number of jobs lost during theprevious recession, as manufacturing employment had recouped 75 percentof its job loss, and mining employment was still below the levelrecorded at the recession trough. The moderation in goods-producing employment growth was reflectedin the Bureau of Labor Statistics’ diffusion index, which isheavily weighted toward manufacturing.

Between 70 and 80 percent of the186 composite industries registered job gains (over 3-month spans)during the first 2 quarters; the index hovered around 60 percent duringthe second half. New jobs in construction grew at a less rapid pace in the secondhalf, after a strong performance in the first and second quarters. Themajor weak spot in the construction market was in traditionalsingle-family housing. Mortgage interest rates rose sharply in thespring, resulting in slower sales in the summer and a stalling inhousing starts. These factors weakened the demand for constructionlabor. Cushioning the construction slowdown in the last two quarterswas a backlog in orders for new homes left over from the pent-up demandfrom recession years. Moreover, home mortgage rates had edged down byyearend, and an expansion in multifamily housing reflected some of thedemand from new households that would have otherwise been forsingle-family dwellings. The construction industry added 340,000 workers to its payrollsover the course of 1984.

Four-fifths of the increase was in the specialtrades industry, which includes plumbing, painting, electrical work,masonry, or concrete work. The pattern of job growth in special tradesdominated the trend for construction as a whole, and most of theemployment gains for both series occurred in the first half. Atyearend, construction employment had regained 170 percent of the jobslost during the recession. The rebound in manufacturing employment by the end of 1984 had beenalmost entirely within durable goods, while most of the less cyclicalnondurables industries showed little or no growth. The moderation ofjobs gains in the last half appeared to be associated with the wideningmerchandise trade deficit. Stimulated by the strength of the dollarabroad, the volume of imports grew throughout 1984, with virtually allof the increase in factory-made products. Paradoxically, the usualefforts of domestic manufacturers to remain competitive did notstimulate factory job growth at home as much as might have beenexpected. The investment in more modern equipment to increaseproductivity would normally benefit industries such as machinery,electrical and electronic equipment, and fabricated metal productsbecause of increased demand for their products.

In 1984, however, thecapital investment dollar was worth more when spent on equipmentproduced overseas. Foreign competition alone, however, did not explain the pause indurable goods’ job growth. The overriding factor was the coolingof a heated recovery.

New orders for durable goods failed to post biggains after the first quarter, and factory output flattened,particularly in durables. The rate of growth in gross national productfaltered with industrial production. Durable goods employment increased430,000 from fourth quarter 1983 to second quarter 1984, or 3.9 percent;the second-to-fourth quarter increase was only 180,000 workers, or 1.6percent.

Despite the weakness in the hard-goods sector during the secondhalf, durables posted a 600,000-gain in jobs over the year. Eighty-fivepercent of the increase came from additions in fabricated metalproducts, machinery, electrical and electronic equipment, andtransportation equipment. The electrical equipment and machineryindustries added the most workers, both numerically and on a percentagebasis. Employment gains in machinery reflected the increased demand forconstruction, metalworking, and general industrial machinery, as well asfor office equipment. the job gain in the electrical and electronicequipment industry was concentrated in electronic components andaccessories, a “feeder” industry to other high technologyproducts. Spurred by growth in this component, the employment level inelectrical and electronic equipment continued to set new records in1984, while other major growth industries within durables made markedprogress toward previous peaks. For example, the transportationequipment industry added 125,000 workers over the year.

Reflecting theeconomy’s deceleration, three-fifths of employment increases in thefour fast-growing durable industries were added in the first half. Foreign competition played a more obvious role in the primarymetals industry, the only major durable goods industry to post a declinein jobs over the year. There was a noticeable loss of around 30,000jobs over the year in the struggling steel and blast furnace productsindustry.

While steel demand was blunted only briefly by the short autostrikes in the third quarter, the decline in employment was fairlysteady throughout the year. Employment in construction-related industries was not particularlystrong, despite a booming first half in the construction industryitself. 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 thanwere lost in the 1981-82 recession, but levels in all three industriesremained below historical peaks.

