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25–155 PDF 2006

S. HRG. 109–237

THE EMPLOYMENT SITUATION: OCTOBER 2005

HEARING

BEFORE THE

JOINT ECONOMIC COMMITTEE

CONGRESS OF THE UNITED STATES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

NOVEMBER 4, 2005

Printed for the use of the Joint Economic Committee

(

(II)

JOINT ECONOMIC COMMITTEE

[Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress]

HOUSE OF REPRESENTATIVES

JIM SAXTON, New Jersey, Chairman

PAUL RYAN, Wisconsin

PHIL ENGLISH, Pennsylvania

RON PAUL, Texas

KEVIN BRADY, Texas

THADDEUS G. MCCOTTER, Michigan

CAROLYN B. MALONEY, New York

MAURICE D. HINCHEY, New York

LORETTA SANCHEZ, California

ELIJAH E. CUMMINGS, Maryland

SENATE

ROBERT F. BENNETT, Utah, Vice Chairman

SAM BROWNBACK, Kansas

JOHN E. SUNUNU, New Hampshire

JIM DEMINT, SOUTH CAROLINA

JEFF SESSIONS, Alabama

JOHN CORNYN, Texas

JACK REED, Rhode Island

EDWARD M. KENNEDY, Massachusetts

PAUL S. SARBANES, Maryland

JEFF BINGAMAN, New Mexico

CHRISTOPHER J. FRENZE, Executive Director

CHAD STONE, Minority Staff Director

(III)

C O N T E N T S

OPENING STATEMENT OF MEMBERS

Hon. Jim Saxton, Chairman, a U.S. Representative from the State of New

Jersey .................................................................................................................... 1

Hon. Jack Reed, Ranking Minority Member, a U.S. Senator from the State

of Rhode Island ..................................................................................................... 2

WITNESSES

Statement of Hon. Kathleen P. Utgoff, Commissioner, Bureau of Labor Statistics; accompanied by John S. Greenlees, Associate Commissioner, Offices

of Prices and Living Conditions and John M. Galvin, Associate Commissioner, Employment and Unemployment Statistics .......................................... 3

SUBMISSIONS FOR THE RECORD

Prepared statement of Representative Jim Saxton .............................................. 15

Prepared statement of Senator Jack Reed, Ranking Minority Member ............. 16

Prepared statement of Commissioner Kathleen P. Utgoff, together with Press

Release No. 05–2118, entitled, ‘‘The Employment Situation: October 2005,’’

Bureau of Labor Statistics, Department of Labor ............................................. 17

Response of Commissioner Kathleen P. Utgoff to question of studies on earnings on women and men ...................................................................................... 47

(1)

THE EMPLOYMENT SITUATION:

OCTOBER 2005

FRIDAY, NOVEMBER 4, 2005

CONGRESS OF THE UNITED STATES, JOINT ECONOMIC COMMITTEE, Washington, DC

The Committee met, pursuant to call, at 9:30 a.m., in room 2226,

Rayburn House Office Building, the Honorable Jim Saxton, Chairman of the Committee, presiding.

Representatives present: Representatives Saxton, McCotter,

and Maloney.

Senator present. Senator Reed.

Staff present: Chris Frenze, Robert Keleher, Colleen Healy,

John Kachtik, Brian Higginbotham, Emily Gigena, Chad Stone,

Matt Salomon, and Daphne Clones.

OPENING STATEMENT OF HON. JIM SAXTON, CHAIRMAN,

A U.S. REPRESENTATIVE FROM NEW JERSEY

Representative Saxton. Good morning. It is a pleasure to welcome Commissioner Utgoff before the Committee once again to testify on the employment situation.

The employment figures released today may reflect the indirect

affects of the recent hurricanes. Payroll employment increased by

56,000 in October to a total level of 134.1 million workers. According to the separate household survey, the unemployment rate

edged down to 5.0 percent, a decrease of one tenth of a percentage

point.

Other standard economic indicators reflect the health of the U.S.

economy. Figures released last week indicate that the economy

grew at a 3.8 percent rate in the last quarter of this year, despite

the massive regional destruction wrought by the hurricanes.

So far in 2005, the economy has expanded at a 3.6 percent rate,

roughly in line with the Federal Reserve expectations as well as

the Blue Chip Consensus indicators. Equipment and software investment, which has bolstered the economy since 2003, continues

at a healthy pace. This component of investment responded especially sharply to the incentives contained in the 2003 tax legislation.

