Guardian UK: Unemployment – it's worse than you think

[marmar]

Unemployment – it's worse than you think
As bad as last week's numbers were, they don't tell the full story of America's job crisis

Michael Paarlberg
guardian.co.uk, Monday 9 March 2009 18.00 GMT


As if we needed another reminder of how bad things are, the US government released its latest unemployment figures on Friday.

The bureau of labour statistics reports unemployment currently at 8.1%, the highest level in 15 years. This puts the total number of unemployed Americans at 12.5 million. Over four million jobs have been lost since the recession began a year ago. More than half of those disappeared in the last four months alone – pointing to an acceleration of job loss as the recession deepens.

The problem with unemployment figures is they don't tell the full story. Unemployment, by definition, only counts those who are actively looking for work but cannot find it. Once you have simply given up, perhaps due to six months of steady rejections and hiring freezes, you are no longer unemployed. Rather, you are considered a "discouraged worker" and not counted as part of the labour force, along with children and retirees. If discouraged workers were to be factored in, the total jobless rate would be 14.8%, the highest level on record since the labour department began keeping tallies.

As any recession wears on, fewer jobs become available and more job seekers become discouraged. Therefore the longer this recession lasts, the less reliable a barometer the unemployment rate will be, and the more it will understate the severity of the crisis.

Also hidden in unemployment figures is the number of workers who are underemployed. Technically, you could have worked just one hour in the past week and still be considered employed. The ranks of "involuntary part-time" workers are growing, as some employees avoid the axe by allowing their hours to be cut. The average work week is now down to 33 hours. Besides the obvious negative effect on family income, workers who are shifted from full-time to part-time work usually lose their health benefits. In this country, a job crisis is by necessity also a public health crisis. .......(more)

The complete piece is at: http://www.guardian.co.uk/commentisfree/cifamerica/2009/mar/09/usa-unemployment-recession

[pinqy]

1. Can't anybody get it right?

" If discouraged workers were to be factored in, the total jobless rate would be 14.8%, the highest level on record since the labour department began keeping tallies The 14.8% figure is the U6, which includes ALL marginally attached and part-time for economic reasons. Marginally attached are people who say they want to and are available to work but haven't looked in the last 4 weeks for whatever reason. Discouraged workers are those who gave up looking because they believe they won't find work. The U4 measure is the one that adds on just discouraged workers and that rate is 8.5%.

And discouraged workers haven't been part of the figures since 1967, when they were dropped because it was too subjective.

Source: Bureau of Labor Statistics