On what is usually the first Friday of every month, the US Bureau of Labor Statistics releases its Employment Situation Summary, or monthly jobs report, formally known as the “nonfarm payroll” report. It’s an economic snapshot that provides crucial information about job losses and gains and the overall health of the US labor market. It can also lead to stock market swings and affect monetary and fiscal policy decisions.
But why does this key employment report only tally “nonfarm” workers?
The most straightforward answer is that accurately counting farmers would be both too difficult and too expensive.
The BLS website says the US government relies on administrative records from the Office of Unemployment Insurance to determine payroll data for its monthly job reports. That means workers not covered under the government’s unemployment insurance system, which pays benefits to workers who have lost their jobs, won’t be counted.
Farm work is highly seasonal and is frequently family business-oriented or informal work, meaning that many of the industry’s employees are not traditionally covered by UI benefits, according to Erica Groshen, a former head of the Bureau of Labor Statistics.
As a result, obtaining an accurate count would be a formidable task for the BLS, Groshen said.
“Doing the seasonal adjustments would be very challenging, and the sample sizes would be very small because it’s really not that large a part of overall employment,” she said. “So, it would be very expensive, and the quality probably wouldn’t be great.”
However, despite the “nonfarm” nomenclature, a growing share of farm workers does make it into the BLS job report tally.
As the farming industry consolidates and smaller family-owned farms make way for corporate farming giants with an increased focus on automation, more of those workers have become eligible for unemployment insurance, Groshen said.
“The ones who are in these incorporated large farming companies, such as people who maintain the machinery or do programming or forecasting, those folks are counted,” she said.
Agricultural workers who slip through the cracks of BLS’s report are not entirely unaccounted for, though.
Historically, the job of counting farm workers falls to the US Department of Agriculture due to its relationships with farms across the country. Twice a year, in May and November, the USDA conducts a farm labor survey that counts field workers, livestock workers, supervisors and other people who work on farms. The USDA’s most recent survey, released in May, found that 651,000 workers were hired directly by farm operations on US farms and ranches during the week of April 9-15.
The “nonfarm payrolls” description was adopted decades ago when farmers made up a more significant percentage of the US economy, Groshen said. But farmers aren’t the only workers the jobs report excludes: Elected officials, domestic workers, some members of the clergy and people in many other nontraditional professions are also left behind in the official jobs report data.
Read the full article here