Employment has also gained over the period, with 4.2 million

jobs added to business payrolls since May of 2003. The unemployment rate, as I said a minute ago, is at 5 percent. Consumer spending continues to grow. Home ownership has reached record highs.

Household net worth is also at record levels. Productivity growth

continues at a high pace, although higher energy prices have raised

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business costs and imposed hardship on many consumers. These

energy prices have not derailed the expansion.

In summary, the economy has displayed impressive flexibility

and resilience in absorbing many shocks. Monetary policy and tax

incentives for investment have made important contributions in accelerating the expansion in recent years. The most recent release

of Fed minutes indicates that the central bank expects the economic growth to continue through 2006. The Blue Chip Consensus

of private economic forecasters also suggests that the economy will

grow in excess of 3 percent next year, and that employment will

continue to rise.

[The prepared statement of Representative Saxton appears in the

Submissions for the Record on page 15.]

OPENING STATEMENT OF HON. JACK REED, A U.S. SENATOR

FROM RHODE ISLAND

Representative Saxton. I would like to ask our Ranking Member if he would like to make a statement at this point.

Senator Reed. Thank you very much, Chairman Saxton, thank

you, Commissioner and your staff, for joining us this morning. This

hearing gives us the opportunity to continue examining the impact

of the recent hurricanes on the jobs data and to try to discern underlying trends in the labor market. I want to commend Commissioner Utgoff for the hard work her staff at the Bureau of Labor

Statistics has put into producing these statistics under extraordinary circumstances, particularly the hurricane.

As measured by initial claims for unemployment insurance, the

number of people who have lost their jobs due to Hurricanes

Katrina and Rita has now exceeded the half million mark, and

more job losses are expected from Hurricane Wilma. In the coming

months I hope the reconstruction efforts will stimulate a recovery

in jobs throughout the region.

Beyond the hurricane-affected areas, the labor market showed

signs of losing strength. For the economy as a whole, this month’s

BLS report shows that only 50,000 net jobs were created. It appears high gas prices may be squeezing employers as well as consumers.

Even before the hurricanes, the labor market was still feeling the

effects of the most protracted job slump in decades. Cumulative

payroll employment growth has been modest by the standards of

most economic recoveries, and we continue to see evidence of hidden unemployment, with labor force participation and the fraction

of the population with a job still at depressed levels.

The typical worker’s earnings are not keeping up with rising living expenses, which is squeezing family budgets. Gasoline prices

have been high, and home heating costs are expected to be substantially higher this winter than they were last winter. In the

past year, real wages have fallen throughout the earnings distribution, with the largest declines in the bottom half.

I am pleased that President Bush reversed his unwise decision

to suspend the Davis-Bacon Act in the hurricane-ravaged areas and

restored Federal wage protection for workers on Federal contracts.

But the President’s steadfast refusal to support an increase in the

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minimum wage still makes it hard to take seriously his rhetoric

about wanting to lift families out of poverty.

I look forward to the Commissioner’s statements and further discussion of the October employment situation. Thank you.

[The prepared statement of Senator Reed appears in the Submissions for the Record on page 16.]

Representative Saxton. Commissioner Utgoff, we will be

pleased to hear from you at this time. Thank you.

STATEMENT OF KATHLEEN P. UTGOFF, COMMISSIONER, BUREAU OF LABOR STATISTICS, U.S. DEPARTMENT OF LABOR;

ACCOMPANIED BY JOHN M. GALVIN, ASSOCIATE COMMISSIONER FOR EMPLOYMENT AND UNEMPLOYMENT STATISTICS AND JOHN S. GREENLEES, ASSOCIATE COMMISSIONER

FOR PRICES AND LIVING CONDITIONS

Commissioner Utgoff. Thank you very much, Mr. Chairman

and members of the Committee. I appreciate this opportunity to

comment on the labor market data we released this morning. I

would also like to say that I have with me Jack Galvin, who is Associate Commissioner for Employment and Unemployment, and

John Greenlees, who is Associate Commissioner for Prices.

Turning to our data that we released this morning, nonfarm payroll employment was little changed in October, and the jobless rate

was 5.0 percent. Payroll employment was flat in September, minus

8,000. That was a revised figure.

Before discussing the payroll survey data in detail, I would note

that the October estimates were prepared using the same modified

procedures that were introduced in September to better gauge employment developments in areas affected by Hurricane Katrina. We

will continue to evaluate our data collection and estimation procedures and will resume standard survey operations when it is appropriate.