Nondurables as a whole showed virtually no job growth, as smallgains in the first half were countered by actual declines in the secondhalf. Four industries–textiles, apparel, petroleum, andleather–experienced employment declines for the year. Demand fordomestic products in these industries was also abated by the increasingvolume of imports. Employment increases in printing, along with rubberand miscellaneous plastics, helped to offset the stagnation in othernondurables. Gains in printing were steady throughout the year.Employment in rubber and miscellaneous plastics, however, is driven bydemand in the construction and auto industries; as a result, growth wasconcentrated in the first half.

Unlike other industries in the goods-producing sector, miningexperienced moderate, steady employment gains up through the thirdquarter of 1984. Virtually all of the mining division’s increasecame from oil and gas extraction, although the number of jobs remainedshort of the 1982 peak. Since 1982, the demand for oil has weakened,while lower oil prices have left less incentive for increasingexploration and employment. Automobiles and steel. The automobile and steel industries areoften mentioned together as the prototypes of industries bearing thecosts of “restructuring” the U.S. economy.

However, there aresignificant differences in the way the two have been affected by thebusiness cycles of the early 1980’s. The two sketches herehighlight the similarities, the differences, and their effect onindustry employment. For the past half century, the automobile industry has been acentral element of the U.S. economy. Its impact on other industries isprofound–for each job in the automobile industry there are about 2associated jobs in the rest of the economy. The three largest automanufacturers rank 2, 9, and 38 on Fortune magazine’s listings ofthe Nation’s largest industrial conrporations.

Since the emplymentpeak in the late 1970’s, however, there have been a number ofdevelopments of the industry. Most obvious has been the effect of theback-to-back recessions of the early 1980’s. Consumer durables manufacturing, such as for autos, has traditionally been sensitive topoor economic conditions, as consumers hedge against lower incomes bydeferring “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 ofthe number of new motorists. In addition, as a private study of changesaffecting the U.S. auto industry notes, a “shift in competitionfrom styling to technology and quality has challenged the existingcompetitive strengths of domestic producers.

. . .at the same time thatforeign competitors have increased their presence markedly.” The result of these changes has been a steep decline in the numberof jobs in the automobile industry.

After peaking at just over amillion payroll jobs in the last quarter of 1978, auto employmentplummeted 660,000 at the fourth quarter 1982 trough. Despite the sharprecovery, in part due to strong consumer demand in 1984, payroll jobs inthe industry–875,000 at the end of 1984–were still far below thelevel of 6 years before. Similarly, the unemployment rate forautomobile manufacturing averaged slightly more than 4 percent in 1978,rose to more than 20 percent during the recession year of 1982, and inthe final quarter of 1984 averaged about 6.5 percent. In should benoted that unemployment rates were lower in the first quarter–justunder 6 percent–before starting to rise again. That the unemploymentrate in the auto industry has roughly paralleled general labor forcedevelopments is in significant contrast to recent developments in thesteel industry. Throughout the late 1970’s and into the 80’s, theinternational steel industry has experienced severe change. Worldcapacity has diversified geographically and now exceeds annualconsumption needs by as much as 180 million tons.

Technological changein production methods has radically altered the balance among thesubsectors of the steel industry. Changes in demand for, and economiesin the production of, final goods that are particularly steelintensive–for example, automobiles–have limited the demand for steelproducts. Despite the vast size of its domestic market, the U.S.

steel industry has not been isolated from these international trends. Acombination of recession in the early 1980’s, a change in the ratioof steel consumption to gross national product (including the”downsizing” of autos), and intense international competitionhas contributed to a complex restructuring of the U.S. steel industry.Between 1977 and 1984, the overall capacity of the steel industry fellby 16 percent. By the first quarter of 1984, imports accounted forabout one-fourth of raw steel consumption in the U.

S. market, up from 18percent in 1977. Within the industry, “minimill” productiontechniques have grown from a 3-percent share of output in 1960 to aboutone-fifth currently. Over roughly the same period, the market share ofthe major integrated steel firms shrank from about four-fifths in the1950’s and early 1960’s to just over one-half in 1983.

