Tag Archives: underemployed

The BIG LIE re: U.S. unemployment figures

By Chris Horton

In case you missed it, the headline on Gallup CEO Jim Clifton’s blog for Feb. 3 reads: “The Big Lie: 5.6% Unemployment.” https://www.linkedin.com/pulse/big-lie-56-unemployment-jim-clifton

The “5.6% Unemployment” Clifton refers to is of course the December official (U-3) Unemployment Rate from the US Bureau of Labor Statistics (BLS).

He goes on to argue why this measure is misleading and destructive, and concludes:

“There’s no other way to say this. The official unemployment rate, which cruelly overlooks the suffering of the long-term and often permanently unemployed as well as the depressingly underemployed, amounts to a Big Lie.

“And it’s a lie that has consequences, because the great American dream is to have a good job, and in recent years, America has failed to deliver that dream more than it has at any time in recent memory. A good job is an individual’s primary identity, their very self-worth, their dignity — it establishes the relationship they have with their friends, community and country. When we fail to deliver a good job that fits a citizen’s talents, training and experience, we are failing the great American dream.

“Gallup defines a good job as 30+ hours per week for an organization that provides a regular paycheck. Right now, the U.S. is delivering at a staggeringly low rate of 44% , which is the number of full-time jobs as a percent of the adult population, 18 years and older. We need that to be 50% and a bare minimum of 10 million new, good jobs to replenish America’s middle class.”

Most people struggling with this job market agree with Mr. Clifton’s characterization of the Official Unemployment Rate as a Lie.

Today’s figure is “little changed at 5.7%.”

Whatever, we can’t attach it much meaning, not just because it’s misleading, but because changes in it are so strongly affected by people giving up their job search or re-entering the job market based on nothing more than discouragement or hope.

The proclamation and use of these numbers is a disaster at many levels, not least because they are being used to drive policy and budget decisions being made right now by our new Governor.

A better set of statistics from the BLS, which however do not address the quality of the jobs that Mr. Clifton refers to, is the Employment Population Ratio.

Today’s BLS Release for January gives the Employment-Population Ratio for the US Working-Age Population (age 16+), expressed as a percent, as 59.3%, up from 59.2% in December, 58.1% in January 2014, but down from 64.6% in January 2000.

I agree the trend over the past year has been somewhat encouraging, but as the graph below shows, this is at best the bare beginnings of a recovery. And this 59.3% figure is directly comparable to the Gallup Good Jobs statistic, currently at 44%.

The BLS does not calculate the Employment-Population Ratio for prime earning years (age 25-54), but does report the seasonally-adjusted number of persons employed.

This was reported as 96.5 million employed in January, up from 96.0 million in December and 95.2 million in January 2014, but still down from 100.7 million in January 2007!

These numbers are a disaster any way you cut them, and for people who should know better to call this a recovery is a Big Lie.

Chris Horton is lead volunteer organizer for the all-volunteer Worcester Unemployment Action Group.