You will recall that in our analysis of the September employment

data, we concluded that the weakness was largely due to the job

loss in areas devastated by Hurricane Katrina. This conclusion was

based on an estimate of the change in payroll employment excluding all of the sample units in the disaster areas. That exercise

showed that job growth outside the disaster area was in line with

the average monthly increase for the Nation as a whole during the

prior year.

We did a similar exercise for October and concluded that the relatively weak increase was not attributable to the areas directly affected by Katrina. Rather, job growth in the remainder of the country appeared to be below trend in October. In addition, the direct

impact of Hurricane Rita on the national employment data for October was judged to be minimal. It is possible, of course, that the

employment growth for the Nation could have been held down by

indirect affects of Hurricane Katrina and Rita, for example, because of their impacts on gas prices. I will note that Hurricane

Wilma made landfall after the October survey reference period, so

we may not see effects of that until next month.

Turning to the national developments by industry, leisure and

hospitality employment edged down in October. This follows a substantial decline in September, at least some of it which was hurriVerDate 03-FEB-2003 11:20 Feb 10, 2006 Jkt 025155 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 D:\JEC\25155.TXT SSC2 PsN: SSC2
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cane-related. Employment in retail trade was basically unchanged

in October after a large decline in September. In addition, there

was little job growth in professional and business services in October. The number of jobs in its temporary help component showed

little movement over the month as well.

A few major industries posted notable gains in October. Employment in the construction industry rose by 33,000 over the month

compared with average growth of about 21,000 per month during

the first 9 months of the year. Some of the October gain reflects

post-hurricane rebuilding and clean-up efforts.

Employment and financial activities continue to increase, rising

by 22,000. About half of this gain occurred in credit intermediation.

Employment, health care, and social assistance also continued to

expand in October.

Elsewhere in the economy, employment in the information industry fell over the month, mostly because of a large decline in motion

picture and sound recording.

Factory employment edged up in October because of the return

of aerospace workers from a strike. The manufacturing workweek

rose by an unusually large amount, four tenths of an hour. Increases in the factory workweek occurred throughout most of the

component industries. Average hourly earnings of private production for nonsupervisory workers on private nonfarm payrolls rose

by $0.08 in October to $16.27 following a 2-cent increase in September. Over the year, average hourly earnings were up by 2.9 percent.

Looking at some of the household survey indicators, the jobless

rate was 5.0 percent in October. The unemployment rate basically

has held steady since May of this year. Both the labor force participation rate and employment-population ratio were little changed in

October.

I would also like to discuss some preliminary findings on the employment status of persons directly affected by Hurricane Katrina.

Shortly after the hurricane struck, Bureau analysts together with

our colleagues at the Census Bureau devised a short series of hurricane-related questions for inclusion in the October Current Population Survey. These questions were designed to identify and solicit

information from survey respondents who were evacuated from

their homes even temporarily because of Hurricane Katrina.

It is important to note that the estimates based on these questions are not representative of all evacuees, but only those who

were interviewed through normal household survey procedures.

Some evacuees reside outside the scope of the survey, such as those

currently living in hotels or shelters.

Based on information collected by CPS-sampled households,

there were 791,000 persons aged 16 and over who had evacuated

from where they were living in August due to Hurricane Katrina.

About 300,000 of these persons had returned to the home from

which they evacuated, and the remaining 500,000 had not returned

to their August residences.

Of the 800,000 evacuees, 55.7 percent were in the labor force in

October, and their unemployment rate was 24.5 percent. The jobless rate among those who have not been able to return home was

substantially higher than the rate for those who returned to their

5

August place of residence. Again, these figures do not reflect the

situation of persons still residing in shelters, hotels or other places

out of the scope of the household survey.

Even with these limitations we believe that these data provide

useful information about the employment status of those persons

affected by Hurricane Katrina. As people make the transition to

more permanent housing, the estimates may be more representative of the situation of all evacuees. We plan to keep these special

Katrina-related questions in the survey at least through January

2006.

Summarizing labor market developments for October, nonfarm

payroll employment was little changed over the month, and the unemployment rate was 5.0 percent.

My colleagues and I will now be glad to address your questions.

Representative Saxton. Thank you, Commissioner, for your

very concise and informative statement.

[The prepared statement of Ms. Utgoff appears in the Submissions for the Record on page 17.]

Representative Saxton. Commissioner, in your statement you

have a lot to say about the weather events that occurred, namely

Hurricane Katrina and Rita, which were back-to-back storms at the

end of August and the beginning of September.