The structural changes affecting the steel industry have hadsignificant consequences for employment. While the increases in rawsteel production rates between 1982 and 1984 would normally havesuggested a general increase in payroll employment, such has not beenthe case. From the trough of the 1981-82 recession (November 1982) toDecember 1983, the steel industry had only recovered 5 percent of thejobs lost during the downturn, and 1984 saw job levels fall by about30,000. While it is true that the unemployment rate, as measured by theCurrent Population Survey, has fallen in the “blast furnaces,steel-works, rolling and finishing mills” industrial category, thisundoubtedly reflects a transfer of labor away from the steel industry,rather than increased employment; that is, unemployed steel workers mayhave taken jobs in other industries or withdrawn from the labor forceentirely. Hours of Work After steady increases throughout 1983, the factory workweek peakedat 41 hours in the early months of 1984; this level represented thelongest workweek in manufacturing since 1967. The pattern of increasewas partly a result of increasing factory overtime hours, which rose toa 1984 peak of 3.

7 hours early in the second quarter. Employers oftenchange hours of work in the short run to reconcile production scheduleswith the current number of workers. Adding employees to the payroll isa costly process, more costly than overtime hours if the increase inproduct demand is to be only transitory. If the increased level ofproduction is viewed as more permanent, the employer will add workers toreduce overtime hours. As a result, employment will continue toincrease after hours have begun to decline. This pattern was evident inhours and employment for manufacturing in 1984, particularly within thedurable goods sector.

While hours retreated from the first quarterpeak, they remained at historically high levels. The aggregate hours index is a comprehensive measure of laborinput, taking into account both the number of production ornonsupervisory employees on nonfarm payrolls and their weekly hours. Theindex for the total private sector rose by 3.

3 percentage points in thefirst six months, reflecting the strength in employment and hours forgoods-producing industries and employment gains in the services sector.The index continued to edge up in the second half, buoyed by continuedjob growth in the services sector. The total private index ended theyear at 114.5, a full 12 points above the previous recession trough. Full- and part-time workers.

Four of every 5 nonagriculturalworkers in the United States are employed full time–that is 35 hours ormore a week. The remaining workers, those at work part time, totaled 18million in the fourth quarter. Most of these (70 percent) worked parttime voluntarily, or for noneconomic reasons. However, 5.5 million wereat work on part-time schedules for economic reasons. These personseither wanted a full-time job but could not find one or usually workedfull time but had had their hours cut back in response to unfavorableeconomic conditions. The number of persons working part time for economic reasons haddoubted from its late-1978 level to reach 6.

4 million by the fourthquarter of 1982. Seventy percent of the 900,000-improvement since thentook place during 1983. While the number of persons involuntarily on short workweeks movesin a cyclical fashion, changes in the number of voluntary part-timersare not particularly cyclical but rather follow a fairly narrow seculargrowth trend. Over the 4 quarters ending in late 1984, there was lessthan I percent growth in the number of voluntary part-time workers innonagricultural industries, despite a 4-percent increase in persons onfull-time schedules. Voluntaryk part-timers accounted for about 13percent of nonagricultural workers in the fourth quarter, down slightlyfrom their 14-percent employment share in 1977. Although only about 20 percent of employed women were voluntarypart-timers in late 1984, they accounted for close to 60 percent ofpersons in all industries on voluntary part-time schedules. Men andteenagers fairly evenly made up the remaining 40 percent. Theseproportions have changed over the last few years, as more women havejoined both the part-time and full-time labor forces, while the numberof teenagers in the labor force has declined.

This decline isespecially relevant to the part-time employment issue, because abouthalf of all working teens were on voluntary part-time schedules in 1984.Teenagers who work part time average about 17 hours per week, comparedwith a 20-hour average for adults. Labor force growth The civilian labor force–the employed and the unemployed–grew in1984, but by less than 2 percent. Both 1983 and 1984 have been years ofslow labor force growth when compared to similar periods of recovery inthe 1970’s.

For instance, the second year of recovery from the1969-70 downturn saw a labor force increase approaching 3 percent. (Thehighest fourth-quarter-to-fourth-quarter labor force gains of the1970’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 inthe number of teenagers in the labor force. This was a reflection onthe long-term decline in the teenage population as the baby boomgeneration passed into adulthood, to be followed by a generationcharacterized by very low birth rates–the so-called “baby-bust” generation. After a year and a half of rather sluggish increases in labor forceparticipation, women registered a 0.

