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Dynamics of Economic Well-Being: Labor Force and Income, 1990 to 1992

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Report Number P70-40

Note: All demographic surveys, including SIPP, are affected by undercoverage of the population. This undercoverage results from missed housing units and missed persons within sample households. Compared with the level of the 1980 decennial census, overall undercoverage in SIPP is about 7 percent. Undercoverage varies with age, sex, and race. For some groups, such as 20- to 24-year-old Black males, the undercoverage is as high as 27 percent compared with the census. It is important to note that the survey undercoverage is in addition to the decennial census undercoverage, which in 1980 was estimated to be about 1 percent overall and about 8.5 percent for Black males. The weighting procedures used by the Census Bureau partially correct for the bias due to undercoverage. However, its final impact on estimates is unknown.


After nearly a decade of rising employment and income levels, Government statistics from the early 1990's clearly show the effect of the 1990 to 1991 recession on income levels and the Nation's job market. The Department of Labor's Bureau of Labor Statistics (BLS) reported that the number of nonfarm payroll jobs, which had grown by almost 20 million between 1983 and 1990, fell from a monthly average of 109.4 million in 1990 to 108.5 million in 1992. The job loss was particularly severe in the goods-producing industries; the number of jobs in this sector declined from 24.9 million in 1990 to 23.1 million in 1992.

BLS's distressing news about jobs was matched by their equally distressing news about unemployment. The Nation's monthly civilian unemployment rate, which had fallen from an average of 9.7 percent in 1983 to 5.3 percent in 1989, shot up quickly to 7.4 percent in 1992.1

The economy's inability to create jobs was part of the reason behind the falling incomes in the early 1990's.2 Between 1989 and 1992, median household income in the United States fell by 6 percent in real terms, after rising by 1 O percent between 1983 and 1989, according to the Current Population Survey (CPS).3 Between 1989 and 1992, the number of persons in poverty rose by 5.4 million, and the poverty rate grew from 12.8 to 14.5 percent.4

1 The National Bureau of Economic Research reported that the peak of the last business cycle was reached in July 1990 and the trough in March 1991. The Nation's labor market developments are carefully monitored by the Department of Labor's Bureau of Labor Statistics (BLS) through various surveys and other information collecting efforts. Their monthly survey of employers' establishments—formally referred to as "Form 790, Report on Employment, Payroll, and Hours"—in the nonagricultural sector of the economy is used as a measure of job change. Their monthly survey of households—the Current Population Survey (CPS)—is used to measure both employment and unemployment and is the source of the Nation's unemployment rate.

2 See Thomas Nardone, Diane Herz, Earl Mellor, and Steven Hipple, "1992: Job Market in the Doldrums," Monthly Labor Review, February 1993, pp. 3-14.

3 Money Income of Household, Families, and Persons in the United States: 1992, Current Population Reports, PS0-184, U.S. Bureau of the Census (Washington, D.C. USGPO), September 1993.

4 Poverty in the United States: 1992, Current Population Reports, PS0-185, U.S. Bureau of the Census (Washington, DC USGPO), September 1993.

Page Last Revised - October 8, 2021
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