Hundred Power

Today the Labor Department released the results of its survey of the employment situation in the United States. The “official” unemployment rate (their words) is now 8.1%. If you earned $10 last month, you’re counted as employed. Their “official” rate is the rate you see reported in the newspapers and on TV. In one sense, it’s the rosy statistic that has been used for decades.

However, if you wanted to get a better feel for the true misery rate of America, you’d have to look at the underemployed as well as the folks who said they just didn’t bother to look for work anymore. The reference link below will show you better measures. The official rate, that 8.1% number, is called U-3. Take a look at a second statistic called U-6. That measure of misery says the unemployment rate is 14.8%. That measure is also worthy of mention in the media. It tells us that one person in seven can’t find a full-time job.

For years, my rule of thumb is to double the official rate of employment to get a sense of how many people are doing poorly in the U.S. To get the exact number for U-6, you’ll invariably have to visit the website of the Dept. of Labor. They don’t even have a name for it except “U-6.” Let’s just call it the “Comprehensive Misemployment Rate.” Just remember the next time you hear the “official” rate that it is just not the whole miserable story.

Here’s yet a third way to see what the average working person is up against. The U.S. has an increasing population. In 8 years the population went from about 281 Million to 306 Million. So just to stay even in jobs for Americans, new jobs have to be created at the same rate. In the last 8 years, Americans have been falling behind. Here’s the slow decline for working men and women:

Remember how we regularly hear about how many jobs were created in any given month? That’s nice, but it’s misleading. If the media were telling these statistics at the expense of the full story, one would call it propaganda.

When was the last time you heard that phrase “full employment?” It’s a by-gone concept. In the 1970’s, the Congress defined “Full Employment” to be reached when the “official” unemployment rate is “only” 4%. That definition puts a seal of approval on a lot of misery for Americans. Remember, when you have 4% “official” unemployment, the “Comprehensive Misemployment Rate” U-6 is around 8%.

Let’s have a wild and crazy dream. Let’s shoot for a full employment rate of about 105%. That would be a good indicator that jobs are going begging due to a booming economy in America.

Click here to contact your representatives in Washington, D.C.:
Our Elected Officials.
Ask him or her about “U-6″. Let us know whether they know or care.

– Byron

References:

“Table A-12. ,” U.S. Bureau of Labor Statistics, March 6, 2009.

Alternative measures of labor underutilization.