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OpEdNews Op Eds    H3'ed 9/11/20

Time for a little truth about the economic crisis: Screwing with the Unemployment Statistics

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Time-lapse video: Hundreds wait in line for assistance with unemployment benefits Watch a time-lapse video of the entire line of people waiting for assistance with their unemployment benefits outside the Kentucky state Capitol in Frankfort, Ky., ...
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By Dave Lindorff

Something is screwy about unemployment numbers out of Washington.

In late July, just before the end of the supplemental $600 weekly checks for people collecting unemployment benefits, the New York Times reported that 30 million were receiving those checks.

That's 30 million laid-off workers who qualified for unemployment benefits, which is not everyone who was laid off, since many people who get work for a wage don't qualify for unemployment compensation.

For example, between mid-March and the end of the first week of May, according to US News, 33 million laid off workers applied for unemploymen t compensation benefits. At least three million of them were denied benefits for one reason or another. That of course doesn't count the people who lost work but hadn't worked enough weeks to qualify and who never even bothered to file. It also doesn't count many "independent contractors" who were not being defined as employees by the companies paying them, which would include many people working as gardeners, roofers, carpenters, in nail salons and as cab drivers. But just for the hell of it, let's just go with that 33 million number, and say that is the number of unemployed in the US.

Now recall that the US has a population of almost 330 million.

How many of those people are working age? We can define working age, for the sake of argument, as 18 to, say, 67. (I'm assuming that latter number, situated midway between 65, when people qualify for Medicare and often decided to retire, and 70, the age when a person can collect the maximum amount of Social Security benefits per month, will balance out.) Using Census Bureau data (which I tinkered with to get the number of 18 and 19 year-olds, as well as of 66-69 year olds), I come our with about 219 million. Now a lot of those people don't get classified by the Bureau of Labor Statistics as part of the labor force either because they are full-time students, or have never worked (stay-at-home parents, for example, with no access to or funding for daycare, or those disabled and unable to work, or already retired), but again for the sake of argument, let's just call them all workers.

Well, what percent of 219 million is 33 million? The answer is 15%. I'd say that means that the US has clearly got an unemployment rate of at least 15%. So what is the BLS saying the unemployment rate is? Well, in their unemployment report f or July, The BLS was listing the jobless rate as being 10.2%. That figure is 50% lower than the percent of workers who are receiving unemployment benefits!

How can that be? It can't. It's just wrong.

Part of the problem is that the BLS, which maybe should be just called the BS, doesn't consider someone to be unemployed and part of the labor force if they have not looked for work in more than a month. But of course, there are good reasons why someone who is able-bodied and who needs a job may not look for one. In an economy like this one, there simply may not be any jobs for certain people with certain skills. In certain parts of the country, if you're not willing to move, you just have to wait for the economy to improve before you'll be able to find a job. Take waiters. With restaurants closed or only able to operate at 25% or 50% capacity, there just aren't as may jobs for waiters or other restaurant staff. That means people with those job backgrounds need to compete with people in other service sector jobs that are also probably not hiring. Under such circumstances looking for work is an exercise in futility.

At any rate, clearly the unemployment rate is at least to 15% just based on the number of people who had jobs and are now eligible for unemployment benefits (at least until those short-term programs run out). But it is actually worse than that because a more honest figure would include those who would like a job if they could find one, or who have a part-time job but used to have, and would like to have a full-time one. The BLS actually has that number. It's called the U-6 unemployment figure. In July it was 18.3% But I suspect it must be higher, because all those 33 million people getting unemployment benefits are required by their state labor departments to be actively looking for a job, so they wouldn't be in that category of worker included in the U-6 figure. That means unemployment or under-employment must really be well above 20% of the working population. I would guess that it's probably close or equal to the 25% unemployment that the US reached during the depth of the Great Depression.

In any event, it's clear that the government is not doing a good job of describing the current economic crisis facing the country and its people in this pandemic-induced depression. And the news media, which for the most point print the monthly and weekly BLS statistics on jobs and layoffs and total unemployment, after putting a positive spin on tiny optics in hiring or drops in the unemployment rate. How under those circumstances can the public and elected officials make appropriate decisions on economic policy, on who to vote for in November and on their own lives (whether to buy a house or a car, or to go to college or have a child, etc., for example).

When the country was in this type of dire situation situation back in 1936, the government, headed by Franklin D. Roosevelt, was creating public jobs to build roads and bridges, develop national parks, build electric networks and dams, was even funding artists, musicians, writers, orchestras, the production of plays, basically anything to get people back to work and earning a paycheck.

Now the government in Washington cannot even see its way clear to pass a bill to hand everyone adult a second $1200 check to help pay the rent or put food on the table.

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Dave Lindorff, winner of a 2019 "Izzy" Award for Outstanding Independent Journalism from the Park Center for Independent Media in Ithaca, is a founding member of the collectively-owned, journalist-run online newspaper (more...)

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