According to numbers released by the Bureau of Labor Statistics (BLS), the nonfarm payroll employment rate in May 2012 was up only 69,000 jobs resulting in a monthly unemployment rate that was essentially unchanged at 8.2%. In addition, April 2012 employment figures were revised down from 115,000 jobs being added to only 77,000 jobs added, leaving the unemployment rate for April at 8.1%. The overall monthly unemployment rate as reported by the BLS has remained largely unchanged for most of 2012.
Unfortunately, the typical unemployment rates reported by the Bureau of Labor Statistics and the mainstream media only gives us part of the story and doesn’t show the true extent of the serious unemployment and under-employment problem that exists in this country.
The unemployment rates reported by most media outlets use the measure of unemployment called the U1. The U1 is calculated as the percentage of the labor force unemployed for 15 weeks or longer. This measure significantly understates the real unemployment rate which is more accurately portrayed in the U6 calculation.
The U6 unemployment rate is defined as the ‘official’ unemployment rate, plus ‘discouraged workers’ who believe there is no employment for them, ‘marginally attached’ workers who would like to work but have not looked for work recently and part time workers who wish to work full time but are unable to secure full time employment.
Despite the fact that the U6 is much more representative of the real jobs situation in the United States, the Obama administration and mainstream media seldom report the U6 unemployment rate because it looks too scary. Let’s compare the two for May 2012.
For the month of May, the total labor force included 155,007,000 persons. If the U1 is at 8.2%, that means that there were 12,710,000 people out of work in May. Let’s compare that to the U6 which was 14.8%. That would mean that there were really over 22,940,000 people out of work. The ‘official’ figure understates the ‘actual’ figure by over 10 million people.
Consider that actual unemployment is close to double what is being reported. Now that is quite an understatement.
We also need to take a moment to put that U6 number into perspective. Under the U6, there are nearly 23 million unemployed workers. That number is equal to the entire populations of Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming combined. Stunning, isn’t it?
Another interesting tidbit hidden in the figures is the length of unemployment. According to BLS statistics, nearly 43% of the jobless qualify as “long term unemployed” that have been out of work for 27 weeks or more. That means that nearly 10 million people qualify as long term unemployed. That represents something like 6.3% of the total workforce. Another very scary number.
The numbers reported by the administration also do not tell the entire story of who is being most effected by unemployment. The people that are taking the brunt of the downturn in jobs are African Americans, Hispanics and young men.
The official unemployment rate for men between 20 and 24 years of age is a whopping 14.1%. The unemployment rate for Hispanic workers is 10.4%. The rate for African Americans is 11.8%.
You’d think that with the groups traditionally supporting Obama taking the worst of it, their support for him might begin to waver. The unemployment rates for these three groups haven’t changed remarkably in the last year. They are all within a percentage point or two of where they were a year ago.
Bottom line, unemployment is much worse than it is being reported by either the Obama Administration or the mainstream media. While they would have us believe that there is a recovery going on and the jobs situation is improving, the numbers just don’t support what they are telling us.
Isn’t it time they told us the truth and actually started doing something about it? Or maybe we need to give someone that has a real background in business and job creation a crack at it in November.