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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Actual U.S. Unemployment: 15.8%

This morning's news that U.S. unemployment has hit 13.7 million, pushing the rate to 8.9 percent, tells only half the story of this recession.

The total number of Americans who are not working full-time but ought to be is actually about 22 million, or 15.8 percent, according to the Bureau of Labor Statistics.

Who are those other 8.3 million Americans? Call them the unofficially unemployed.

As The Ticker points out each time the Bureau releases the monthly unemployment figure, it does not include many out-of-work Americans.

There are many reasons for this.

The bureau, which is under the Labor Department, cannot use unemployment compensation records to count the out-of-work, because they are not reliable or up-to-date enough. The bureau also cannot count every out-of-work person.

Instead, as The Ticker reported here in December: "In the case of the monthly jobs report, the Labor Department contacts 60,000 households to determine the unemployment picture for the entire workforce, which consists of about 154 million Americans."

The problem with this methodology is that it does not include millions of Americans who are not working full-time who ought to be. Those, in the bureau's words, who are "marginally attached to the labor force."

Those numbered an additional 2.1 million Americans in the first quarter of this year, the bureau said. Alarmingly, that number was up 35 percent from the first quarter of 2008.

Of this number, the bureau categorized 717,000 as "discouraged" workers, or those that have simply given up looking for work for any number of reasons. That number was up 70 percent from the first quarter of 2008.

"Discouraged" workers include a disproportionate number of young people, blacks, Hispanics and men, the bureau said.

On top of all of this, add an additional 3.6 million unemployed Americans who say they want a job but have not looked for work in the past 12 months.

The remaining 2.6 million or so officially unemployed Americans include part-time workers who would prefer to have full-time jobs, those who have not looked for work because of illness or transportation reasons and those who believe they have other impediments.

But even though these workers don't count toward the official monthly unemployment number, they are nevertheless a true weight on the economy.

They don't pay payroll tax, or as much of it as they would; they don't contribute to Social Security or other government entitlement entitlements and they don't spend as much.

The 15.8 percent figure is the highest since the bureau began keeping these figures in 1994. Excluding the current recession, the highest previous rate came in January 1994, when it hit 11.8 percent.

The number was 8.7 percent in December 2007, when the current recession began. That means the number of the unofficially unemployed has shot up 7.1 percentage points since then.

By comparison, the official unemployment rate has risen 3.9 percentage points since December 2007. This suggests that a greater percentage of people are becoming disenfranchised from the workforce than are getting laid off.

By the way, in February, the White House predicted unemployment would top out at 8.1 percent this year, a figure that was blown through the following month.

It has made no call on how high the unofficial unemployment rate will go.

-- Frank Ahrens
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By Frank Ahrens  |  May 8, 2009; 3:25 PM ET
Categories:  The Ticker  | Tags: Bureau of Labor Statistics, Labor Department, unemployment  
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Comments

The "official" unemployment rate has long been as phony as the inflation rate. Both are always higher than the figures given by the Labor department, which so underestimate real numbers as to be akin to propaganda.

Posted by: Aprogressiveindependent | May 8, 2009 4:32 PM | Report abuse

Excellent article and very realistic. I am one of those who would have a full time job except for layoffs and cutbacks. I have a master’s degree and cannot find full time work, am an older worker, and am fully capable of working. I empathize with the workforce and readily understand the dilemma that is occurring within this country. How do we as those desiring full time employment find it? Networking is an excellent avenue, but not a definite answer either. I, for one, am becoming a stronger entrepreneur and developing an online business. I have not given up hope, am not disenfranchised, and am very aware of the growing loss of jobs and potentials for many Americans.

Posted by: SeaJay1 | May 8, 2009 5:03 PM | Report abuse

Howard Sosin flourished in Wall Street's footloose days of the mid-80s. As the founder of AIG Financial Products, he invented many of the complex financial instruments blamed for changing the rules of risk and wrecking the global economy. Now Sosin says he has a plan to fix America’s banks and restore confidence in the markets. Can a guy who got rich trading credit default swaps save the global economy?

Really interesting article and video interview: http://bigthink.com/ideas/founder-of-aig-financial-products-has-a-plan-to-rescue-global-economy

Posted by: SteveRDuque | May 8, 2009 5:10 PM | Report abuse

Wow, what a shock!! You mean its actually higher? LOL As the previous post mentioned, its not just akin to propaganda, IT IS PROPAGANDA! I don't believe anything this government tells me. What should have happened was not allowed to happen, ie, these criminal banks allowed to fail, as they surely would have without taxpayer money and accounting rules amended to allow them to cook the books. What a joke. Sickening. Well, we will pay for this down the road to be sure. More worthless "wealth" created. Back to the same old same old. Remember that book, "Dow 36,000"? Oh yeah baby. Invest invest. Why not. Grab it while you can. Short term gain for long term pain...for the future generations that is. Thats the American way. Peace, y'all

Posted by: bookman1 | May 8, 2009 5:15 PM | Report abuse

Well, someone ought to pay attention to the "underground economy." Lots gets doe for cash or barter and is not reported either. But that goes the other way.

