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Elections, Politics

Unemployment reports distort the true magnitude of the problem

Posted: August 24, 2012 at 9:00 am   /   by

On the first Friday of every month, the Labor Department issues the unemployment figures for the previous month. Voters should be aware that the figure is incomplete and grossly low-balls the actual number of Americans without jobs.

Before Election Day, there will be three more unemployment reports – September 7, October 5, and November 2. The last report, detailing unemployment for October, comes out four days before the election on November 6.

We learned early in August that the unemployment rate ticked up to 8.3 percent in July, marking 42 months of unemployment over 8 percent. The 8.3 percent figure represents the total number of persons unemployed as a percentage of the nation’s civilian labor force. It is the “official” unemployment rate. It gets all the headlines.

It may be official according to the Labor Department, but it is a serious distortion of national unemployment. The actual national unemployment rate in July was 15 percent. That figure, also a Labor Department statistic, takes total unemployment and adds people who still want a full-time job but have settled for part time work, the so-called underemployed.  Both groups – unemployed and underemployed — have been job-hunting for a year.

It gets worse. What about those we call “discouraged” workers?  Discouraged workers are the ones who have given up looking for work after 12 months of searching. They have dropped out of the workforce; they are not counted by the government. They simply disappear, an army of the invisible and uncounted unemployed.

Adding the discouraged-invisible workers to the published monthly unemployment figures would surely boost the 15 percent figure.  No one knows for sure because the government does not count them.

It is easy to mislead with statistics. Voters should understand that the Labor Department tells a partial story of unemployment; it drops millions from tabulation entirely. They should ask for the real numbers on the first Fridays of the next three months, the ones leading right up to Election Day. Pay special attention to the report on November 2.

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Unemployment reports distort the true magnitude of the problem