Transcript: “Unemployment Data…Explained!” with Matt Damschroder. Governor Jon Husted – S1 E2
Ohio Department of Job and Family Services Director Matt Damschroder joins the podcast to explain how we arrive at the Unemployment percentage number, the difference between that number and the actual number of unemployment claims, and what programs are available to help employers and job seekers alike.
CLINT: Welcome to the Workforce Pulse podcast. My name is Clint Knight. I’m the Director of Workforce Development at the Richland Area Chamber & Economic Development. We’re going to bring in a variety of guests to talk about the state of the workforce in mid-Ohio and how it relates to the state. We’re going to present opportunities, ideas and resources to grow the workforce, talk about continuing to educate our workforce and ways that we can work together. Made possible by the Area 10 Workforce Development Board, this is the Workforce Pulse.
OK, we are here with Director of State of Ohio Department of Job and Family Services, Matt Damschroder. Director Damschroder, we appreciate you taking the time to come on the Workforce Pulse podcast here and give us a little bit of education about some different aspects of unemployment, workforce participation, and opportunities that our employers may have. We appreciate your time today.
DIRECTOR DAMSCHRODER: It’s my pleasure. I’m excited to be here and excited about the work that you guys are doing with the Chamber, and in Mansfield and Richland County. So happy to be here. Unemployment and the numbers that get reported around it every month, it can sometimes be confusing, so glad to be here today and help clarify some of the misunderstandings or misconceptions about the numbers, what they mean, and how we pull them all together.
CLINT: I’m really looking forward to hearing that. There’s been a lot of ups and downs over the last two years, as you are well aware. You have been in the middle of it with the numbers and with the data. I’m looking forward to talking through it, so let’s get started with the first question here.
So, employers have always had an interest in the unemployment number and how it’s trending. Over the last two years, unemployment percentages across the nation came to be one of the hottest topics for everyone. I want to first talk about how we get that percentage number. Can you tell us how the data is captured to show the percentage of the population that is unemployed?
DIRECTOR DAMSCHRODER: Sure, so the first thing I’ll start with by saying when we talk about the unemployment number, that is a statistical measure that the Department of Labor uses and that we participate with them in creating, but that is different from the number of people who are on unemployment, which is the unemployment insurance program for individuals, and we can talk more about that.
At a starting point, unemployment number different than unemployment benefit. So, when we talk about the unemployment rate, we’re talking about the number of people who are in the workforce, but are not currently employed.
So, for instance, right now, 4.1% is our unemployment rate for last month, and that means 4.1% of the people that are in the labor force are unemployed. It’s important to remember that the labor force consists of both employed and unemployed people, so an unemployed person is someone who has no job and is able, available and actively searching for work: the 3 A’s.
So, those who are not searching for work are not part of the labor force, and the labor force also does not include military and folks who are in prison. So, as I mentioned, there’s this misconception that everyone who is unemployed is receiving unemployment benefits, but the truth is, not everyone who is unemployment is eligible for unemployment. And not everybody who’s potentially eligible applies for unemployment. So, when we’re talking about that 4.1%, we aren’t talking about benefits, we’re simply identifying who is working and who isn’t working, but is actively looking for a job.
We have a department at ODJFS whose sole purpose is to collect labor market activity in Ohio, works closely with the Department of Labor on these things and that’s our Ohio Bureau of Labor Market Information, where they publish and analyze data on the labor workforce, industries, and occupations. So, when we have those monthly numbers that come out from the US Department of Labor, our team then is collecting information, breaking that up on a county basis, and making that information usable for businesses, for government agencies, area workforces Chambers of Commerce, and the like.
CLINT: So that unemployment number, the 4.1%, is the state number for last month. That is a statistical number, you reach that number through surveys. How do you get to that percentage number?
DIRECTOR DAMSCHRODER: Yep, so that is all survey based. The US Department of Labor has a program where they survey in some different cohorts. Some people they track over time. Sometimes it’s just kind of a first-time response that gets aggregated to create each state’s unemployment rate. Again, the key is a person who does not have a job, is able, available, and actively searching for work.
For instance, a student who’s in college and is not looking for a job, not able to take a job because they’re a full-time student choosing to not be in the labor force, that would not get reported as unemployment.
Similarly, my dad, who is retired and not looking for work at this point, would not be part of the labor force and so therefore would not be part of the unemployment rate.
The key when you hear that number every month, both from a national number and a state number, is the 3 A’s: able, available, and actively searching for work.
CLINT: So you mentioned students, retired military, and incarcerated individuals are not included in that survey population.
DIRECTOR DAMSCHRODER: So, they might get a call, or get a mailer from DOL, but unless they are able, available, and actively searching for work, they would not be included in that number when DOL compiles it.
CLINT: So, we have the state percentage and then we have county percentages as well. Are those county percentages calculated exactly the same way?
