20% of Families Don’t Have Even One Employed Person

jobs-help-wanted-ssOn April 25, the Bureau of Labor Statistics (BLS) released its “Employment Characteristics of Families – 2013.” The opening paragraph of that release reads as follows:

“In 2013, 9.6 percent of families included an unemployed person, down from 10.5 percent in 2012, the U.S. Bureau of Labor Statistics reported today. Of the nation’s 80.4 million families, 80.0 percent had at least one employed member in 2013.”

Officially, the percent of families with an unemployed person was 9.6% at the end of 2013.  This compares to a recent 6.3% official unemployment rate for nonfarm payrolls.  What I find most curious, however, is what I will call the unofficial-but-not-to-be-ignored unemployment rate among families.  At 20%, the number of families without one employed member is staggering.  How did I arrive at an unofficial unemployment rate of 20% among families?

According to the second sentence of the quote above, 80.0% of the nation’s 80.4 million families had at least one employed member in 2013.  That means that 20% of the nation’s families had zero employed members.  I would argue that if someone is not employed, then that person is unemployed.  I realize, however, my definition of “unemployed” doesn’t jibe with that of the Bureau of Labor Statistics.  The BLS defines unemployed as follows:

Unemployed. The unemployed are persons who had no employment during the reference week, were available for work at that time, and had made specific efforts to find employment sometime during the 4-week period ending with the reference week. Persons who were waiting to be recalled to a job from which they had been laid off need not be looking for work to be classified as unemployed.”

I will let readers decide for themselves which definition is most suitable.  But regardless of how you define “unemployed,” the following cannot be denied.  If only 80% of families had at least one employed member in 2013, then 20% of families did not have at least one employed member.  The consequences for the economy of having 20% of families without an employed member should not be overlooked.  This means that 20% of families in the United States are depending on some source of income other than that from an employer or from a business.  Two such sources of income might be retirement savings or government transfer payments.

With 16.127 million families not having even one person employed, and an additional 6.205 million families with employed members that don’t work full-time (defined as 35 hours or more per week across all jobs), the percent of families with un- or underemployed members is an incredibly high 27.76%.  In recent weeks, I’ve written articles (here and here) that offer food for thought regarding whether the Fed’s inflationary policies are the right course of action for today’s lackluster economy.

The fact that 20% of this country’s families don’t have even one employed person is yet more food for thought about whether the Fed’s targeting higher consumer prices is good for everyday Americans.  I can imagine many economists arguing that inflationary policies are what will eventually help these individuals find jobs.  I would argue that in order to understand what will help the unemployed find jobs, one must first fully understand why it is the individuals are unemployed in the first place.  Then, those in power should consider how helpful it is for the unemployed to grapple with rising consumer prices, and whether higher consumer prices will increase or decrease demand among those 27.76% of American families with un- or underemployed members.

On a final note, for those interested, here is how “family” is defined in the “Employment Characteristics of Families – 2013”:

Family. A family is a group of two or more persons residing together who are related by birth, marriage, or adoption. The count of families is for “primary” families only, that is, the householder and all other persons related to and residing with the householder. Families are classified either as married-couple families or as families maintained by women or men without spouses. Families include those without children as well as those with children under 18.”

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Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.

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