What happens when you add in all of the folks who want to work but have given up looking or can only find something part time? The jobs picture looks even worse.
David Leonhardt and Catherine Rampell in the NYT: The unemployment rate reached its highest point since 1993, and overall employment fell by more than a half million jobs. Yet that was just the beginning. Thanks to the vagaries of the way that the government’s best-known jobs statistics are calculated, they have overlooked many workers who have been deeply affected by the current recession.
The number of people out of the labour force — meaning that they were neither working nor looking for work and that the government did not consider them unemployed — jumped by 637,000 last month, the labour Department said. The number of part-time workers who said they wanted full-time work — all counted as fully employed — rose by an additional 621,000.
Take these people into account, and the job market may be in its worst condition since the early 1980s. It is still deteriorating rapidly, too.
Changes in the way unemployment has been tracked over the decades make apples-to-apples comparisons difficult. We’re nowhere near closer to the 25% rate in the Great Depression, but we’re closer than today’s 6.7% rate would make it seem:
The unemployment rate has been made less meaningful by the long-term rise in dropouts from the labour force. The simple percentage of people without jobs — including retirees, stay-at-home parents and discouraged would-be job seekers — can also be misleading, though. It has dropped in recent decades mainly because of the influx of women into the work force, not because the job market is fundamentally healthier than it used to be.
The labour Department does publish an alternate measure of unemployment, which counts part-time workers who want full-time work, as well as anyone who has looked for work in the last year. (The official rate includes only people who told a government surveyor that they had looked in the last four weeks.)
This alternate measure rose to 12.5 per cent in November. That is the highest level since the government began calculating the measure in 1994.