6-percentage-point increase in theirlabor force participation rate, ending 1984 with 53.9 percent of theirpopulation working or looking for work. Men had virtually no change inlabor force participation in 1984, nor did teenagers.

Discouraged Workers Persons who are neither working nor looking for work are consideredto be not in the labor force. Of the 63 million nonparticipants in thefinal quarter of 1984, about 1.3 million were “discouragedworkers.” These persons reported that they wanted a job but werenot looking for work because they believed they could not find it.While the number of discouraged workers follows the cyclical movementsin unemployment, the discouraged are not included in the count of theunemployed, because, unlike the unemployed, they have not looked forwork during the 4-week period preceding the survey week.

Indeed, theyneed not ever have actually tested the job market to be included in thecategory. The total of discouraged workers peaked into the final quarter of1982 at 1.8 million. The following shows the number of discouraged,seasonally adjusted in thousands, at the two most recent business cyclepeaks (P) and troughs (T) and for the past 5 quarters.

The majority of discouraged workers cite job market factors, ratherthan personal factors–such as age or lack of education or skills–astheir reason for not looking for work. The proportion citing job marketfactors 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 of1983, just after the recessionary trough. Over the most recent 4quarters, the number of discouraged declined by about 130,000, withdecreases occurring among the job-market discouraged and thosediscouraged by personal factors. About 3 of every 5 discouraged workers are women. Interestingly,this proportion changed little over the course of the most recentrecession, even though cyclical unemployment changes tend to be morepronounced among men than women. Blacks also make up adisproportionately large share of the discouraged and in the fourthquarter accounted for more than 35 percent of the total. There was nodecline in the number of black discouraged workers over the year. Workers in families Most labor force participants live in family units.

About 65percent of the labor force in 1984 consisted of persons responsible fortheir family units, including those with no spouse present (mainlywomen). An additional 20 percent consisted of relatives, generallyteenagers and young adults living with their parents. Thus, only about15 percent of the labor force were not in family units–fewer than 10percent who lived alone and 6 percent who lived with others, such ashousemates. With the overwhelming proportion of the population living in familyunits and the growing number of women in the labor force has come anincrease in the number of multi-worker families. In 1984, 44 percent ofall married-couple families had both a husband and wife employed. Thiswas up from 39 percent just 7 years earlier. A large number of theremaining married-couple families had two or more workers other than ahusband/wife combination, while others were of retirement age and had noworkers at all.

As employment grew in 1984, so did the proportion of multi-workerfamilies. In the fourth quarter, the proportion of employed persons whowere the sole support of their families was 24 percent, down about apercentage point from 1983. This proportion has been edging downwardover time–despite some increases during recessionary periods. Over thelast 7 years, the decline has totaled 4 percentage points. The decline in joblessness over the year reduced the proportion offamilies that had an unemployed member. In the fourth quarter, justunder 10 percent of all families had someone unemployed, down from 11percent the year earlier and 14 percent at the end of 1982. Moreover,the rising incidence of multi-worker families means that many of thesefamilies also had an employed family member.

The effect of unemploymentwithin a family is often mitigated by the presence of other workers andmay also be minimized by the receipt of unemployment compensation, whichabout 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 unemployedliving in families had no employed person in the family. (Data on theproportion with neither another family member employed nor receivingunemployment compensation are not available.) While less than 20percent of the unemployed wives in late 1984 had no workers in theirfamily, such was the case for almost 45 percent of the unemployedhusbands. Men and women who maintain families alone were much morelikely to be their family’s sole support. About 70 percent of theunemployed men who maintain families and 80 percent of the women had noemployed 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 percentin the fourth quarter, those with an unemployed wife had a jobless rateof more than 13 percent. Similarily, wives as a whole had anunemployment rate of 5.2 percent, but it was about 17 percent for thosewhose husbands also were looking for work. There were about 175,000couples with dual unemployment, considerably less than in the recessionyears.

The likelihood of a woman participating in the labor force isgreatly influenced by her age and marital status, and by whether she haschildren. For instance, more than 80 percent of never-married womenages 25 to 34 were in the labor force in the final quarter of 1984. Theproportion drops to about 65 percent for married women in the same agegroup. The presence of young children, not surprisingly, tends to lowerparticipation still further. Among married women of all ages, thosewith preschoolers had a participation rate of about 55 percent, comparedwith 67 percent for those with children in school. The effect of youngchildren in the family was even larger among women who maintainfamilies, where there is a 20-point participation rate differencebetween those with preschoolers and those with school-age children. Ingeneral, divorced women are the most likely to participate in the laborforce and widows the least likely; no doubt the average age of 59 yearsfor the latter group is an important factor.