In looking at the employment numbers from the month of September and now, of course, the month of October, we see a much

different trend than we had been seeing for the months in the first

half of the year. In January, we had job growth of about 124,000

jobs; in February, 300,000 jobs; in March, 122,000; in April,

292,000; and that trend continued June, July and August. The

numbers were 175,000, 277,000 new jobs, and in August, 211,000

new jobs.

When we get to September and see the effects of, for some reason—and I assume that you have talked about weather events significantly because you think that had something to do with it—all

of a sudden the September numbers were down to a negative

35,000, which have just been revised back up to a negative 8,000,

and this month’s numbers were also on the weak side.

Can you venture some opinion, venture some reasoning that

would support the notion that the hurricanes have had a lot to do

with this?

Commissioner Utgoff. We have come to the conclusion that in

October, Hurricane Katrina, which is the hurricane that has most

affected employment, did not cause additional losses, that the weak

employment situation is throughout the country. I think it is fair

to speculate that things such as higher gas prices have influenced

people’s behavior in a way that has dampened the employment situation.

The employment in discount stores and supercenters was weak,

as was employment in leisure and hospitality. These are the kinds

of places where people are not spending their money because they

may be spending their money on higher gas prices.

Representative Saxton. Not spending because they are spending it on higher gas prices, that decision that an individual or a

family has to make about where they are going to spend their dollars.

6

Commissioner Utgoff. Yes.

Representative Saxton. In addition to that, wouldn’t it discourage people to see $3 on the pump? So that affects people’s behavior,

and that negative behavior may be an indirect result of the hurricane that we see the resulting weakening of the numbers, which

occurred simultaneous with the occurrence of these weather events.

Commissioner Utgoff. Yes, yes. There are many strong economic numbers that have come out this month, but the employment numbers reflect an economy that is not growing as rapidly as

it has been before.

Representative Saxton. Are there any other indicators in the

data that you have seen that would say that there are other factors

at play here?

Commissioner Utgoff. I would like to point out that manufacturing showed a small gain because of return from a strike, but

there was also a 0.4 percent gain in hours in the manufacturing

industry spread throughout the entire industry, which is often a

sign that employers are on the cusp of bringing back additional

people. First they add hours, and then they add additional people.

So that may be one positive sign, for this month for employment

to be stronger next month. We also have the lingering effect of

Hurricane Rita and Wilma, which really did not show up this

month in the data because of the timing of the survey and may

show up in later months.

Representative Saxton. So the results of Rita are not in this

survey?

Commissioner Utgoff. They are, but we had good response

rates from employers who were affected by the hurricane. Next

month there may be rebuilding, there may be other activities that

go on that will affect the employment situation.

Representative Saxton. Can you shed any light for us on the

difficulties that may have resulted from the devastating storms

that occurred in having an effect on your ability to collect and analyze this work-related data?

Commissioner Utgoff. The last 2 months have shown a real effort by dedicated public servants to get out the best numbers possible so that we could judge what was happening in the economy.

The Census Bureau made every opportunity to get to every household that they could. There were two parishes that they were not

able to get into because they were completely evacuated. They got

back into those parishes this month. There was a higher response

rate. That is for the household survey.

In the payroll survey, Herculean efforts were made to get responses from people that when normally they would do things like

many people who do touchtone entry, where they pick up the phone

and they just push—call a number and push a few buttons, and

that is their response, we called all those people individually. People worked long hours to contact virtually every person they could

in the hurricane-affected areas.

Jack Galvin, Associate Commissioner for Employment.

Mr. Galvin. That covers it pretty well. We also had cases of establishment survey respondents seeking out different numbers to

reach us and report their information via touchtone data entry.

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Our 1–800 numbers were down for a while, but these employers

thought it important to report their numbers.

Representative Saxton. I see. The lack of communication that

resulted in the couple of weeks immediately after Katrina seemed

to have been a very significant impediment to me in regard to your

ability to collect data. I had a friend who still lives in New Orleans,

who ended up in Baton Rouge, and I tried to call him for 2 weeks

with no luck, and he was in Baton Rouge. It must have posed some

real challenges.

Commissioner Utgoff. We didn’t change the definitions of employment for the payroll survey, but as we discussed last month,

we did change the statistical analysis of those numbers. For your

friend who may have owned a business, if he didn’t report, in normal months we would have assumed that in first closing if you

didn’t report, in the first period you didn’t report, that you looked

like other people in your class, size, industry, area, and we didn’t

assume that this time. We assumed that people who reported zero

employment did have zero employment. We went through all of our

procedures for estimating employment and changed many of them.

