by Laura Conaway

I sent Howard Rosen, who took questions from y'all about employment, this query from a listener:

Given the fact that most women were NOT in the workforce during the Great Depression and now most women ARE in the workforce, how do we compare unemployment rates? One could read it that unemployment in the Great Depression was closer to 70 percent (25% of men and say, 90% of women). Or one could read it that unemployment in the Great Depression was more like 12.5%, (25% of men wanted work and couldn't get it, but that's only 12.5% of the population.) Please help me understand just how bad things are now when compared to the Great Depression.

Rosen's reply, after the jump.

 

He writes:

The Bureau of Labor Statistics only began collecting and reporting detailed statistics for employment and unemployment by sex in the 1940s, so I am not able to provide a statistical answer to the question.

People must be working or seeking work in order to be counted as being in the labor force. As the questioner suggests, the majority of women were not working or seeking employment in the 1930s, thus they were not considered to be in the labor force. Someone must be considered to be in the labor force in order to be counted as unemployed. As I mentioned when we spoke, the unemployment rate is the percent of the labor force who are not working and seeking employment.

The bottom line is that the questioner is referring to the ratio of unemployed to population, rather than the ratio or the unemployed to the labor force. Obviously, the unemployment-population ratio is much lower today than it was in the 1930s, since population is so much larger today.

One cannot just adjust the unemployment rate due to the low female labor market participation rate, without taking other effects into account. A higher female labor participation rate in the 1930s would have had significant implications throughout the economy, particularly on economic growth, wages and employment.

Given the difficulties in comparing today's labor market conditions to those which existed during the depression, I refer to the number of unemployed. It has been reported that 13 million people were unemployed in 1933. We have probably already passed that number in the current recession.