Many Left Uncounted in Nation's Official Jobless Rate

July 3, 2009 7:03 PM

Paul Solman examines how the number of jobless people who fall outside of official unemployment counts (video) offer a different picture of the nation's economic recovery. Transcript here.

"Who here thinks it's higher than 12 percent, 15 percent, 20 percent? How many people think it's 20 percent?

And 20 percent may not be far-fetched, it turns out, because of two other groups never counted as unemployed. One is those on government disability: 7.5 million Americans, like 57-year-old Bob Zawacki, a Chicago carpenter."

posted by gman (41 comments total)

I wonder how many folks like myself (I'm a subcontractor in the trades) are out of work. We are "Self Employed", last year I had 3 months without any work at all. The little work coming in now is not going to be long lived and I'm already apprehensive about this winter. Times are lean.
posted by nola at 7:14 PM on July 3 [1 favorite has favorites]

Pfft. Palin hijacking Metafilter.
posted by gman at 7:23 PM on July 3

Honestly the "Unemployment" figures are one of the most dishonest, lying statistics produced. If anyone wants them to ever be meaningful, there are so many more data sets that have to be considered its not even funny.
posted by strixus at 7:34 PM on July 3

There are a lot of ways to fudge the numbers. Once your unemployment benefits run out, I think you're no longer counted as unemployed.
posted by Blazecock Pileon at 7:39 PM on July 3 [1 favorite has favorites]

nola:

I was a purchaser in construction supplies. I've been outta work since the middle of December. My company laid off 35% of the workforce - about 120 people. (What really sucks is I was the last one let go.)

I've been in the building trades in one way or the other since 1982. I've seen a few booms and busts in that time, but this is definitely the worst.

Seems like upper management still doing OK, though. Go figure.

I'll second the "unemployment figures are a lying sack of shit" sentiment, also.
posted by Benny Andajetz at 7:44 PM on July 3

There are a lot of ways to fudge the numbers. Once your unemployment benefits run out, I think you're no longer counted as unemployed.

That is only for the unemployment insurance claims figures. As long as you still look for work during the month (and meet the other criteria) you would still be counted in the unemployment rate.
posted by thrako at 7:46 PM on July 3

Once your unemployment benefits run out, I think you're no longer counted as unemployed.

This is true. They also don't count people who have "given up looking for a job".

I read yesterday that if you count everyone out of work right now, the "real" unemployment figure is 16.5%.
posted by Benny Andajetz at 7:46 PM on July 3

people who have "given up looking for a job"

I'd like to know more about these people. What happens next?

a) moving into mom's basement
b) living a life of crime
c) funds exhausted, out on the street, eventual death due to starvation
posted by Rash at 7:55 PM on July 3

Once your unemployment benefits run out, I think you're no longer counted as unemployed.

This is true. They also don't count people who have "given up looking for a job".


No, this is still confusing unemployment insurance claims (which only look at those collection insurance, regardless of job-seeking) and the official CPS unemployment rate, which ignores insurance status and only asks if you are both not working and seeking employment.
posted by thrako at 7:57 PM on July 3

d) realization that the job market isn't open where you live, you have support from others in your life to help you with survival, and you keep an eye on the job ads but know it's going to be a while before things get better.

It's sort of a holding pattern. It isn't that you give up, as in never again. You just come to the informed realization that things aren't good now, but will be in a while.
posted by hippybear at 7:57 PM on July 3 [1 favorite has favorites]

e) tent cities
posted by gman at 7:59 PM on July 3 [2 favorites has favorites]

There are a lot of ways to fudge the numbers. Once your unemployment benefits run out, I think you're no longer counted as unemployed.

When you're self employed you get no unemployment benefits so you never get counted. I don't know what kind of numbers we are talking about but I'm guessing at least a third of all construction jobs.
posted by nola at 7:59 PM on July 3

Also, they really didn't make a case that there is a real problem here. At most they suggested that the reported unemp. rate is lower than a more intuitive measure. Why is that a problem? What are we supposed to compare it to? Previous Mefi posts have made a better case that the bias has grown over time, or is large relative to other countries. I think those comparisons are interesting, this report was a bit lacking.
posted by thrako at 8:09 PM on July 3

When you're self employed you get no unemployment benefits so you never get counted.

Again, this applies only to unemployment insurance claims, which is not the same as the more important unemployment rate (the subject of the video).

Here is a little more about the difference between claim and the UR.
posted by thrako at 8:12 PM on July 3

One percent of our population is currently imprisoned. The lifetime chance of being imprisoned for a felony is 6.6% for the average American. Needless to say, those among us who can't get jobs because of felony records probably add a few percentage points to any estimation of unemployment.

But, yeah, you can always add at least 1% to any unemployment figures thanks to the War on Citizens.
posted by Avenger at 8:25 PM on July 3 [2 favorites has favorites]

Speaking as someone who has conducted research into employment trends and compensation, unemployment figures are just a benchmark, and people who pay attention to the labour market (HR managers, for example), classify 5% unemployment as "full employment". Anything lower than that is a "labour shortage", as these folks and others in government, for example, factor in the "not actively looking for work category" to the 5%.

I think what should really be measured is quality of employment, or at least the median (as opposed to average) individual as well as household income.

The region where I live has had 3.5% unemployment for the past few years, but now we've crept up to 6%. Tourism and service industries can employ a lot of people here, and these industries don't pay well.

The real lie that needs to be exposed: what does it mean to have a low unemployment rate if a large group of workers is barely living about the poverty rate?
posted by KokuRyu at 8:52 PM on July 3 [2 favorites has favorites]

Bureau of Labor Statistics Table A-12: Alternative Measures of Labor Underutilization.

U-6: Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.

June 2009: 16.5%.
posted by WCityMike at 9:02 PM on July 3 [5 favorites has favorites]

I inherited a fair amount of $$, so being an underemployed techie contractor does tend to allow me to wait out times like these in a fairly comfortable way. I used to make well over $100K a year, but it's just not that kind of a job market right now. That said, my investments are actually doing quite well again.

My sister is doing basically the same kind of thing in rural Oregon, where unemployment is just insanely high right now.

So, yeah... the "non-rich but comfortable enough to not have to work all the time" are also part of the statistics. Perhaps we'll retire earlier, but in a rather less lavish manner.
posted by markkraft at 9:15 PM on July 3

I inherited a fair amount of $$, so being an underemployed techie contractor does tend to allow me to wait out times like these in a fairly comfortable way. I used to make well over $100K a year, but it's just not that kind of a job market right now. That said, my investments are actually doing quite well again.

My sister is doing basically the same kind of thing in rural Oregon, where unemployment is just insanely high right now.

So, yeah... the "non-rich but comfortable enough to not have to work all the time" are also part of the statistics. Perhaps we'll retire earlier, but in a rather less lavish manner.
posted by markkraft at 12:15 AM on July 4 [+] [!]

Cool story bro.
posted by lazaruslong at 9:29 PM on July 3 [2 favorites has favorites]

There's another category they didn't discuss-- underemployment. I know it's not "joblessness," but it does say something about the state of the economy when people end up taking jobs for which they are overqualified and where they don't use the education and skills they spent years developing and paying for, because it's the only job they can find...

yeah, I'm a little bitter.
posted by jschu at 9:30 PM on July 3

I inherited a fair amount of $$

This is also a cool story, and cautionary tale.
posted by stbalbach at 9:36 PM on July 3

Once your unemployment benefits run out, I think you're no longer counted as unemployed.

God, no. The unemployment rate is not calculated from unemployment benefits.

This is really simple.

Every month the BLS surveys a very large sample of adult Americans. I can't dig up the exact sample size, but it's between 50,000 and 100,000. Huge, with miniscule margins of error.