DIRECTOR DAMSCHRODER: Yep, exactly, so the county numbers are just kind of the sample of each county’s response for the state data. So, for Richland County, for instance, right now the Richland County numbers are 4.5%, which is down from 5.3% a year ago. In terms of raw data behind the percentages, there are 900 fewer people employed now in Richland County than there were in February of 2020, and the labor force overall shrunk by 1300 in that same time period.
CLINT: And that information, that raw data is again collected through the same types of surveys and phone calls.
DIRECTOR DAMSCHRODER: That’s correct. Now the employment, so when you get into some of the more, not so much the unemployment rate information, but some of the raw data in terms of actual employed individuals by industry, that’s actually surveys that come from employers. So, some of your members may from time to time, you know you get surveys from DOL or ODJFS asking for employment information. But now in kind of a more modern age, a lot of that data is collected by the third-party administrators and payroll companies and then reported to DOL. So, on the actual hard numbers side of employment numbers, especially by industry, those are really solid. They’re not really surveys, in the sense of a phone poll kind of thing, it’s actual payroll data from employers.
CLINT: OK, so you have the combination of the two and that seems like it gives you a solid number, a very accurate portrayal of what’s actually going on.
DIRECTOR DAMSCHRODER: Yeah, and again, you know it’s important to remember, just like anything, these are really good at showing trends over time. One of the things that we always talk about is what one particular month’s number is not nearly as important as what are the combination of those numbers over time showing? Are we going up, or are we going down? There might be a blip one particular month because of a certain factor. Maybe a factory closes down, or there’s a supply chain interruption.
Those kinds of things that we’ve been seeing more recently. Those can cause blips, and so it’s important sometimes to not focus on just one particular month’s number, but the trend of all those months over time, which for Ohio, as all states, saw huge increases that were specific to the pandemic, but shows that Ohio and the country as a whole are moving very swiftly in the direction of full employment.
CLINT: What is the difference between the seasonally adjusted unemployment number and the not seasonally adjusted unemployment number?
DIRECTOR DAMSCHRODER: Yeah, great question and this is one that causes a lot of confusion as well. So, when you see an unemployment number that is not seasonally adjusted, this reflects the actual changes that have taken place. And this can help people who use these numbers to understand how economic activity has affected the year-to-year changes in the unemployment and the labor force.
So, for instance, if you wanted to see how retail seasonal hiring has changed over recent years, the nonseasonal adjusted would be your best approach. So, when you have an unemployment number that is seasonally adjusted, you can spot the trends in the data more easily, so think month-to-month instead of year-over-year.
With seasonal adjustment, you’re essentially removing the fluctuations in unemployment trends in the labor force that normally occur with seasonal changes, you’re taking out the factors that are expected in order to see what trends rise at the top.
So for instance, if we look over the course of a year, we would know that in the summer there’s always a little bit of a blip, as especially folks in the manufacturing sector, close down sometimes for a couple of weeks for equipment maintenance or software upgrades, or those kinds of things. So, when we get to July, we would expect to see a a blip, and so we don’t have kind of a freak out moment about those weeks where we have new claims.
So seasonal adjustment kind of smooths that part out that allows us to see other things that we wouldn’t expect to see, and those are the kinds of things that economists especially like to drill into to figure out what’s happening in the background in the overall economy that creates those things that we wouldn’t expect to see.
CLINT: I can imagine that the difference between those two was a bit difficult to calculate over the last 18 months or so.
DIRECTOR DAMSCHRODER: Yeah, that’s exactly right and so there’s not really a good way when you have something on a national scale, like a pandemic that affected all the states essentially the same from an unemployment and economy standpoint. It’s kind of hard to normalize that kind of number out, but because it happens to everybody, there are ways to adjust for it. And we’ll see them over time.
But again, you know those kinds of things are why we kind of normalize or adjust the numbers so you can see the big things that are having some kind of effect on employment and the labor force that you wouldn’t otherwise expect to see.
CLINT: So, we talked about the unemployment percentage there. You also published a number, it’s hard data, the number of people who are actually drawing unemployment claim benefits, correct?
DIRECTOR DAMSCHRODER: Correct, so every week we publish the number of individuals who filed a first-time claim for unemployment benefits and then also the number of people who are filing a continued claim. So, when you look at the first-time claims, or the first-time jobless claims, which is sometimes how it’s referred to.
It’s important to remember that anybody can start an initial jobless claim, whether you’re eligible for unemployment insurance or not, and because this is essentially kind of an insurance policy that you have to be eligible based on number of weeks working in a job, the amount of money you’ve earned, and all those kinds of different factors, there’s a complicated adjudication process that we do based on the information the claimant gives us and that we verify with the former employer.