Posted by: GaryEMasters | May 8, 2009 5:17 PM | Report abuse

It is refreshing to see that the unofficially unemployed have been deemed worthy of mention on the front page. Manipulation of figures by all governments worldwide in unemployment, inflation, bank losses/profits, etc is understandable given that public reactions and perceptions have to be managed to prevent pandemonium. Whilst the incredible infusion of money by governments into the system has probably averted a full scale disaster, the longer run will be nothing more than a slow downward grind where people will find lower standards of living, crippling medical costs and delayed retirement to be the order of the day. The danger always remains that something out of left field could unleash a sudden second round collapse. Murphy is dead but his law remains.

Posted by: psouleles | May 8, 2009 5:21 PM | Report abuse

This is the best article that I have ever read related to unemployed people who are not included in the official unemployment rate.

The current method of computing official unemployment rate was implemented during President Clinton's time in office. It seems to me that the thinking at the time was that the people identified in the article are not counted because they may never get full-time employment. A factor not mentioned in the article, is the move by large retail stores like Sears, as far back as the late 1980's, to phase out their full-time sales staff & replace them with part-time workers. Retailers do not provide part-time employees health benefits, sick leave, or annual leave. Most retailers pay the minimum wage to part-time sales people & wage increases are seldom given. If wage increases are given, the raises are very small (think 25 cents). The retail stores have fewer sales people working at any given time and schedule them to work more time than 20 hours but less than 40 hours a week so they are kept in a part-time status. It is also quite possible that the change was made to give the perception that a very significant drop in the official unemployment rate was achieved.

Why not go back to what was used during the Reagan-Bush 41 terms as President? A government & media push to explain the change as not being a huge jump in those unemployed may help consumer & business confidence, or at least prevent a further decline in their confidence.

Posted by: richardtag | May 8, 2009 7:16 PM | Report abuse

No doubt dude time is a ticking!

RT
www.privacy-web.net.tc

Posted by: clermontpc | May 9, 2009 5:52 PM | Report abuse

This article would be considerably more legit if it included workers who have
1)exhausted their benefits and got an extention;
2)got a job before they ran down their benefits;
3)got a job before they ran down their extentions
4)made an job market assessment as soon as or before getting laid off, then enrolled in trade school under special circumstances-no jobs available in worker's trade. You can usually get a year or more of unemployment insurance benefits (which you and your boss already paid for), Pell grants, student loans, etc.
5)New applications for welfare based on long term unemployment or underemployment.

The figures are there - try applying in school and you'll find out they know everything about you.

WaPo saying that the figures just aren't there should be inteperted as;

"Don't bug me, I'm eating my donut, and I don't have all day to spend on this dumb story"

Posted by: 4woodenboats | May 9, 2009 7:26 PM | Report abuse

Thanks for not reporting the true unemployment numbers for eight years under the Cheney administration. It's really important you get them out now. I'm sure Michelle Bachmann will see that unemployment has nearly doubled in two months under Obama. Nice work.

Posted by: namewithheld | May 9, 2009 7:48 PM | Report abuse

You dudes must know fewer or NO jobs as long as BHO promises to punish the sucessful. Seems rather simple to me, but I am a dinosaur?

Posted by: RNELSON4 | May 10, 2009 8:36 PM | Report abuse

It is more like 22% unemployment, but silence don't tell anybody. The bear rally at Wall Street will be soon over and the jobs are still not back.

GM, Ford and Chrysler will produce abroad.

Wake up! The Dollar falls again and no investors inside for the US treasuries.

September/October will bring some bad surprises.

Posted by: holocaustgaza | May 11, 2009 6:10 AM | Report abuse

I'm another one who is out of work and not likely to ever be hired again. I hold a Master's degree and have spent nearly 20 years in my profession. Yet, these days, I can't get a job selling selling coffee or books, let alone anything even remotely in my field. Networking doesn't work. Professional web sites don't work. When there are no jobs, nothing works. Including me. As for re-schooling or re-training, who's going to hire a 52-year-old college grad when 22-year-old college grads are plentiful? Despite the fact that the information contained in this article is depressing, I found it to be refreshing in its accuracy and honesty.

Posted by: JohnGaltSaysSo | May 11, 2009 7:47 PM | Report abuse

I cannot believe that nobody thought to include the number of people in the prison system that are of working age - and would indeed be working if they had - had a chance, recieved education and training and had real job opportunities. I know they are not all solid citizens but the fact that the US locks up at least 5X more of its citizens than the next runner up, suggests that if we were at true full employment and were not locking up casual drug users the real unemployement rate in this country is closer to 20 % right now!

Posted by: Makavelly013 | May 14, 2009 4:09 PM | Report abuse

The comments to this entry are closed.

 
 
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