
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, February 3, 1994                   TAG: 9402030076
SECTION: BUSINESS                    PAGE: B-8   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

FOR YEARS, THE GOVERNMENT DIDN'T CONSIDER

For years, the government didn't consider the Avon lady in calculating the nation's unemployment rate, because she worked from home and probably cooked and cleaned house, too.

But Labor Department officials say they have found a better way of keeping up with who works and who does not, and the first results of their retooled effort will show up in Friday's unemployment report.

The most notable consequence likely will be a higher unemployment rate.

The old counting method, being scrapped after 41 years, was good at measuring 9-to-5 employment but not so reliable in calculating part-time work, part-year work and home-based work, said the Bureau of Labor Statistics, a division of the Labor Department.

For instance, a person who sold cosmetics door-to-door part time and spent the rest of the day at home might not be counted in the work force. A construction worker who had just completed a project but had not yet begun another also might be overlooked.

The new survey will count those people, along with those stringing together multiple part-time jobs to make a living and those running home-based businesses.

Rather than ask women questions such as whether they are keeping house, it asked whether they work for pay or profit. For the first time, the agency asked whether any family member runs a business or farm.

Economists are predicting an increase in the unemployment rate of anywhere from four-tenths to six-tenths of a percentage point above the 6.4 percent December rate, a three-year low, but they say such an increase would not be a signal of weakness in the economy, just a result of the recalculation.

"The new survey instrument will give us a much more accurate picture than we've ever had, because it eliminates a bias against women who are seeking work," said Labor Secretary Robert Reich.

Analysts think the unemployment rate for adult men and teen-age workers will show little change, but they expect a big difference in the rate for adult women.

Robert Dederick, chief economist with Northern Trust Co. in Chicago, said the old technique was fine when most women stayed home to cook, clean and care for their families.

But today, he said, "women are more important in the work force," and the new method is needed.

Still, Dederick said, the old survey results were valid in showing declining unemployment and a growing work force.

"Unemployment has been coming down," he said.

The government spent seven years and $40 million revamping its questionnaire and tested the new survey from September 1992 until August 1993 alongside the traditional study. The new method showed the overall number of men in the work force half a percentage point lower than reported using the traditional method, while the number of women was 1.3 percent higher.

by CNB