Friday, January 7, 2011

16.7% - Is That the REAL Unemployment Rate?

As we discussed recently, the published unemployment rate (down to 9.4% from 9.8% this month), does not tell the entire story about how many people are unemployed in America at any given time.  That is so because the published unemployment rates take into account only those people who are out of work, want work and have sought full-time work during the past 4 weeks.

The attached article suggests that the real unemploymemnt rate is 16.7%. It reaches that figure by taking into account 1) people that have been out of work for extended periods but have stopped looking for work (because they have become discouraged); and, 2) people who are working part-time (some of whom certainly would want full-time work if they could find it). 

The fact is, perhaps we need also need to take into account people who went back to school because they could not find work, and people who have been forced to start a new business from the ground up because they cannot find work.

In any event, while it is nice to see the published indicators suggest that unemployment rates are down, and they are, the notion that only 9.4% of the eligible working force is unemployed is farcical.

No comments: