By ALAN J. ORTBALS
The unemployment rate in Southwestern Illinois took a nosedive in 2014, according to figures released by the Illinois Department of Employment Security at the end of January.
The Illinois portion of the St. Louis Metropolitan Statistical Area saw a decline from 8.5 percent in December 2013 to just 5.7 percent in December 2014. The IDES report noted that the 5.7 percent figure was the lowest recorded for the area since December 2006.
Dave Stoecklin, executive director of the Madison County employment and training department, however, is not a believer. He points out that to be counted as unemployed, a person has to fit into a relatively narrow niche — they cannot have a job of any type but they must be actively seeking one. Stoecklin said that doesn’t take into account people who are underemployed — working part-time jobs simply because they can’t find full-time positions. But it does count people as employed if they work a minimum of just one hour per week or made at least $20 on a job during the week.
Stoecklin said he thinks the real unemployment figures would be much higher if they only counted as employed those people who were working as much as they want to work and included all the people who were so discouraged by the inability to find a job that they’ve given up looking.
“So I don’t believe that number (5.7 percent),” Stoecklin said. I’ve gotten layoff notices from US Steel and from Olin, for example. US Steel closing its coke plant in Granite City is going to affect 176 folks. I don’t know how many people Sun Coke will hire. I know that they’re going to do an expansion to accommodate US Steel’s needs there, but it’s not going to be 176. With modern technology, there’s just going to be fewer jobs.”
Stoecklin also points to the fact that, according to the same IDES statistics, while the unemployment rate dropped 2.8 percent, there were 700 fewer jobs in Southwestern Illinois at the end of 2014 than there were just 12 months earlier. Where did those jobs go?
Chuck Gascon, an economist with the Federal Reserve Bank of St. Louis, says that the problem lies in how the statistics are created. Gascon explains that there are actually two government surveys that are conducted on a monthly basis. One is the establishment survey in which the U.S. Department of Labor queries businesses regarding the number of people they have employed. That survey is the source of the new job number published each month.
The unemployment rate, on the other hand, comes from a survey of households, in which they ask people if they are employed, looking for work, etc. If they respond that they are not employed and not looking for a job, they are not considered to be in the workforce and do not factor into the unemployment rate.
In a metropolitan area like St. Louis that is divided between two states, people may live in one state and work in the other, Gascon said. “So, for example, somebody who is unemployed and lives in Belleville, Ill., might take a job in St. Louis. That would reduce the unemployment rate in Belleville even though you would not see job growth in Southwestern Illinois. So, that’s the reason that you can get discrepancies between job growth numbers and the unemployment rate. The number of people who are employed in the metro area is actually higher today than it was a year ago. The reason the unemployment rate has dropped is because more people are employed, but that doesn’t necessarily mean that businesses in Southern Illinois are creating those jobs.”
Gascon said that, when you look at the St. Louis metropolitan area, there were actually 17,000 more jobs at the end of 2014 than at the beginning of the year. With a base of 1.3 million jobs in the metro, that’s a 1.3 percent increase, which is about half the national figure, according to Gascon. On the other hand, it was triple the rate of increase in the area from the year before.
He said construction was a particularly strong sector for job growth in the metro area last year.
Area unemployment plummets, but numbers subject to debate
By ALAN J. ORTBALS