The Real Unemployment Rate: At Least 13.9%

[Sama'el]

Actual unemployment rate 13.9%: Merrill Lynch (http://www.financialweek.com/apps/pbcs.dll/article?AID=/20090206/REG/902069980/-1/FWDailyAlert01)
Counting the ranks of “underemployed” as a result of cutbacks on hours, the unofficial rate hit the highest level in at least 15 years, according to economist David Rosenberg

By Ronald Fink
February 6, 2009 12:48 PM ET

A Merrill Lynch analysis of the non-farm payroll numbers released on Friday makes for disquieting reading, to say the least.

The analysis by North American economist David Rosenberg indicates that the actual unemployment rate, while normally higher than the official one by the Bureau of Labor Statistics, hit a level not seen since at least 1994. The good news: Inflation is not much of a threat as a result.

As Mr. Rosenberg explained, what the official unemployment rate misses is the vast degree of ‘underemployment’ as companies cut back on the hours that people who are still employed are working. Those hours have declined 1.2% in the past twelve months.

The BLS still counts people as employed if they are working part-time, but the number who have been forced into that status because of slack economic conditions has ballooned nearly 70% in the past year, according to the study. Mr. Rosenberg said was that was a record growth rate for the 15-year period he has studied.

When that amount of slack in employment is taken into account, Mr. Rosenberg found that the ‘real’ unemployment rate has actually climbed to 13.9%, an all-time high for the period he studied, and up from 13.5% in December and 11.2% a year ago.

As a result, the economist said worries that the federal deficit will lead to inflation anytime soon are misplaced.

“With this amount of excess capacity in the jobs market, and keeping in mind that the inflation process is dominated by the direction of labor costs, it is tough to believe that inflation at this point is anything but a far-in-the-distance prospect,” Mr. Rosenberg wrote. “A present-day reality it is not.”

Since I know you're not going to read the article, I've decided to bring along a handy visual aid to show to you just how they cook the numbers to underreport unemployment.

http://www.mint.com/blog/wp-content/uploads/2009/01/unemploymentratemint2.jpg

[Utopia Realm]

Our problems seem really bad right now. At least it can't get worst.:( But then again, I know it will.:cry

[saprobe]

I've always wondered why, officially, "unemployment" had such an impractical definition. The state says you're only unemployed if you are actively seeking work and you don't make any money at all. So, of course people like my sister who has worked about 3 weeks in the last three months are still technically "employed." People who have been seeking work for so long that they've given up are also not counted.

This became a real issue here in Washington state when the dot com bubble burst in the early 00's. The state got blindsided by unemployment claims because it didn't have a realistic view of how bad the situation was.

[Sama'el]

I've always wondered why, officially, "unemployment" had such an impractical definition. The state says you're only unemployed if you are actively seeking work and you don't make any money at all. So, of course people like my sister who has worked about 3 weeks in the last three months are still technically "employed." People who have been seeking work for so long that they've given up are also not counted.

This became a real issue here in Washington state when the dot com bubble burst in the early 00's. The state got blindsided by unemployment claims because it didn't have a realistic view of how bad the situation was.

They've never given a reason for the changes to the formula. In fact, it probably was not announced and most people didn't even realize it. Unofficially, of course, it exists to depress the amount that the state has to pay out in unemployment benefits, and make the reigning government look better.

If they reported the real rates, the whole government would be tossed out on their asses. That is, if they managed to escape the lynch mobs.

[Adonis]

That is, if they managed to escape the lynch mobs.

Perhaps black people could be on the fun end of a lynching for once.

[Sama'el]

Perhaps black people could be on the fun end of a lynching for once.

I think this will be a lynching event that will be fun for all races and creeds.

[martryn]

Unofficially, of course, it exists to depress the amount that the state has to pay out in unemployment benefits, and make the reigning government look better.

Well, yeah, it's a drain on us because so many people take advantage of unemployment. So yeah they make it harder to draw it. If we lived in an honest world, we could have some honest policies.

[Sama'el]

Well, yeah, it's a drain on us because so many people take advantage of unemployment. So yeah they make it harder to draw it. If we lived in an honest world, we could have some honest policies.

We also have 4 times the resources today to allocate unemployment benefits than we did in the 60s, yet we offer it to substantially less people. This wasn't something done to help ordinary Americans, this was done at the behest of a class of people who will never be on unemployment in their lives.

Business interests don't want workers to have a safety net because it gives them more bargaining power in determining the terms of the labour contract.

[Tokoyami]

So things are worse than the depression was when it started......and unemployment can be used for people that don't need it...

Sigh.......THANKS FOR RUINING MY EVENING!!!

[Chee]

No wonder I can't get a job. :-(

[martryn]

We also have 4 times the resources today to allocate unemployment benefits than we did in the 60s, yet we offer it to substantially less people.