Representative Saxton. Yesterday Chairman Greenspan was

here to testify before the Joint Economic Committee, and he was

pleased to reflect on the 3.8 percent growth that we saw in the last

quarter; he was pleased to project that growth will continue in the

next year or so at a rate, GDP rate, above 3 percent. He was

pleased to talk about low long-term interest rates. He was pleased

to see that in spite of Katrina and Rita and Wilma, and in spite

of uncertainties created by the Gulf War, by the war on terror, and

in spite of the interest rate increases that the Fed has deemed necessary, that he expects the economy to continue to grow.

Do you see anything in the numbers that would speak contrary

to that view?

Commissioner Utgoff. The numbers that we are putting out,

many of them are very strong. The only cause for concern is this

month’s employment situation is relatively weak compared to the

very strong employment growth that we have been seeing earlier.

Representative Saxton. In that regard previous Commissioners always have warned us about reading too much into the

monthly data release. Would you say that this month’s data is statistically significant, or is it something that we need to wait and

see as we move forward?

Commissioner Utgoff. I will say the same thing as every other

Commissioner: One month data is not something that you want to

make a significant judgment on.

Representative Saxton. We have got the weather events that

could have a temporary affect here, and we know from past experience that the statistical significance of 1 month’s numbers are not

always particularly meaningful.

Commissioner Utgoff. Yes.

Representative Saxton. Thank you, Commissioner.

Mr. Reed; I’m sorry, Senator Reed. My friend.

Senator Reed. Jack.

Thank you, Commissioner, and thank you, Mr. Chairman.

8

We were seeing what appeared to be sustained job growth over

the last several months, but I understand the August number was

revised down from the initial report; is that correct?

Commissioner Utgoff. Yes, that is correct.

Senator Reed. The initial report for August jobs was?

Do we recall a revised number?

Commissioner Utgoff. Just a moment.

Mr. Galvin. When we reported August back in September, we

reported it at 169-, then in our second closing last month we revised it up to 211-, and now we are reporting 148-.

Senator Reed. We went from 211- to 148-, and that was before

Katrina and Rita and Wilma; is that correct, before the hurricanes?

Commissioner Utgoff. Yes, the August number would not have

been affected by the hurricanes.

Senator Reed. So what we were seeing was growth, and something suddenly might have happened in August to cause a revision

downward. Then we have this month’s report, which I thought was

interesting, because in response to the Chairman’s question, you

point out you did not really see the primary affects of the hurricane

because the weakness was nationwide; is that a fair statement?

Commissioner Utgoff. Yes.

Senator Reed. And so, we saw revised numbers downward in

August, we had a hurricane, and now we are seeing very, I think

being polite, modest growth in jobs in this month, which is nationwide and not targeted to the hurricane effects.

The other aspect here I think is interesting is labor force participation. That seems to be consistently poor. In fact, I think there

was a slight increase—I should say a slight decrease in labor force

participation in October?

Commissioner Utgoff. Down one tenth of a percent.

Senator Reed. Down a tenth. Not statistically significant, but

indicating there is a huge reservoir of people who are not counted

in the unemployment rolls because they are not actively seeking

work, and that seems to be stable at high levels. I guess historically in terms of a recovery from a recession, these levels of workforce participation seem to be high; is that accurate, too?

Commissioner Utgoff. The decrease in labor force participation

that occurred with the recession that started in 2000 was significant and has not returned to prerecession levels.

Senator Reed. I think that is a significant issue when it comes

to the truth of the situation of American families across the country.

We have been talking about payroll growth and job growth, et

cetera, but unemployment claims for this month seem to be growing also; is that fair?

Commissioner Utgoff. I believe that the initial claims were——

Mr. Galvin. Overall initial claims declined, 12,000.

Senator Reed. How about in terms of, again, talking in terms

of the hurricanes; are those claims still coming out of the hurricane

areas?

Commissioner Utgoff. Yes.

Mr. Galvin. ETA has reported that the number has gone above

500,000 of initial claims related to the hurricanes.

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Senator Reed. What is your expectation with respect to additional claims coming out of those regions? Let me step back for a

second. Is there a delay because people have difficulty because they

have been uprooted in filing their claims?

Commissioner Utgoff. There has been a concerted effort to

have additional places to file unemployment insurance in all the

areas that have been affected and to make sure that the places

where evacuees have gone in large numbers have the ability to file

for both employment insurance and disaster unemployment assistance.

