The good news: Long Island's unemployment rate dropped sharply in September. The bad news: Closer examination of the numbers shows the decrease was not due to residents getting back to work, but rather to a large number of Islanders dropping out of the labor force altogether.
The Island’s jobless rate fell to 6.4% in September, a 4 percentage point drop from August’s unemployment rate of 10.4%, according to data released Tuesday by the state Department of Labor. While on the surface that suggests a boon for Nassau and Suffolk counties in their effort to recover from the economic effects of the pandemic, local economists said it’s not the good news it appears.
"Sometimes the unemployment rate can be misleading, and this is one of those times," said John A. Rizzo, chief economist for the Long Island Association business group. Rizzo said that the drop in the rate is due not to an increased number of job offers, but instead to a shrinking of the region’s labor force.
From August to September, the Island’s labor force — the sum of all employed residents and all those unemployed but looking for work — dropped by 71,100 individuals, going from 1.51 million to 1.44 million.
While a common measure of economic vitality, the unemployment rate excludes those who are out of work and not actively looking. This unaccounted-for category can include retirees or students, but it is also made up of what economists call "discouraged workers."
September's improved jobless rate is "really a function of people leaving the labor force because they were discouraged," Rizzo said.
Shital Patel, labor market analyst in the department's Hicksville office, offered a possible explanation for the large labor force drop last month.
Pointing to national demographic data, Patel said it's possible that the local drop could be due to parents, most likely women, pausing their job search to stay at home as the new school year started.
"The national statistics revealed that 617,000 women dropped out of the labor force in September, compared to only 78,000 men," Patel said. "This coincided with the start of the school year as many parents are homeschooling their children while trying to continue their professional careers, and the burden seems to fall more on mothers."
That explanation is one with merit, said Richard Vogel, dean of the school of business and professor of economics at Farmingdale State College.
"With the school year starting back up, somebody has to be home to oversee remote learning," Vogel said. "Most of the schools on Long Island are only partially open."
Overall, Vogel said the recent unemployment report doesn’t offer much in the way of positive news.
"While the raw unemployment numbers say we’re doing really well, a deeper dive into these numbers suggest we aren’t any better off than we were a month ago."
The unemployment rate in Nassau was 6.6% last month, and 6.2% in Suffolk.
In Nassau, the municipality with the highest unemployment rate was Hempstead Village, with a jobless rate of 9.2%. In Suffolk, the Town of Babylon had the highest unemployment rate at 7.5%.