Counting the "Invisible Unemployed," the U.S. Unemployment Rate Now Above 11 Percent

I'm A Pundit Too ^ | 11/14/2010 | Doug Ragan

[TheNewPundit]

In case anyone needs another reason for extending all of the 2001 and 2003 tax cuts, look no further than the continued difficulties in the U.S. job market. October 2010 marked the 18th consecutive month the official U.S. unemployment rate was stuck above 9 percent. Meanwhile, 48 out of 50 States have lost jobs since Democrats’ trillion-dollar 2009 stimulus plan.

Yet as bad as those official conditions are, the Chairman of President Obama’s Council of Economic Advisors, Austan Goolsbee, suggests matters are actually much worse. At least Goolsbee made precisely that argument in 2003 when the occupant of the White House was from the other party. In a November 30, 2003 New York Times op-ed titled “The Unemployment Myth,” Goolsbee argued that “the government has cooked the books…in order to reduce the unemployment rate.” How? By failing to count “the invisible unemployed” among the official unemployed. By not counting those who have stopped looking for work, including those who applied for government disability payments, Goolsbee maintained that the unemployment rate in 2003 – which officially peaked above 6 percent – was significantly understated: “if you correctly accounted for all of these people, the peak unemployment rate in this recession would have probably pushed 8 percent.” Goolsbee summed up by saying that “The situation has grown so dire, though, that we can’t even tell whether the job market is recovering.”

[proxy_user]

This is a very difficult area. There are many people who are students, housewives, retirees, etc. As we saw in the 90s, if the economy is very strong, unemployment is low, and wages are high, they might be drawn to look for work.

So where do you draw the line?

[GreaterSwiss]

It’s called the U6 rate and is at 17%

[MATSEVAH]

What A lot of people do not take into mind is the people that not filing for unemployment , or cant for some reason I’m a electrician in west virginia and the jobs are next to nothing, I really believe they what the economy to drop of the ledge that way people will work for 7-8 dollars a hour, that s what happens when everything goes across sea’s I sure the true unemployment is way above 10%

[E. Pluribus Unum]

A "jobless recovery" is Lib-speak for "I've got mine. Screw you."

[BipolarBob]

If they’re not on active unemployment status, then they are not counted. If unemployment runs out (24 weeks here), people go homeless or move in with relatives/friends then they are not counted. I’m sure unemployment is WAAY above 10%.

[Logical me]

Wow, 11%!!!!!! Here in California at least half of the work force is looking for work or are so underpaid they cannot survive this tax crazy State. The only ones that are surviving are the civil service workers. (correction: some civil service worker ARE underpaid, but at least they are working) Some of my neighbors are going under and signs like “for sale by bank” are appearing and have been for months.

[proxy_user]

The official unemployment rate is not based on who is collecting unemployment compensation, but rather on a phone survey conducted by the Bureau of Labor Statistics. They explain their methodology in their FAQ:

http://www.bls.gov/cps/cps_htgm.htm

They are probably pretty accurate within their definitions. The ‘U6’ number refers to people who are working part-time, but would rather have a full-time job, but cannot get one. The regular unemployment statistics count those who did not work any hours, were available for work, and were actively seeking work.

An issue that they don’t really address is people who have their own business, but currently don’t have any customers. I’m not sure how they would count them.

[chris_bdba]

I’d bet it is much higher than that! Especially in certain pockets like SE Ohio and eastern WV.Her we never recovered from Clinton’s clean air policy.I’d almost bet that around here that if you took a look at 10 households 4 of those would be on foodstamps or assistance or both.

[Chode]

~25% and they'll prolly start to turn feral ...