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Chart of the Day: The REAL Unemployement Rate

By JLP | October 11, 2012

This is interesting. You can click on the graphic to go to the source. Bottom line: Unemployment is MUCH HIGHER than we’re being told it is.

The Real Unemployment Rate

Topics: Economic Indicators, Economics | 14 Comments »


14 Responses to “Chart of the Day: The REAL Unemployement Rate”

  1. Money Beagle Says:
    October 11th, 2012 at 2:33 pm

    Pretty much like the inflation rate which would be vastly different for most households when you factor in what matters directly to them. Sorry, when my health care premiums double over the course of two years, don’t tell me that my inflation rate is 1.5% or whatever they say.

  2. BG Says:
    October 11th, 2012 at 3:18 pm

    Money Beagle) Did your premiums really go up, or is your employer just making you pay a larger share of the cost? If the latter, it is not _inflation_ that is causing the increase, your employer is just making you pay more (while they pay less).

  3. BG Says:
    October 11th, 2012 at 3:39 pm

    Time for some definitions on unemployment statistics. The RED part of the graph is the U3 “standard” (useful when comparing countries; ie comparing USA to Germany). The GREEN part of the graph is the U6 (see definitions below). The BLUE part of that graph, who knows — completely made up statistic by someone not in the Burea of Labor Statistics (BLS).

    I don’t know about you, but if people (willfully) are not looking for work — why would you want to count them? But if you do, the BLS gives you those numbers as well.

    U3: Official unemployment rate per the ILO definition occurs when people are without jobs and they have actively looked for work within the past four weeks.
    U4: U3 + “discouraged workers”, or those who have stopped looking for work because current economic conditions make them believe that no work is available for them.
    U5: U4 + other “marginally attached workers”, or “loosely attached workers”, or those who “would like” and are able to work, but have not looked for work recently.
    U6: U5 + Part-time workers who want to work full-time, but cannot due to economic reasons (underemployment).

  4. Jonathan Says:
    October 11th, 2012 at 4:09 pm

    Honestly, I’m more inclined to trust shadowstats.com than the government released statistics regarding inflation, unemployment or other economic data.

  5. Jack Says:
    October 12th, 2012 at 1:03 pm

    Actually, BG, those numbers are in the BLS report, too. They are the full-time employed divided by the working-age population.

  6. Jack Says:
    October 12th, 2012 at 1:04 pm

    The number of people unemployed for more than 52 weeks is also in the report.

  7. BG Says:
    October 12th, 2012 at 2:56 pm

    My wife willfully chooses to be a part time employee, are you saying she is part of that BLUE graph?

    She shouldn’t be counted under any metric…

  8. Jack Says:
    October 12th, 2012 at 5:01 pm

    To be more specific, those 582,000 were only part-time “for economic reasons.” The report provides further breakdowns of that number. That group “Refers to those who worked 1 to 34 hours during the reference week for an economic reason such as slack work or unfavorable business conditions, inability to find full-time work, or seasonal declines in demand.”

    Those with part-time jobs for non-economic reasons, “Refers to persons who usually work part time for noneconomic reasons such as childcare problems, family or personal obligations, school or training, retirement or Social Security limits on earnings, and other reasons. This excludes persons who usually work full time but worked only 1 to 34 hours during the reference week for reasons such as vacations, holidays, illness, and bad weather.”

  9. BG Says:
    October 12th, 2012 at 7:50 pm

    I don’t like these non-U3 numbers, and here’s why: first, if someone isn’t actively looking for work, then they aren’t unemployed — they just simply don’t exist in the labor pool (like someone who is retired). If they want a job, then their full-time job is to FIND A JOB, so should be out actively interviewing, pushing resumes, etc. If they were ‘active’, then they would already be included in U3 figure.

    Now, people who are “only” working part-time, but want a full-time job, should just go get a second part-time job — otherwise they don’t really want to work full-time (they are content, like my wife, with their part-time employment). However, if they are actively spending their spare time trying to secure that better paying full-time job (or second part-time job) then should be counted as ‘underemployed’ — I guess that is U6, but U6 includes a bunch of trash as well.

    Now my rant about the malarkey (newly learned Biden term) that is ShadowStats, the basis for the blue graph. He is counting people who (honestly, not under duress) answered NO to the question: “Have you tried to find work in the past 4 weeks?”, and then he adds people who haven’t had ANY employment (of any kind) in the past 52-weeks.

    That blue graph is counting people who haven’t worked a DAY in the past year, and haven’t made any effort what-so-ever to find a job in the past month! Hell, how long does someone need to not work until you consider them not in the labor force (NILF)?

    Claiming that it is the “REAL Unemployed Rate” is outlandish, and reeks of right wing-nut conspiracy theories.

  10. Jack Says:
    October 12th, 2012 at 9:12 pm

    Actually, BG, they drop off the U3 after 52 weeks. However, they get unemployment for 99. To get unemployment, one MUST provide proof that one is looking for work — contacts at companies you have dealt with in your search. Been there, done that, and I’ll be doing it again next week.

    During my last stint w/o a full time job, I did have part-time work. I spent the rest of my time looking for more work. I finally did get another full-time job. I have also secured another part-time job, but it is only four hours a week. Still, it will count as a job for the U3 numbers. It will pay so little that I will still get unemployment insurance payments, but I will still be employed on the U3.

  11. BG Says:
    October 13th, 2012 at 6:53 am

    99 weeks of collecting unemployment insurance is insane. ld rather see the government using a little extra math to convert these types of things into a linear line.

    For example, instead of paying out 100% every week for 99 weeks, and then the 100th week at 0%, why not change the formula to be: “this week you get 90% of what you got last week” (politicians can argue over the decline rate).

    People could stay on UI for as long as they wanted, but the value decreases the longer they stay on. This builds an automatic incentive to get people out before 99 weeks.

  12. Jack Says:
    October 13th, 2012 at 8:20 am

    Not a bad idea, BG, but the devil is in the details. Let’s look at my own situation. I lost my job last November, and was on unemployment for about a month. I’ll be getting unemployment again next week (unless I can find a job by then). Do we restart at 100%? Perhaps we do a 5% decline each week one is collecting benefits, and a 2% increase each week one is employed (until it gets back to 100%).

  13. BG Says:
    October 13th, 2012 at 8:42 am

    Isn’t the new UI based on your wages of your most recent job? Regardless, I dont care much about the details as long as fraud prevention is built in, and the value of the benefit is constantly decreasing.

    I do like your idea of having to earn “full” UI benefits based on employment history, though I thought the current system had something like that already (someone can’t work 1 day, then collect UI, rinse-repeat).

    Good luck on your job search!

  14. Weston Terry Says:
    October 16th, 2012 at 2:33 pm

    Interesting! I wonder how big of impact this will have on the upcoming election. There are so many different statistics going back and forth on this issue, that I don’t think most people know what to believe.

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