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Bridging climate science, citizens, and policy

Jobless Claims Jumps; Unemployment Number Too Low

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The largest number of jobs were lost since Dec. 1974 in Nov. 2008: 533,000.  The already announced September and October numbers were revised … downward.  403,000 jobs were lost in September (284,000 was the previous number) and 320,000 were lost in October (240,000 was the previous number).  Since the Bush/Con-servative recession began, over 1,900,000 jobs have disappeared.  Bush has set yet another milestone: the fewest number of jobs have been created during his presidency than at any time since the Great Depression.  Bush didn’t fail Con-servatism, as right-wing pundits would have us believe.  Bush executed Con-servative policies to the letter.  What’s happening today is, unfortunately, a predictable result of those policies.

The title menioned bad unemployment numbers.  I’ve written about this before and this month’s reported number provides a very good example of what I see wrong with it.  The article says that the unemployment rate catapulted from 6.5% to 6.7% from October to November.  Really?  The largest single month’s job loss in the past 35 years happened and the rate increased a whopping 0.2%?!  If that doesn’t make sense to you, there’s good reason.  And it’s why the rate doesn’t reflect the reality of the job market.  Reading a little further into the article,

The unemployment rate would have moved even higher if not for the exodus of 422,000 people from the work force. Economists thought many of those people probably abandoned their job searches out of sheer frustration. In November 2007, the jobless rate was at 4.7 percent.

So if folks aren’t actively looking for a job, they’re not counted as unemployed.  That makes absolutely no sense.  If they’re not employed, they’re unemployed … that’s what the word means.  The popularized “unemployment rate” is really a “job seeking rate” that is poorly surveyed.  Here’s what happened in the past: the unemployment rate used to count those who weren’t actively seeking work but also didn’t have a job.  As such, the reported rate was regularly higher.  That tended to have an effect on Americans’ psyche.  So in an effort to paint a pretty picture for everybody, the government changed the way the rate was calculated.

What does that mean from a policy standpoint?  It means that if you don’t think there’s a big problem, you’re not going to search for aggressive solutions to that problem.  You’re more likely to go with what Corporate America wants: leave them alone.  They’ve hired millions of overseas workers to fill jobs Americans used to have.  If Americans think the economy isn’t doing well or if they think too many of them are unemployed, or underemployed, they’re going to raise a stink.  Well, our elected officials, and the super-rich corporate interests that hold too much influence over them, can’t have that.  A frustrated populace tends to demand changes that Corporate America doesn’t want.  So things are sugarcoated.

I’ve read that if those not actively searching for jobs were counted, the unemployment rate would be quite a few percentage points higher.  If the underemployed (those working fewer hours than they want) were also counted, the unemployment rate would be more than double that which is popularly reported.  I recently found out that rate is calculated, but the corporate media doesn’t report it.  They’re only protecting us from ourselves, of course, by saying that it’s a complicated number and they’d have to spend time explaining it to Americans.  Thank goodness Americans have benefactors who can save us from our own stupidity.  Of course, it seems to me that the purpose of the press is to report the news, without alteration…

[Update 12/8/08]: I found the number I was looking for.  I also found numbers I wasn’t looking for, but are interesting nonetheless.  From the Bureau of Labor Statistics:
U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force…2.6%
U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force…3.9%
U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate)…6.7%
U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers…7.0%
U-5 Total unemployed, plus discouraged workers, plus all other marginally attached workers, as a percent of the civilian labor force plus all marginally attached workers…7.8%
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…12.5%

So the U-3 number is the official unemployment rate.  The U-6 number includes the under-employed and is likely the more accurate number.  The U-3 number hasn’t been the historical number reported as the official unemployment numbers.  In the past, calculations were closer to the U-6 number.  In the latter part of the 20th century, additional measurements were created (that counted fewer and fewer people) and were reported as the official number.  The value of the official number hasn’t changed much sine that process began, giving the impression that unemployment was lower than it actually was (and is).  That puts artificial pressure on workers and unfairly manipulates the labor market.


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