U.S. Payroll to Population Rates Higher Among College Grads
Economy

U.S. Payroll to Population Rates Higher Among College Grads

Less educated Americans least likely to be employed full time for an employer

WASHINGTON, D.C. -- U.S. college graduates and those aged 25 to 54 are the most likely to hold full-time jobs with an employer, according to Gallup's new Payroll to Population (P2P) measure. Hovering at or around 60%, their P2P rates far exceed the national average of 45.3% and that of other major demographic groups. Those Americans with no more than a high school degree are the least likely to have the type of jobs most strongly linked to GDP.

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These results are based on Gallup Daily tracking interviews with more than 30,000 Americans, conducted Aug. 1-31, 2012, by landline and cell phone.

Gallup's P2P metric tracks full-time employment with an employer among the entire U.S. adult population to provide a clear-cut indicator of U.S. employment that is not affected by shifts in the size of the workforce. The P2P metric does not count adults who are self-employed, working part time, underemployed, unemployed, or out of the workforce as payroll employed. According to Gallup's global research, P2P rates are strongly correlated with GDP and are thus a powerful indicator of economic energy in a country. Gallup does not seasonally adjust P2P.

Underemployment and Workforce Participation Measures Help Explain P2P Rates

Among the various employment categories Gallup tracks, underemployment rates -- which include those who are unemployed or working part time but actively seeking full-time work -- and out of the workforce rates in particular provide important context on the P2P findings.

For example, men have a higher P2P rate, 53% to 38%, in large part because women are far more likely than men to be out of the workforce. However, this variation alone cannot explain this difference in P2P rates by gender. Women are also more likely than men to be underemployed, 20% to 14%, meaning they are more likely to be seeking additional work.

P2P rates by age provide a more nuanced story. While 25- to 54-year-olds have the highest P2P rates, those who are 25 to 34 are more likely to be underemployed than those aged 35 to 54, 17% vs. 14%. Americans 55 to 64 have a P2P rate only slightly lower than 18- to 24-year-olds, 40% vs. 45%, despite being far more likely to be out of the workforce because they also have a low underemployment rate. In fact, the higher P2P rate among the 18- to 24-year-old group is caused not so much by their "out of the workforce" rate, which might be expected given an assumption that many are students, but rather the fact that this group has one of the highest underemployment rates overall at 31%.

Education appears to be a key predictor of P2P employment as Americans with a college degree or postgraduate degree have high P2P rates, low underemployment rates, and relatively low out of the workforce rates. On the other side, Americans with no more than a high school degree have a low P2P rate and high underemployment and out of the workforce rates.

Hispanics have a higher P2P rate than whites and blacks. This is largely because a smaller percentage is out of the workforce -- likely because Hispanics in the U.S. skew young as a group compared with whites and blacks.

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Implications

With the U.S. Bureau of Labor Statistics' unemployment rate sometimes holding steady or falling because of a declining workforce participation rate, rather than because of robust jobs growth, Gallup's P2P rate brings new clarity to the U.S. employment picture. Focusing on full-time employment as a percentage of the total adult population offers a clear lens with which to examine how different groups are faring, without the complications caused by shifts in the workforce participation rate and seasonal adjustments.

An encouraging sign is that at least six in 10 25- to 54-year-olds are employed in full-time jobs, and thus contributing to the economic energy of the country. However, the national P2P rate may only stay steady or go down as more baby boomers move into the 55+ age brackets and retire. Additionally, the relatively high rates of underemployment in the U.S. among 18-to 24-year-olds, blacks, adults with a high school education or less, women, and Hispanics point to economic potential that is currently underutilized. As companies grow and more entrepreneurs thrive and create more full-time jobs for these groups to help fill, the economy clearly stands to benefit. Further, higher P2P rates among all groups would help the U.S. to climb the list with the highest P2P rates globally.

Perhaps the clearest sign in these data is that more education translates to higher workforce participation rates and higher P2P rates. As such, increasing the percentage of college-educated Americans may be critical to increasing the country's P2P rate to a measurable degree -- and in turn pushing the economy forward in a sustainable way. A potential silver lining in the country's economic struggle is that if a significant number of workers have left the workforce to pursue more education over the past several years, those individuals will be poised to foster positive gains in the future, both for themselves and the economy, provided they are able to secure full-time jobs.

Gallup.com reports results from these indexes in daily, weekly, and monthly averages and in Gallup.com stories. Complete trend data are always available to view and export in the following charts:

Daily: Employment, Economic Confidence, Job Creation, Consumer Spending
Weekly: Employment, Economic Confidence, Job Creation, Consumer Spending

Read more about Gallup's economic measures.

View our economic release schedule.

Survey Methods

Results are based on telephone interviews conducted as part of the Gallup Daily tracking survey Aug. 1-31, 2012, with a random sample of 31,364 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia, selected using random-digit-dial sampling.

For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±1 percentage point.

Interviews are conducted with respondents on landline telephones and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking. Each sample includes a minimum quota of 400 cell phone respondents and 600 landline respondents per 1,000 national adults, with additional minimum quotas among landline respondents by region. Landline telephone numbers are chosen at random among listed telephone numbers. Cell phone numbers are selected using random-digit-dial methods. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday.

Samples are weighted by gender, age, race, Hispanic ethnicity, education, region, adults in the household, and phone status (cell phone only/landline only/both, cell phone mostly, and having an unlisted landline number). Demographic weighting targets are based on the March 2011 Current Population Survey figures for the aged 18 and older non-institutionalized population living in U.S. telephone households. All reported margins of sampling error include the computed design effects for weighting and sample design.

In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

For more details on Gallup's polling methodology, visit www.gallup.com.

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