Friday, June 19, 2009

Unemployment Footnotes: Actual Unemployment As Of May 2009: 16.4%.

The U.S. Department of Labor has a terrific web-site full of charts, statistics, and reports including specifically a sad report of the number of Americans thrown out of work every month. As with so many "official" reports, you need to read the footnotes to understand what any of it means.

On the unemployment field, here's a summary: more Americans were thrown out of work in May, 2009. Another 350,000 Americans lost their jobs last month. That's another 350,000. The "baby-green shoots" mantra from the federal government tells us to ignore this information, that it's not as bad as it could be, but the cumulative effect of jobs being taken out of this country is devastating. Every single person who loses their job will likely also run up tremendous debt trying to survive, cash in their IRAs, maybe lose homes and cars, and spend years trying to dig themselves out of the hole. It keeps getting worse. It is a really bad time in our country for working people.

But of more importance, for those trying to gauge just how bad things are, we need to remember that the "official" unemployment rate for May of 2009 of 9.4% is not the "real" unemployment rate in this country, certainly not an accurate picture of what's going on in the jobs area of life for most people.

The Department of Labor includes a second number, which I call the "actual" unemployment level, which shows at a minimum 16.4% unemployment. This measure includes people who only can find part-time work (so they can't pay their bills) but want full-time and can't find it, as well as other categories such as "discouraged workers" -- people who have been job-hunting recently, but technically do not comply with the labor department criteria for "unemployed."

It is of course important to realize that minorities often have an unemployment rate twice that of the "general" (white) population, which means unemployment in minority communities may be over 30%.

Table A-12. Alternative measures of labor underutilization

Seasonally adjusted

May 2009

"Official" Unemployed As Of May, 2009

U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate): 9.4%.

Total Percentage "Actual" Unemployed In U.S. As of May, 2009


U-6 Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers: 16.4%.

NOTE: Marginally attached workers are persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past.

Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not looking currently for a job.

Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule

For more information, see "BLS introduces new range of alternative unemployment measures," in the October 1995 issue of the Monthly Labor Review.

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