Senator Reed. Do you expect a significant number of people

have not yet filed?

Commissioner Utgoff. I can’t opine on that.

Senator Reed. Let me turn to a final topic. One of the things

that is both interesting and in a sense disturbing is we have an increase in productivity which is substantial, yet wages seem to be

not reflecting those increases in productivity. Productivity went up,

wages seem still to be rather anemic, and in real terms, wages are

falling. If that is a trend that is going to continue, that has ominous implications for the economy. People are working harder and

harder, and the overall economy is more productive, and yet they

are not receiving any increase in wages.

How does that work for most of the people that work in this

country? Do you have a comment on that dilemma?

Commissioner Utgoff. Over the long run we normally see that

productivity and wages move in the same direction; not always, but

normally. That has not happened in the last few years. Productivity has increased faster than wages and compensation.

Senator Reed. That might be the long run, but that is—2 years

of data is a significant amount of data, which suggests that this is

a huge problem, because I think the premise that we all have in

our market economy is that increased productivity will be shared

in some sense with increased wages. If there is a disconnect between productivity increases and wage increases, that is, again, an

ominous development in the country and I think something we

have to be terribly concerned about. Thank you.

Representative Saxton. Mr. McCotter.

Representative McCotter. Thank you for being here.

Along similar lines, I am just curious if we have ever had a

study, because I come from Michigan. Just so you know, we hear

a lot in Michigan about the outsourcing of jobs, jobs lost. One question I can’t seem to get answered because I don’t know if anybody

keeps track of it, and if you don’t, nobody does, is what jobs are

lost overseas as opposed to what jobs are lost to other States. Is

there anywhere I could go find that?

Commissioner Utgoff. We have a survey that addresses part of

that for large layoffs where there have been 50 or more people laid

off in a 5-week period and the layoff lasts more than a month. We

call back the company and ask where the movement of jobs has

been, and it is far more common for job loss to be the result of

movement of a company’s activities to another State or another

area than it is for it to be moving out of the country. So that

outsourcing—there is outsourcing, but it represents a relatively

small fraction of job loss due to the movement of work either withVerDate 03-FEB-2003 11:20 Feb 10, 2006 Jkt 025155 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 D:\JEC\25155.TXT SSC2 PsN: SSC2
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in the company or to a different company and within the United

States and outside the United States.

Representative McCotter. Where can I get that?

Commissioner Utgoff. We will be happy to send you more material. We have both quarterly reports and a year-end report that

talks about that.

Representative McCotter. Can I get the latest year-end report

and the latest quarterly?

Commissioner Utgoff. Yes.

Representative McCotter. Along the lines of what the Senator

talked about, the increase in productivity and the stagnation of

wages to match that rise, is there any analysis of how the flood

tide of globalization is causing that? It seems to me that one of the

problems would be that if you have to compete globally with any

nation, not simply developed democracies, what happens is you will

try to do everything you can to be more productive, and one of the

things that you can’t because it increases prices of your products

would be to reward your employees for their increased productivity.

Is there anywhere to find a correlation between those two? Because

it is an ominous trend to find people working harder because they

are forced to compete globally with any country which may or may

not have similar protections for their people and find out at the end

of the day that is merely to tread water and to survive economically, not to grow and prosper and pursue your American dream.

Is there anywhere that can be found?

Commissioner Utgoff. We have data on the increase in wages

and compensation benefits for the people over the 2-year period

that you are talking about, and for people who do not have significant education, wages have been stagnant or falling. It is a stark

example of why we really need to have a good educational and

training system to prevent wage stagnation in a world of global

competition.

Representative McCotter. Relative to Michigan specifically

from what you were just saying, then, is that it is probably statistically borne out that the people who are hurt the most will be in

such areas as manufacturing, it would seem to me, because the history has been that you do not need an advanced degree although

the work is very technical to go into a very well-paying job, to be

able to produce, and then what we are seeing now is that that no

longer is a career path, the statistics bearing out the people who

get the degrees generally don’t go work at Ford on the assembly

line, or they don’t work in the manufacturing area. Are we seeing

then from the statistics a special problem within the manufacturing sector because of this trend?

Commissioner Utgoff. The manufacturing executives have told

the Department of Labor that they have help wanted signs up not

for assembly-line workers, but for workers who have more training

and more education; that manufacturing has become much more of

a high-tech industry where productivity has reduced the need for

workers with limited education.