There are also a substantial amount of people who take advantage of it.

his wasn't something done to help ordinary Americans, this was done at the behest of a class of people who will never be on unemployment in their lives.

A class of people that are also paying for unemployment. And were tired of seeing their tax dollars go to support people who were taking advantage of the system.

Business interests don't want workers to have a safety net because it gives them more bargaining power in determining the terms of the labour contract.

Yeah. I'm sure that's what it is. Tell me, what is the American government doing right, and why are you still here if it sucks the big one and is out to get us. Don't they have communist nations that are closer to your cup of tea?

[Sama'el]

There are also a substantial amount of people who take advantage of it.

Not that many.

A class of people that are also paying for unemployment. And were tired of seeing their tax dollars go to support people who were taking advantage of the system.

They're also the biggest recipients of federal and state subsidies in the US. Unemployment benefits are counted in mere billions of dollars. The amount of public money that goes to the hands of the owning class is measured in trillions

Yeah. I'm sure that's what it is. Tell me, what is the American government doing right, and why are you still here if it sucks the big one and is out to get us. Don't they have communist nations that are closer to your cup of tea?

This is not about me. This is about an entire class of people in the United States who are oppressed and exploited in a system that threw them overboard the moment they stopped militantly defending their economic interests. Even if there was somewhere a person could run to escape the global capitalist system (there isn't) I still wouldn't be leaving. These are my people, and I understand that when it comes to class antagonism, an injury to one is an injury to all.

[Cirus]

After reading that, I hope I get one of the jobs I am applying for overseas. Cause this whole thing is only going to get worse and I don't want to be around for it.

[PerveeSage]

seems to me that recession=depression where nobody is that depressed.

[narutosimpson]

^ you aren't depressed but i bet the 10-20% unemployed are pretty miserable, killing their families, suicidal and junk.

Govt massages alot of numbers like that. Inflation at 6-7%? try double :zaru

[Sama'el]

Wow. A thread accusing the government of lying to us hardly draws a whimper. Has it become so common place that it's now just accepted as natural?

[FreshBaked]

Wow. A thread accusing the government of lying to us hardly draws a whimper. Has it become so common place that it's now just accepted as natural?

Jello, we just came out of an 8-year Bush regime.

[horsdhaleine]

Wow. A thread accusing the government of lying to us hardly draws a whimper. Has it become so common place that it's now just accepted as natural?

The government - in any country - always lies furnishes the truth. :zaru
And they do it for a reason, a lot of reasons.

[Sefarian]

Jello, we just came out of an 8-year Bush regime.

Seconded. And it's things like this that give me anxiety attacks when I'm trying to sleep. :notrust

I'd read about this (well, the U6 at least) on and off for quite some time, I'm surprised that this is actually news to alot of people. :huh

[wiggely]

i'm sorry this is bull.
first:
Wow. A thread accusing the government of lying to us hardly draws a whimper
why would the government lie to us about the level of unemployment? i mean seriously. how does this lie benefit the gov, cause i don't see how it does. they have no reason to lie about this

second:
we have all the smart economists saying one thing, and then this one guy saying something else. why are we paying attention to the one guy out of thousands?

third:
who is this one guy?
A Merrill Lynch analysis of the non-farm payroll numbers released on Friday makes for disquieting reading, to say the least
oh that's right he works for merril lynch, a company that just used 3.6 billion of their 26 billion from the bail out to give top employees bonuses. oh yes their real trust worthy over at merril lynch.

yeah, i don't think this one uncredible source is enough to prove anything

[Dionysus]

^ Take a look at the method the US government uses to calculate unemployment. It's been known for years that it is misleading. (This problem existed before Bush.)

[Mibu Clan]

I knew of this quite a while ago, its good for there to be a real article on it...

Did people really trust the 7.8% figurer lulz :gar

Now its time to see the real inflation rates... :zaru

[Jetstorm]

It really is a wonder that this thread hasn't gotten more attention. :wha

But what can I say? I honestly don't trust the government all that much with a lot of things. Especially after Bush had his reign of 8 years which sent everything to hell in a hand basket.

I don't think the way of calculating unemployment will be changing anytime soon until angry mobs start showing up. :hmm

[Sama'el]

I knew of this quite a while ago, its good for there to be a real article on it...

Did people really trust the 7.8% figurer lulz :gar

Now its time to see the real inflation rates... :zaru

With unemployment between 14 and 17 percent, you're not going to have inflation. If anything, you're going to have deflation.

[narutosimpson]

^ the point is that whatever the inflation rate is , even 0, you can bet that it's not accurate.

[Gamma Akutabi]

I expected it to be closer to 15%. Glad it wasn't(though this number doesn't look much better).

[E]

that's sum crazy shit yo