If you're surveyed, they ask you whether you worked during a reference week. If you were, or were on vacation or sick or a few other things that week but were employed, you are Employed.

If you didn't work the reference week, they ask you whether you were available for work and have sought work in the past month. If you are and did, you are Unemployed. If you weren't or didn't, you are Not In The Labor Force.

The unemployment rate is this: Take the number of people who are Unemployed. Divide by the number of Unemployed+Employed. Multiply by 100. That is all. Unless there are seasonal corrections that get applied to level out "normal" cycles

It really is that simple. Every month the government contacts a fuckload of people (in absolute numbers, which is what matters for sampling, but a tiny proportion) and just plain asks them about their employment status. There are still lots of problems with this as a measure of employment or recovery, but they flow utterly transparently from the very simplicity of the measure.
posted by ROU_Xenophobe at 9:43 PM on July 3 [4 favorites has favorites]

Tom Paine had the solution:

To create a national fund, out of which there shall be paid to every person, when arrived at the age of twenty-one years, the sum of fifteen pounds sterling,as a compensation in part, for the loss of his or her natural inheritance,by the introduction of the system of landed property:

And also, the sum of ten pounds per annum, during life, to every person now living, of the age of fifty years, and to all others as they shall arrive at that age.

Suppose you'd have to adjust the age limits and sums involved, perhaps best a life-long citizen's wage, what with the massive progress in political thinking since Paine's time.
posted by Abiezer at 9:51 PM on July 3 [2 favorites has favorites]

Oops.
posted by Abiezer at 9:54 PM on July 3

Jobless and looking to save money? Don't be shy about pulling something you like out of the trash.
posted by gyc at 10:12 PM on July 3 [2 favorites has favorites]

The obligation to earn enough money through one's job to provide for oneself and one's family implies a corresponding right to meaningful work that can make ends meet for everyone.
posted by l33tpolicywonk at 10:38 PM on July 3 [2 favorites has favorites]

Please. Unemployment numbers are fairly accurate, people just don't realize to look at U6 (includes underemployed/part-time and discouraged) if they're looking for "people that don't hold a job", it's more the media to blame for not accurately covering unemployment numbers. The government puts those numbers out and very few people are questioning the veracity of U6 numbers (as they shouldn't be).

In any case, U3 (the one the media covers) and U6 aren't relevant for considering when we get out of this recession because they are lagging indicators. Many people trumpet these numbers getting better/worse as a measure of the economy and future job prospects and they are dead wrong. You need to look at the leading indicators. Namely: temp work and hours worked (note both these numbers are produced along with the U3/U6 numbers). The reason that temp work and hours worked are important is because companies don't lay off cleanly: they do it in weird blocks and it doesn't really give a clear indication of intentions. The best measure is hours worked. Questions of part-time and full-time U3 vs. U6, etc. can be ignored and we can look at pure labor demand. As David Rosenberg's report today describes, the troubling aspect of the most recent employment numbers is that "aggregate hours fell so much in June that the decline was equivalent to over an 800k job slice". This is really, really bad in terms of employment and gives a worse picture for labor than U3 or U6. Hours-worked numbers will indicate things getting bad worse or better more accurately and faster than U3/U6. Think about it this way, companies will give people fewer hours before they lay them off, and people will be working overtime before they hire temp workers. It's also a lot harder to fudge and categorize.

More importantly, the labor market may become even more disconnected with GDP, we may replay the post-dotcom jobless recovery in a bigger way, but it remains to be seen at what kind of impact bad labor numbers would have in the beginnings of a recovery.
posted by amuseDetachment at 11:10 PM on July 3 [5 favorites has favorites]

Doing some googling, I found a link to David Rosenberg's report, looks like someone posted the PDF to scribd, the 800k number quote is on the middle of page 3.
posted by amuseDetachment at 11:19 PM on July 3

Once your unemployment benefits run out, I think you're no longer counted as unemployed.
posted by Blazecock Pileon at 10:39 PM on July 3

Yeah, you're just fucked.