So, just because a person starts to claim, doesn’t mean they will ultimately get benefits. Down the line, it will be determined whether the claim is valid, or whether we have to wait for more information. And the claimant can also withdraw their claim any time they start the process. So, sometimes these changes in the number of initial claims filed have some seasonal or economic-related significance.
Other times, the factors are really just procedural. Really an important trend to watch is the weekly continued claims, because that really kind of shows people who have filed and who are continuing to look for work and kind of being on the sidelines, so to speak, of the economy, so it’s those continuing claims that are important. Similar to the conversation we had around the seasonally adjusted and not, those first-time jobless claims are important, but there can sometimes be a lot of seasonal factors behind it.
So, for instance, we would expect that after the Christmas holiday season as retailers start to lay off part-time employees that they hired to help with the Christmas season, we would expect jobless claims to increase after that. When we get into the winter season generally, and carpenters, roofers, landscapers, and those kinds of folks who are seasonally unemployed would file, so we would expect to see some of those things trend around those first-time jobless claims on a weekly basis.
But you know, for our purposes, one of the things that I think is very important to follow is that weekly continued claims number to see, on the whole, do we have more or fewer people who are still claiming unemployment?
CLINT: So, those are both on that weekly report. The initial claims means those are new applications, not necessarily awarded unemployment benefits, correct?
DIRECTOR DAMSCHRODER: That’s correct, so those first-time jobless claims are individuals who started a claim, they may be approved down the road, they may be rejected down the road. It may be a while before we determine, as we’ve seen over the last couple of years, some of them could be fraudulent claims, and so it’s just the the top-line data of who started the process and ultimately down the road or the adjudication process will determine whether not an actual claim gets paid to that individual.
CLINT: So it’s mid-April 2022 now and we saw a climb in initial claims early in April, but through the middle of March, so go back four weeks, it started to decline toward the end, the continued claim, sorry, started to decline in mid-March and declined all the way to the beginning of April, but there’s another climb in those initial claims, so that doesn’t mean necessarily that we’re about to go back up. It just means that we saw a bump in the initial claims here early spring.
DIRECTOR DAMSCHRODER: Yep, that’s exactly right. And again, just because we see a bump in in those initial claims being filed, doesn’t even mean that those will result in claims being paid out. It’s just a process was started.
CLINT: So, that’s a lot of information to unpack. I appreciate you going through all of that and I think that’s a lot of education that’s important when we’re looking at these numbers, how they fluctuate and what they actually mean. You know, for example, the seasonally adjusted and the not seasonally adjusted. Those are details that are crucial to understanding how unemployment is working right now, especially with the level of importance that it is to our employers and to our economic vitality. And how do we, bob and weave as we grow out of this situation and move forward?
The next topic I want to talk to you about is the fact that Ohio Department of Jobs and Family Services doesn’t just do unemployment. There are a whole lot of other factors and programs and opportunities that are going on with ODJFS centers and there are a variety of services there. I want to talk about a couple of programs that could benefit employers in this current situation. Specifically, the incumbent worker training and the on-the-job training, and then any other programs that you’d like to share with us that you think could be specifically beneficial.
Can you talk a little bit about how the incumbent worker training could help us? When we look at retaining our employees, keeping the employees that we have.
DIRECTOR DAMSCHRODER: Yep, the first thing I’ll say before we dive into that is, especially when it comes to our employment services component of what we do at the Ohio Department of Job and Family Services, we lean very heavily on our county and local area partners who are really the big percentage of the service delivery that we have.
A lot of these are Federal Programs that are federally funded, flow through us and then down to the counties. So in each of Ohio’s 88 counties, there is an Ohio Means Jobs center. There are Area Workforce Boards across the state that support those, and then of course the OhioMeansJobs.com website.
So, the way that most of your members and local employers would interact with the Ohio Department of Job and Family Services for employment support will be through those county programs, either the county department of job and family services or the local Ohio Means Jobs Center.
They all do a tremendous job on the Fob and Family Services side of connecting individuals on public assistance with job training, with other job skills, and help in some cases, finding a job with the goal of ultimately of getting off of benefits, and then on the workforce side, as you mentioned, all kinds of programs not only for individuals, any individual in Ohio who’s looking for a job, looking for opportunities to assist with upskilling or looking for assistance with resume and interview skills. All of those kind of things can be found at the Ohio Means Job Center, but also a lot of programs for employers, as you mentioned with incumbent worker training.
You know one of the big things that I’m sure the Lieutenant Governor talked about is the state’s TechCred program. So, if you follow the Lieutenant Governor’s social media channels, you’ll notice he often posts about TechCred, which offers businesses a way to upskill current and future employees for our technology-driven workplace.