Perhaps what is of most importance is not that labor forceparticipation rates of mothers with young children are lower than thoseof women with older children, but rather that participation rates ofmothers are so high. What is more, the largest increases in labor forceparticipation have been among mothers with young children. In fact, theparticipation rate for married women with children under 6 grew bynearly 10 points in just 5 years and in 1984 far exceeded the rate forwives with no children present. (It should be noted that the wiveswithout children tend to be older than the mothers, although certainlymost were pre-retirement age and a number were young newlyweds.

) Onlythe participation rates of widowed and divorced women have shown littlegrowth. Black workers The labor market situation for black workers has improved notablyover the past 2 years. The unemployment rate for blacks, at 15.1percent in the fourth quarter of 1984, declined by more than 2.5 pointsover the year and by more than 5 points from its all-time high, set inlate 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 forblacks and whites is by comparing their late-1984 levels to thoseregistered in the first quarter of 1977; both of these periods came 8quarters into recoveries from long and deep recessions. While the ratefor white workers was, in fact, lower than it had been at the same pointin the post-1974-75 recession recovery, the jobless rate for blacks atthe end of 1984 remained above their 1977 level. One reason thatunemployment among blacks is still higher than during the earlierrecovery period is that blacks experienced essentially one long, hardrecession, lasting from early 1980 through late 1982, while whiteworkers experienced a 1-year period of partial recovery (from the thirdquarter of 1980 to the third quarter of 1981). Hence, the unemploymentrate for blacks at the “official” business cycle peak in thethird 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, hadfallen by about 7 points from its recession peak. Joblessness amongwhite men only dropped about 3.5 percentage points but, at 5.4 percent,was substantially below the national average. Unemployment among blackwomen, like that of white women, is less cyclical, meaning less prone tothe ups and downs of the business cycle, than that of their malecounterparts. The late-1984 rate for black women of 13.2 percent wasabout 4 points below the recession high but was substantially higherthan the 5.

6 percent registered for white women. Nearly half of all black teenagers in the labor force in late 1982were unemployed, and no improvement occurred during the next year. Bylate 1984, their unemployment rate dropped to 41 percent, about matchingthe level in 1977. Interestingly, white teenagers, like black teens andadults, showed no improvement in joblessness during the 1980-81recovery.

But the unemployment rate for white teens declined in both1983 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 beunemployed.

The actual number of unemployed blacks rose from about 1.3 millionbefore the 1980 recession to 2.4 million in the second quarter of 1983and receded to 1.9 million by late 1984. About 200,000 of that declinetook place in 1984. On the employment side, the count dropped from 9.5 million beforethe 1980 recession to 9.2 million by late 1982 and then grew to 10.

4million by late 1984. Most of the improvement–about 850,000–tookplace over the last 4 quarters. The ratio of employment-to-population, by telling us whatproportion of the population is employed, helps put employment changesinto perspective in a setting of a continually growing population.About 53 percent of all working-age blacks in the civilian populationwere 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 ratiosfor black and white men–65 versus 75 percent. The ratios for mendecline due both to economic downturns and earlier retirements. Unlike their male counterparts, black women historically have hadhigher employment ratios than white women. But faster labor forcegrowth among white women has brought their ratios to about the samelevel–50 percent. That high mark, representing a record for bothgroups of women, resulted from steady labor force participation duringthe recessionary period and a resumption of growth during the recovery. As indicated earlier, the population of teenagers has beenshrinking.