It was so much easier to be bitter about these things when Bush was Pres'nit, because we knew it was a conspiracy against the middle class and that someone was cooking the numbers. Now, I can't see the point in it.
posted by vhsiv at 11:32 PM on July 3

Every Administration since Reagan has "adjusted" the way the most-widely-reported Unemployment numbers are collected and calculated to make its economic policies look better. And there are millions of stupid Americans who judge the State of the Economy by those numbers and the Dow Jones Index and decide if they're worse off year after year it's not The Economy, it's themselves. Obama would be a fool to improve the accuracy and honesty of the statistics now (or likely ever), because it would reflect poorly on him, even if, in real terms, he was making things better. Fortunately there is a U-6 statistic that is somewhat more reality-based for those of us who can handle the truth.

That said, I have been laid-off from a job three times in my working life, and all three of them occurred when the Unemployment Rate was dropping (all because of problems or changes my then-employer was going through and not directly related to the economy in general). So I know as well as anyone that "my mileage WILL vary" and "objects in the sideshow mirror are different than they appear".
posted by wendell at 12:15 AM on July 4

Every month the BLS surveys a very large sample of adult Americans. I can't dig up the exact sample size, but it's between 50,000 and 100,000. Huge, with miniscule margins of error.
posted by ROU_Xenophobe at 11:43 PM on July 3 [1 favorite +] [!]

Not to be snarky but how do they interview poor and homeless people who don't have phones?
posted by vapidave at 12:33 AM on July 4

Every month the BLS surveys a very large sample of adult Americans. I can't dig up the exact sample size, but it's between 50,000 and 100,000. Huge, with miniscule margins of error.
posted by ROU_Xenophobe at 11:43 PM on July 3 [1 favorite +] [!]

Not to be snarky but how do they interview poor and homeless people who don't have phones?

Here. The interviewer goes door to door when needed. There is also some adjustment in terms of the sampling and weighting.
posted by thrako at 4:27 AM on July 4 [1 favorite has favorites]

And then there are those NTY unemployed but work fewer paid hour per week as companies cut back. But the issue neglected: will jobs come back or only the economy--that is stock market go up, etc I think not.
posted by Postroad at 4:28 AM on July 4

I probably fall into some odd "laid-off-but-never-counted, under-self-employed, can't file for insurance" group. U6x?

Was laid-off about 4 years ago. Like any self-respecting white-collar worker, decided to immediately go freelance/contractor and struggled at it for a couple of years, all the while looking for full-time employment. And, in doing so, missed the window in which you must file if you want unemployment benefits. Now, freelance has dried-up to where that insurance sure would be nice to have. But, it's not available to people like me.
posted by Thorzdad at 6:26 AM on July 4

[few comments removed - personal attacks need to go elsewhere, or preferably nowhere.]
posted by jessamyn at 6:33 AM on July 4

I had trouble following this argument. Needs more monitors being smashed with sledgehammers.
posted by rokusan at 7:13 AM on July 4 [2 favorites has favorites]

'Unemployment' is just a poor name for the statistic they're collecting. It doesn't measure 'unemployment,' it never has and it never will. Just like the Fed not actually being part of the government the dissonance between the common sense meaning of the name and the reality generates a certain level of "zomg!" when people see it for the first time.
posted by Skorgu at 9:06 AM on July 4

The safest way to estimate the unemployment rate is to double the government figure.
posted by five fresh fish at 9:39 AM on July 4

It's nice to see the MSM talk about this. This info is common knowledge for anyone that reads progressive websites.
posted by e40 at 10:03 AM on July 4

I'm unemployed and have never qualified for UI, and let me tell you, FFFFFFUUUUCCCKKKK.
posted by tehloki at 2:57 PM on July 4 [3 favorites has favorites]

The unemployment timebomb is quietly ticking - ambrose evans-pritchard
posted by infini at 12:51 AM on July 5