NCPA - National Center for Policy Analysis

Millions of People Hop On ond Off Payrolls Every Month

November 8, 2002

A new Labor Department survey shows that the U.S. labor market, described in recent months by many economists and policymakers as stagnant, has instead been a churning cauldron of change, with millions of people each month getting hired and fired.

Given that, it seems that the more than 8 million jobless in September were not necessarily the same 8 million unemployed in August or October.

Last week the Department's Bureau of Labor Statistics (BLS) released the August results of its new Job Openings and Labor Turnover Survey, which painted a dynamic picture.

According to the survey:

  • About 3.7 percent of those at work at the end of August were hired that month.
  • At the same time, 4.1 percent of those at work on the last day of July left their jobs during August.
  • Of those who left, three-fifths quit and only one-third were discharged or laid off for more than a week, with the remaining fraction departing because of retirement, disability, death or transfer to another location.

The figures may even understate the amount of change, according to an analysis by two Federal Reserve economists of other BLS data collected each month. The Fed economists, Bruce C. Fallick and Charles A. Fleischman, found that labor market turnover was so great over a seven-year period ending in 2001 that, on average, 6.7 percent of all workers employed one month were not employed by the same employer the following month.

The survey also offers one figure that does not appear in the regular monthly statistics: the number of job openings. In August there were 3.49 million job openings for which employers were actively seeking workers.

Source: John M. Berry, "Pool of Unemployed Hardly Stagnant, Study Says," Washington Post, November 6, 2002.

For new "Job Openings and Labor Turnover Survey"


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