Representative McCotter. If you would indulge me one last

question. Are they also telling you that they are able to take the

people who are engaged in the manufacturing sector currently and

then bring them into those jobs?

11

Commissioner Utgoff. They are all very interested in training

programs either on their own or with the help of the Department

of Labor and the Department of Education to make sure that people graduate from high school with the skills that they need to

enter the high-tech manufacturing workforce, because that is

where manufacturing is headed, and to retrain their workers to

take new jobs.

Representative McCotter. The high tech.

Commissioner Utgoff. In higher tech.

Representative Saxton. Good questions. Thank you.

Mrs. Maloney.

Representative Maloney. Welcome.

Commissioner Utgoff. Thank you.

Representative Maloney. What fraction of the population actually has a job?

Commissioner Utgoff. Let me get to the numbers.

Representative Maloney. If you want you can get back to me

later.

Commissioner Utgoff. No, no, no. We have all these numbers.

The employment to population ratio in October 2005 was 62.9

percent.

Representative Maloney. What would the unemployment rate

be if you included people who want to work but have given up?

They are not officially in the labor force, they have been turned

down 10 times, and are not actively looking? What would the unemployment rate be if you included those people?

Commissioner Utgoff. In October 2005, our broadest measure

of labor utilization, U6, was 8.7 percent.

Representative Maloney. What would the unemployment rate

be if you included people working part time for economic reasons?

Commissioner Utgoff. U6 includes those working part time for

economic reasons.

Representative Maloney. This also includes people who would

like to work but have given up?

Commissioner Utgoff. It includes discouraged workers.

Representative Maloney. I would argue the real unemployment rate is 8.7 percent.

Anyway, I would like to ask you to clarify for me—first of all, I

want to go back to the numbers that you gave us. You said that

there was a net gain of 56,000 jobs in October and a loss of 8,000

jobs in the revised September reading. How many of those net gain

jobs at 56,000 are filled by women, and how many are filled by

men? Likewise, I think it is important to see who it is that is losing

a job. How many of the net loss of 8,000 jobs in the revised reading

had been filled by women, and how many had been filled by men?

Commissioner Utgoff. The number that you refer to, 56,000, is

net. They are both people who have gotten jobs and people who

have lost jobs.

Representative Maloney. How many of them were women, and

how many were men?

Commissioner Utgoff. We don’t have that statistic.

Representative Maloney. Did you at one time keep that statistic?

Commissioner Utgoff. Yes, we did.

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Representative Maloney. I find that an important statistic to

have. In fact, Senator Kennedy with the help of Senator Reed, proposed an amendment to put it back into the payroll data, and I

would just like to clarify why the Bureau has discontinued the

women workers series on the current employment statistic survey.

Why did you discontinue it? It is half the population. That is an

important number to study.

Commissioner Utgoff. The statistic that you are talking about

would not be available to me to report to you for October

because——

Representative Maloney. That wasn’t my question. My question is why did you stop—why did you discontinue keeping that

statistic.

Commissioner Utgoff. The decision was made based on the fact

that the burden on employers for collecting that statistic was not

worth the amount of use that statistic was getting. We know that

because we can measure the hits on the Web site. We know that

in the last 10 years that 6 articles have been written that partially

use that data, and we have calculated that if it takes employers a

minute apiece to answer that question, and you use a relatively low

bookkeeper salary, that the cost of those 6 articles is almost $3.5

million apiece.

Representative Maloney. I would like to request a copy of

those six articles. According to the research that we looked at, that

question has an 86 percent response rate. It is the second highest

responded-to question of any on the survey; the only one being

higher is how many employees do you have. The only business organizations that responded supported collecting the data. There

was no business that went on record being opposed to collecting the

data. They all came out in supporting it. Researchers use this data.

The Federal Reserve Bank of New York has used it, and many others use it.

So, I cannot understand why in the world you have removed it.

There is no substitute. Businesses don’t seem to have a problem

with it since they all responded to the comment period at OMB, in

the original comment period, in support of it. Researchers use it,

and there seems to be overwhelming support for it. The comments

submitted to BLS ran 9 to 1 in favor of it, and I believe the Senate

just voted overwhelmingly, in a bipartisan way I might add, to continue collecting it. I must say I have signed numerous letters in a

bipartisan way in support of it, and I have spoken to professional

researchers who tell me that they use it, that it is valuable. I can’t

understand why getting the number of women employed is not important.

Now in your breakdown of these numbers by industry, how many

industries do you break it down by?