You know, it’s interesting, when we look at most of the jobs that are kind of the in-demand jobs right now, a lot of those jobs didn’t even exist 20 years ago, and so it’s important for businesses, especially on the tech side, to have programs like TechCred that can help employers retain existing employees by upskilling them within the job. More than $35 million has been awarded just in the last two years to almost a little over 1,600 employers with Ohioans earning a little bit more than 32,000 credentials, so that’s a great new program that is part of that overall, what I would say kind of incumbent worker training suite of services that are available to employers in Ohio.
CLINT: And then the other offers through Ohio Department of Job and Family Services is on-the-job training which could be utilized for new employees at the county level through your local ODJFS office, correct?
DIRECTOR DAMSCHRODER: That is correct. There are lots of different opportunities there that help employers hire and train individuals for long-term employment. Employers can get help recruiting, prescreening, and hiring new employees, as you mentioned, help developing a workforce in training the skills that they need to thrive, and in some cases, even reimbursement for a percentage of the trainee’s regular wages during the training period. So, folks at the at the local Ohio Means Job Center can help connect employers to those opportunities.
CLINT: So, since you’re working closely with employers there, there seems to certainly be an opportunity for job seekers, those who are looking for work, those who may have lost work, or might be looking for a new career. Would the ODJFS office potentially be an opportunity for them to go in and look for somewhere to find a new job, where they could get a new skill?
DIRECTOR DAMSCHRODER: Yep, absolutely, so the local Ohio Means Jobs centers, kind of those brick and mortar offices, again are open to both employers and potential employees, and again on the employee side, opportunities for improving your resume, improving interview skills, opportunities for upskilling and training, apprenticeship opportunities. But also, I want to highlight the OhioMeansJobs.com website, which is really kind of that 24/7 opportunity again for employers to post jobs that are available, and also workers to post resumes, search for opportunities around the state. It’s a really great tool. Right now on ohiomeansjobs.com, there are almost 250,000 jobs listed on the site with more than 150,000 that have a starting wage over $50,000 a year, so that’s a tremendous and very powerful resource that we have in this state for employers to post their opportunities and for workers to find their next opportunity.
CLINT: So, that’s a great example of how workforce development is supported. You mentioned it earlier. It’s kind of funneled from the federal level, state level, down to the local, so we’re supported at all levels. We have the funding from the federal government, and then dispersed by the State Department to local agencies that really work with local employers, have boots on the ground in our communities, understand what the jobs are and are working with the people that live here to build that workforce up.
DIRECTOR DAMSCHRODER: Yep, and I think it’s especially for your audience of Chamber members, employers in Richland County. I think it’s especially important for those members to connect with what you guys are doing at the Chamber and connect through to the local workforce area and get involved with that board and the work that’s going on in your community, because really, there are opportunities there for, as a community identifies, hey, there is a particular workforce need that we have, sometimes you can target funds around some of those things.
So, I would really encourage people to connect with their local Ohio Means Jobs center, the Workforce Area Board, work through the Chamber, because it is really where some of those synergies are created to local level that can really make things happen.
I do want to mention, kind of in that vein, early May, the 1st week of May, the 2nd through the 6th, is In-Demand Jobs Week, and so I encourage employers to visit TopJobs.Ohio.gov to see a list of the most in-demand jobs in Ohio and put any hiring events that you might have locally or business-specific onto our statewide online map and can of course promote your top jobs on social media using the hashtag #indemandiohio, but that’s a great way that we highlight those top jobs across the state of Ohio.
Not that any other job is less important, but these are the most in demand that employers are telling us, and it’s a really great way for employers to connect through with the Chamber and with the Workforce Area Board on what’s going on in the local community.
CLINT: Let’s give that website one more time. What was it?
DIRECTOR DAMSCHRODER: TopJobs.Ohio.gov, so that’s where we can see the list of in-demand jobs. I would encourage folks to post their hiring events there, so we can create a statewide online map of what’s going on.
CLINT: And this podcast will be coming out the first week of May, so right in time for In-Demand Jobs Week there. Before we go, I do want to mention a couple of other websites that you should be aware of. If you’re in Richland County, Ohio, and you’re looking for Job and Family Services, RCJFS.net, Richland County Job and Family Services, RCJFS.net.
If you’re in Crawford County, CrawfordCountyJFS.org is your local source, and can’t forget OhioMeansJobs.com, which you mentioned earlier has lots of opportunities there, and it’s a great way to post your jobs and get it out there to the job seekers.
Director Damschroder, I really appreciate your time today. I’m excited that this is going to help us highlight a little bit, educate, and highlight the opportunities that we have through the Ohio Department of Job and Family Services just in time for In-Demand Jobs Week.
DIRECTOR DAMSCHRODER: Well, I’m grateful to be a part of the podcast with you and grateful for the great work that you and the folks at the Chamber are doing in your community. So keep it up.
CLINT: Well, thanks for joining us and I really appreciate your time.
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