The 'Real' Unemployment Rate Is Still Really Lousy

[markomalley]

From U.S.News & World Report:

If you have doubts about the official jobless rate, there’s another rate you can check out instead–the “real” unemployment rate, which measures everybody considered unemployed plus a lot of others who are falling through the cracks.

The government calls this the “U-6” rate, and it has become a source of considerable intrigue lately. Some critics of President Obama contend that the government keeps the “real” rate a secret, because it reveals an economy that’s in far worse shape than the official unemployment rate suggests. Republican presidential candidate Mitt Romney says frequently that while the official unemployment rate may be improving, the real rate is still terrible. “If not for all the people who have simply dropped out of the labor force,” Romney said in a recent statement, “the real unemployment rate would be closer to 11 percent.”

It may be even higher than that, depending on how you count. The official unemployment rate fell in September from 8.1 percent to 7.8 percent, which is good news for Obama heading into the last few weeks before the November elections. The unemployment rate is now 2.1 percentage points below its 2009 peak, and at the same level as when Obama took office.
I think that the author is downplaying it a lot. There are currently 88,697,000 people who are not considered to be in the labor force. 1.9 million more now than 2 months ago:

http://i.imm.io/HkRO.png
If you correct the denominator of the unemployment rate to take that into account, the number would go up dramatically!

 

[Dubay]

Got poverty, welcome to Obamanomics

 

[meltzerboy]

Got poverty, welcome to Obamanomics

I remember supply-side Reaganomics, or what George H.W. Bush called voodoo economics. Now Obamanomics. Did you coin the term?

 

[Nimzovik]

No. Poverty did.

 

[jeannetherese]

Hi Markomalley.
Thank you for your informative post. Without such explanation, it is all too easy to miss the large number of people who have been dropped from the official rolls of the unemployed without finding employment.
May God bless all who are unemployed or underemployed. Amen.

 

[Gail_Autumn]

As much as my prayers go out to all those that are struggling and truly searching for work (and the anti-success, anti-business direction of our federal government isn’t helping those people at all), my sense of it is that they are the minority of the ‘unemployed’. There are too many Americans who are either too lazy, too entitled, or too proud (or all of the above) to actually work at whatever job is available when it is too easy to sit around and collect a check for doing nothing. Of course, I will never understand how someone can be ‘too proud’ to work a blue collar job to support their family, but is perfectly okay with accepting a handout to do so…

 

[DarkLight]

As much as my prayers go out to all those that are struggling and truly searching for work (and the anti-success, anti-business direction of our federal government isn’t helping those people at all), my sense of it is that they are the minority of the ‘unemployed’. There are too many Americans who are either too lazy, too entitled, or too proud (or all of the above) to actually work at whatever job is available when it is too easy to sit around and collect a check for doing nothing. Of course, I will never understand how someone can be ‘too proud’ to work a blue collar job to support their family, but is perfectly okay with accepting a handout to do so…

Depending on where you are, it’s not a matter of accepting or not accepting a blue collar job. Last time I had to look for work (not too long ago) the only place that was hiring was WalMart and there was a lot of competition for those jobs! I’ve also had a few friends for whom it would have cost them money to take a job (transportation+childcare, mostly, even for two-parent families).

Underemployment is probably a bigger issue I’ve seen with my age (20-30) even than unemployment. I’ve seen a lot of my friends trapped in jobs that are giving them 30-35 hours a week with no benefits. That’s the sort of blue collar jobs available. Good luck if you went into debt for your college degree thinking it would get you a job at the end.

 

[SamH]

Underemployment is probably a bigger issue I’ve seen with my age (20-30) even than unemployment. I’ve seen a lot of my friends trapped in jobs that are giving them 30-35 hours a week with no benefits. That’s the sort of blue collar jobs available. Good luck if you went into debt for your college degree thinking it would get you a job at the end.

And if you looked at the report carefully that is where nearly all the private sector jobs came from when the government “revised” previous months to claim unemployment went down.