Mr. Galvin. Over 1,000 industries.

Representative Maloney. Eight hundred industries.

Mr. Galvin. That is the national numbers. The women’s workers

numbers were broken down to a high level of industry detail of

about 40 high-level sectors.

Representative Maloney. Forty high-level sectors. I would like

to look at how you collected it in the past. I might say that I went

to your Web site in the past, and I have never seen it mentioned,

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it is never in your press releases. If people don’t know about it,

then they won’t be using it.

I would just like to ask you; it was my understanding that the

New York Federal Reserve testified to the usefulness of this data;

is that correct, about the New York Federal Reserve Bank?

Commissioner Utgoff. There was a written response from the

Federal Reserve bank that they had used the data.

Representative Maloney. If they are using it, I think we need

to give them the data they need.

Does collecting this data impose a large burden on BLS, or is

there some compelling reason why we should not continue to collect

this data since the response was 9 to 1 in support of continuing it?

Every business that wrote in wrote in in support of it.

Commissioner Utgoff. First, let me make an important point.

The data on industry by women is available in the Current Population Survey. We are making that more useful to our users by producing a longer-time series. It is just the nature of when you ask

an employer do you want to put this data down, when they spend

12 minutes a month—excuse me, 12 minutes a year responding to

it, they are not going to write a letter.

It is our job as a statistical agency to make the judgment that

12 minutes a month for 400,000 employers is a very large burden

compared with 6 articles in 10 years.

Representative Maloney. Commissioner, if no one writes in in

opposition, why are you even having a comment period if you are

going to make a decision not based on the comments? Nine to one

the comments were in support of continuing the data, and researchers have told me, that the other data that you are using is

not the same. They have told me that the CPS data comes from a

different source, individuals rather than employers, and has a

smaller sample size. BLS states that—you have stated that it is

less reliable for month-to-month employment changes. The Federal

Reserve uses this data. I would respectfully urge you to continue

collecting it.

Now, if Congress passes a bill forcing you to collect it, would you

collect it?

Commissioner Utgoff. Yes.

Representative Maloney. I would urge in a bipartisan way

that we put in such a bill. I know that Senator Kennedy and likeminded people will be working in the conference committee to keep

the legislation in, and, quite frankly, I am absolutely appalled that

of all the things to cut out, it is keeping data on employed women.

I think that women’s data should be kept, and I urge you on your

own to make this correction.

Commissioner Utgoff. We produce voluminous data on women;

earnings, use of their time, and when they are displaced from the

workforce. We cover every aspect of women in the labor force.

Representative Maloney. Maybe I should wait until the second

round.

Representative Saxton. Actually, Senator Reed and I have tentatively agreed not to have a second round.

Representative Maloney. May I have a follow-up question.

Representative Saxton. The gentlelady has made her point,

and you are rapidly approaching the 10-minute—your red light has

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been on for 5 minutes. If you would ask another question and conclude, I would appreciate it.

Senator Reed. I have one more question.

Representative Maloney. What is the Bureau doing to study

the wage gap specifically, and what are you doing to determine

how much of the wage gap is attributed to discrimination by employer, and are you designing any surveys on this issue, or do you

have any surveys on this issue?

Commissioner Utgoff. We just produced a lengthy report, I will

send everybody on the Committee a copy, on highlights of women’s

earnings. We publish earnings by age, race, all kinds of groups, to

compare them to men so that we know in what industries women

are making progress relative to men, in what educational groups

women are making progress relative to men, occupations. This is

a 40-page report that was just recently produced and will continue

to be produced.

The data that you say are being dropped were never used by the

BLS to evaluate women’s earnings and the progress of their earnings and are not suitable for doing that.

We will continue to be a major source of information on women

in the workforce and how women in the workforce are doing relative to men by numerous categories.

Representative Maloney. I thank you for your testimony, and

you may not be using the information, but other researchers, including the Federal Reserve, are using the information on the number of women employed, or losing jobs, and that is valuable information and I would respectfully urge BLS to place that back in

their column of items.

Representative Saxton. Commissioner, I would like to thank

you for being here with us this morning. We appreciate it very

much. We always enjoy these sessions, but we enjoy them even

more when you bring us good news. Hopefully next month we will

have some good news.

Commissioner Utgoff. We have had a spate of hurricanes, and

hopefully that will die down. And no snow storms next month.

Representative Saxton. Thank you.

[Whereupon, at 10:22 a.m., the Committee was adjourned.]

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