Posted on 10/02/2009 7:07:18 PM PDT by SeekAndFind
Job losses moderated in August, but the unemployment rate ticked up 0.1 percentage point to 9.8%, the highest level since June 1983.
But another more comprehensive gauge of unemployment ticked up even more. The government’s broader measure, known as the “U-6"; for its data classification, hit 17% in September, 0.2 percentage points higher than August.
The comprehensive measure of labor under-utilization accounts for people who have stopped looking for work or who can’t find full-time jobs. The U-6 figure is the highest since the Labor Department started this particular data series in 1994. But, similar to the headline unemployment rate, it likely isn’t as bad as it was in the 1980s. U-6 only goes back to 1994, but a discontinued measure has a longer history. That old U-6 measure peaked at 14.3% in 1982. Through some calculation, a comparable measure can be determined in the current report. Under the old U-6 methodology, the September rate would be 13.5%, the highest rate since 1983, but still below the peak.
Still, the elevated U-6 rate gives a clearer picture of the broader employment situation. The 9.8% unemployment rate is calculated based on people who are without jobs, who are available to work and who have actively sought work in the prior four weeks. The “actively looking for work” definition is fairly broad, including people who contacted an employer, employment agency, job center or friends; sent out resumes or filled out applications; or answered or placed ads, among other things.
(Excerpt) Read more at blogs.wsj.com ...
The U-6 figure includes everyone in the official rate plus “marginally attached workers” — those who are neither working nor looking for work, but say they want a job and have looked for work recently; and people who are employed part-time for economic reasons, meaning they want full-time work but took a part-time schedule instead because that’s all they could find.
U-6 is the more realistic figure of how serious our jobless rate is.
Question to the Economics majors out there --- Did they have a similar measure in the 1930's ? If so, what were the U-6 figures then ?
The Cloward-Piven strategy is working just the way BO planned.
Right...keep the masses begging.
FYI, Greta is covering this right now on FOX
It’s too bad we had to learn it the hard way but community agitators DO make crappy presidents.
U6 Unemployment, like soldiers and civilians slaughtered in a war, is ONLY important if a Republican is in charge. Thy are meaningless when a Democrat has power.
The unemployment rate during the Great Depression got as high as 25%. This essentially counted the male head-of-household work force. Some industrial cities of what we now call the Rust Belt had much higher local unemployment than 25%.
http://encarta.msn.com/media_461546193_761584403_-1_1/unemployment_during_the_depression.html
How can business function with a marxist in the wings?
How can the economy in general function when no one believes in the “leader”?
I have spent my career in the US Oil and Gas industry. I lost my job under Bill Clinton. Now under Hussein Obama, I have lost it again! THANKS, Democrats!
The old measure should most closely resemble our current U-6.
U-3 is a Clinton era innovation, which naturally made unemployment during his watch appear lower.
1. The BLS issued the sort of unemployment stats with which we’re now familiar starting in 1948. To achieve the “statistics” of the unemployment during the 1930’s, *one* economist from the BLS, Stanley Lebergott, went back to estimate and re-create it - in the 1960’s.
2. His metrics for “unemployment” were far different than we use today. For example, men in the military, men in prison — which we exclude today, were part of his “employable” population. Further, the age at which a man was considered part of the employment pool was 14, whereas today we use 16.
3. He didn’t consider the part-time and government-generated jobs to be “employed” — ie, if you were working on one of FDR’s shovel gangs a couple weeks here, a couple weeks there, you were not ‘employed.’
Ergo: the unemployment figures of the 1930’s are inflated vs. how we would think of unemployed today using today’s BLS metrics. If we look at the BLS-U6 as being the closest we can approach the 1930’s metrics, and we exclude those men in the military or prison as well as 14/15 year olds, we might bring down the unemployment in the 30’s by about three to four percent. Let’s use a SWAG and say that at the peak, the Depression unemployment measured per today’s U6 might have been about 21 to 22%, if we excluded people employed at temporary jobs created by FDR’s schemes.
What is it with dems? Are they all crooks?
You’ve got it backwards: the U-6 indicator was created during the Clinton administration. U-3 has been around since 1948, but the idea of “who is in the market for a job?” has been changing - first in the 80’s and then in the 90’s.
I think the best employment indicator that one could use to determine the depth of the economic downturn is the number of compensated hours worked per week. Look under “Hours of work(3)” in the BLS report. You’ll see that as of this month, the private sector hours worked per week is down to 33.
If you go here in the BLS web site:
ftp://ftp.bls.gov/pub/suppl/empsit.ceseeb2.txt
You get all manner of weekly hours worked and wages over the years.
Now, while a difference of an hour worked per week might not seem much to you (because you can likely work more or less than 40 hours per week easily most weeks, and by an hour), the national average is MUCH more difficult to move. What we see in the decline in hours worked in the last year shows the part-timing of the workforce in order for businesses to reduce labor costs without firing people.
I scratched out a quick back-of-envelope computation earlier this year and reckoned that if employers across the nation fired people instead of part-timing them, we might have as many as an additional 3 million people laid off. The people left would see their hours worked go up (in some cases, substantially).
This is why I believe that when the recovery starts, it will be a long time before employers start to hire again. There is substantial ready-to-work labor available in their existing employees - merely by giving them their full hours of work back again. And even then, with the burdened cost of employment now, it will probably be efficacious for employers to pay overtime rather than hire new employees for awhile after they reach full use of their currently part-time employees.
It always seemed a bit alien of a concept to me to “stop looking for work”.
I’m not sure I really understand it.
Astute point. I read recently that the method used to calculate unemployment in the 30s is roughly the same as the U6 measure and that today’s unemployment rate is closing in on the GD unemployment high water mark.
I think the best employment indicator that one could use to determine the depth of the economic downturn is the number of compensated hours worked per week.How do they manufacture *these* numbers?...
You get all manner of weekly hours worked and wages over the years.
Do they (BLS) REALLY have any idea how many hours some of us work (BUT do not report)?
Maybe this is accruate for stragiht-hourly types, no way for the white-shirt-and-tie crowd ...
Read: off the radar, underground economy.
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