For black teens, the decline began in 1981 and for whiteteens, in 1978. Both 16-to-19-year-old groups contracted by about 3percent during 1984. But the number of employed black teens actuallygrew by almost 100,000 during 1984, raising their employment-populationratio nearly 5 points, to 23 percent. The employment of white teens wasabout unchanged, and when combined with the decrease in theirpopulation, their employment ratio rose, albeit by only 1 percentagepoint. Perhaps of more significance, however, is the fact that theemployment ratio for black teens remains less than half that of whiteteens, whose ratio was 48 percent in late 1984. The kinds of jobs held by black workers are quite different fromthose 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 serviceoccupations, twice the proportion of whites. Black men wereunderrepresented in all other fields, with about 15 percent in precisionproduction, craft, and repair–compared to more than 20 percent of whitemales–and 12 percent in managerial and professional specialtyjobs–compared to about 25 percent among whites. The occupational distribution of black women also was notablydifferent from that of their white counterparts. About 30 percent ofthe black women were in service occupations, in which fewer thanone-fifth of white women, worked. Like black men, black women wereoverrepresented as operators, fabricators, and laborers.

While morethan a third of the black female workers held jobs in the technical,sales, and administrative support category, nealry half of all whitewomen were so employed. For both black and white women, administrativesupport including clerical jobs accounted for the majority of thesepositions. Black women were underrepresented in both managerial andprofessional specialty occupations. Only 2.5 percent of working blackwomen or white women held precision production, craft, and repair jobs. Hispanic workers Like other worker groups, persons of Hispanic origin shared in theeconomic recovery of the last 2 years, as their jobless rate droppedfrom 15.

3 to 10.3 percent. In fact, the fourth-quarter 1984 figurecompares favorably with the rate posted 2 years into the recovery fromthe 1973-75 recession. The labor market situation for Hispanic workersmore or less paralleled the course of the business cycle, with twoseparate recessionary periods during the 1980’s. The ratio ofHispanic-to-white unemployment rates was 1.7 to 1 in late 1984; thatrelationship has not altered appreciably since the inception of theHispanic unemployment data series more than 10 years ago.

Hispanic men, women, and teenagers all exhibited substantialunemployment rate declines, during the recovery from the latestrecession. Between the fourth quarters of 1982 and 1984, the joblessrate for Hispanic men fell from 12.9 to 8.6 percent.

For women, therate dropped from 13.7 to 9.5 percent, and for teens, unemployment fellfrom 31.6 percent to 21.

9 percent. (These data are not available on aseasonally adjusted basis and hence are not fully comparable with thoseshown for whites and blacks in table 1.) The nearly 10 million working-age persons of Hispanic originresiding in the United States (excluding Puerto Rico) accounted for 5.6percent of the overall population. The largest of the Hispanic ethnicgroups was persons of Mexican origin, with 60 percent of the Hispanictotal. The jobless rate for persons for Mexican origin (at 9.9 percent)was between that of workers of Puerto Rican origin (13.

8 percent) andthose of Cuban origin (7.3 percent). Cuban workers tend to be older andbetter educated than other Hispanics. Employment among Hispanics, which had fallen by about 400,000during the latest recession, has since grown by 700,000. Theiremployment-population ratio reached 58 percent–still shy of the60-percent high posted in early 1979–but nonetheless substantiallyabove the recessionary level of 54 percent.

The jobs Hispanic men hold are, with only a few exceptions, quitesimilar to those of black men. (See table 3.) Like blacks, Hispanicmen in 1984 were overrepresented as machine operators, fabricators, andlaborers, and in service occupations, while their numbers in managerialand professional specialty positions and sales occupations wererelatively small. However, like white men, one-fifth of Hispanic malesheld precision production, craft, and repair jobs. About 9 percent ofHispanic men worked in farming, forestry, and fishing, a category whichaccounts for only about 5 percent of white men and black men. The occupational distribution of Hispanic women is not especiallylike that of either white women or black women.

Slightly more thanone-fourth provided clerical and administrative support and just underone-fourth worked in service occupations. The next largest group ofHispanic female workers was machine operators, fabricators, andlaborers–particularly textile, apparel, and furnishings machineoperators, among whom Hispanics hold a disproportionately large share ofthe jobs. Hispanic women were especially poorly represented in theprofessional specialty category, as well as in executive,administrative, and managerial jobs. IN SUMMARY, it would be accurate to call 1984 a year of strongemployment gains–about 3 million more people and jobs by the end of theyear than were employed a year earlier. However, employment growth didpause in the summer months before advancing again in the last quarter.Whether this moderate growth will continue will be the employment storyfor 1985.


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