Baloney Sandwich Index predicts lower jobless rate

The November jobless rate in the Fort Smith region should decline based on the November Baloney Sandwich Index (BSI).

Ken Kupchick, author of the BSI, says the index has a 70% correlation with Sebastian County unemployment numbers and a 68% correlation rate with the Fort Smith metro unemployment rate.

November’s BSI is 175.5, down from the 193.6 in October. The October rate was an increase over the 153 in September.

The number of unemployed in the Fort Smith region rose above 10,000 during October, which helped push the region’s jobless rate up to 7.9% from 7.6% in September. The October 2011 jobless rate in the region was 8.3%.

The number of employed during October fell to 118,385 from 120,396 in September. The October employment was also below the 119,602  in October 2011. Unemployed persons in the region totaled an estimated 10,198 during October, above the 9,941 during September and below the 10,757 during October 2011.

Kupchick, director of marketing and development for the River Valley Regional Food Bank, uses three numbers to compute the BSI: the number of sack lunches served by the St. John’s Episcopal Church sack lunch program, the Sebastian County jobless rate and the Fort Smith metro jobless rate.

The sack lunch program served 5,180 lunches in November, a record number for the month. August set a record for any month of the program with 5,957 lunches served.

“After correctly indicating an uptick in metro and county unemployment for October, the Baloney Sandwich Index predicts a calming or slight improvement in the rate of unemployment for the month of November,” Kupchick noted in the report.

The U.S. November unemployment rate fell to 7.7%, the lowest since December 2008, but the size of the labor force shrank. The October rate was 7.9%.
 
Kupchick said a concern with the BSI going forward is its predictive value when considering long-term unemployment, especially with respect to the number of lunches served. October was the 46th consecutive month the Fort Smith metro jobless rate has been at or above 7%.

“As workers give up seeking employment, they fall out of the count of the unemployed. Ironically, these are the patrons of the Sack Lunch Program. A recent survey at St. John's showed that 47%, or almost one-half, of the Sack Lunch Program patrons have been unemployed for two or more years,” Kupchick explained.
 
He also said the survey indicated that one-third of St. John’s patrons are “chronically dependent” on the lunch program for food.

“While 22% were either seniors or disabled individuals finding their fixed incomes insufficient to make it from month to month, another 12% were working but unable to afford a sufficient amount food for themselves or their families,” noted Kupchick’s report.