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Employment and Jobs Are Not the Same Thing: What's the Difference?

Every month the BLS releases two sets of numbers. Let's investigate the differences.
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Relationship Between Employment and Jobs 2021-05

Long Term Relationship

Relationship Between Employment and Jobs Long Term 2021-05

Neither Covid nor recessions in general greatly distort the relationship between jobs and employment, but what do they represent?

Employment Level

The employment level comes from a household phone survey. If you worked as few as one hour you are employed. 

Here is the strict definition according to the BLS Glossary.

Persons 16 years and over in the civilian noninstitutional population who, during the reference week, (a) did any work at all (at least 1 hour) as paid employees; worked in their own business, profession, or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family; and (b) all those who were not working but who had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs. Each employed person is counted only once, even if he or she holds more than one job. Excluded are persons whose only activity consisted of work around their own house (painting, repairing, or own home housework) or volunteer work for religious, charitable, and other organizations.

Nonfarm Payrolls

The St. Louis Fed explains Total Nonfarm Payroll.

All Employees: Total Nonfarm, commonly known as Total Nonfarm Payroll is a measure of the number of U.S. workers in the economy that excludes proprietors, private household employees, unpaid volunteers, farm employees, and the unincorporated self-employed. This measure accounts for approximately 80 percent of the workers who contribute to Gross Domestic Product (GDP).

The potential for double-counting jobs in the payroll survey is large. The BLS tries to sort this out but they do not check for duplicate social security numbers. 

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Once again, someone working one hour is counted. 

Self-employment and irregular work is estimated via a questionable Birth-Death Model in which the BLS count people it believes are working but who do not show up in payrolls. Birth-Death refers to the birth and death of businesses, not individuals. 

Both the Employment Level (Household survey) and the Payroll Survey (Establishment Survey) have flaws.

Employment Level vs Nonfarm Payrolls

  • Employment Pre-Covid: 158,732,000
  • Payrolls Pre-Covid: 152,523,000
  • Employment April 2020: 133,370,000
  • Payrolls April 2020: 130,161,000
  • Employment May 2021: 151,620,000
  • Payrolls May 2021:  144,894,000

Absolute Declines 

  • Employment February 2020 to April 2020: 25,362,000
  • Payrolls February 2020 to April 2020: 22,362,000
  • Employment February 2020 to May 2021: 7,112,000
  • Payrolls February 2020 to May 2021: 7,629,000

Recovery Percent

  • Employment: 72.0%
  • Payrolls: 65.9%

For a discussion of the latest jobs report in detail, please see Job Growth Is Well Under Expectations Yet Again

Also see Explaining the Shortage of Skilled Workers and Why It Will Get Worse

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