REPORT: Tomorrow the Labor Department will release its April employment report. If the rate goes down, the administration will brag a bit, but they won't dwell on it. They know that the unemployment rate does not reflect the actual number of people who need work. Did you ever wonder how many of them are really out there?
Let's put it in pre-recession, real numbers perspective. In July 2007, at the peak of the bling-years boom, there were 146.1 million people employed, 7.1 million unemployed, and 4.5 million working part-time "for economic reasons," which, added to the unemployed, gives the number for "underemployed” (U6). There were 78.7 million people not in the labor force. The unemployment rate was 4.6%.
Last month, in March 2012, there were 142 million employed, 12.7 million unemployed, 7.7 million U6, and 87.9 million "not in the labor force". The unemployment rate is now (supposedly) 8.2%.
With 154.7 million in the labor force, 1% represents about 1.55 million people. The unemployment rate is 3.6% higher, so there ought to be about 5.4 million less people working than five years ago. That's not true. There are indeed 5.6 million more unemployed, but there are also a staggering 9.2 million more people "not in the labor force," most often because they can't find a job. That means the total number of additional people actually out of work compared to 2007 is 14.8 million, or 9.7% of the labor force. Add that to the original 4.6%, and the actual rate of unemployment is about 14.3%. Also, there are 3.2 million more people working part-time jobs because they can't find full-time work. Let’s add. Today, there are 18 million more people not working or unable to find the job they want than in 2007. Add in the original 7.1 million already unemployed in 2007, plus the original 4.6 million U6, and the total is 29.7 million. In a universe of 155 million workers, the real U6 rate is thus approximately 19%. This is all Dept. of Labor data, offering an apples to apples comparison.
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