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View Full Version : The Real Unemployment Rate? Try 15.6%



dbroncos78087
04-07-2009, 02:59 PM
The official US jobless rate, now 8.5%, excludes millions of people -- among them those who have given up on finding work and those forced into working fewer hours than they'd like.

An 8.5% unemployment rate is unmistakably bad. It's the highest rate since 1983 -- a year that saw double-digit unemployment, nearly 30 commercial bank failures and more than 15% of Americans living below the poverty line.

But the real national unemployment rate is far worse than the U.S. Department of Labor's March figure, announced today, shows. That's because the official rate doesn't include the 3.7 million-plus people who are reluctantly working only part time because of the poor labor market. And it doesn't include the workers who have given up scouring want ads for seemingly nonexistent jobs.

Source: MSN Moneycentral (http://articles.moneycentral.msn.com/learn-how-to-invest/The-real-unemployment-rate.aspx?)

Opinions?

blenderboy5
04-07-2009, 03:04 PM
Well that's political spin at best. You can't change the name of the game halfway through... it's ridiculous to say "this is actually worse than 1983 because of these factors," when the numbers from 1983 also don't factor in those not seeking work and those who are underemployed.

Furthermore, I'm reluctant to factor in those who have given up looking for work. While I understand the frustration of going out into the job market, they are still unemployed by choice (after all, most people looking for jobs could still get jobs at a McDonald's, they're just looking for something better/in their field).

To me, the most interesting number is the underemployed Americans though.

ari1013
04-07-2009, 03:32 PM
Source: MSN Moneycentral (http://articles.moneycentral.msn.com/learn-how-to-invest/The-real-unemployment-rate.aspx?)

Opinions?
Underemployment is definitely a problem. The thing is that it's really hard to look at underemployment historically because we've gone through some major changes in our labor market structure.

The biggest change occurred in the late 1960s - early 1980s when married women began entering the workforce. Many of them did so as part-time workers. Even today, you'll have women who have college degrees working part-time only because they've got kids at home that they need to get back to. So it's really tough to get at the true reason for such high underemployment. For the most part, you should expect to see about 3-5% of the labor force underemployed even when the economy is good.

That said, if underemployment and discouraged workers now combine for 7% of the entire labor force that's nearly twice as high as it should be (similar to the 8.5% being a little over twice the 4% we should have in a good year).

Cubsrule
04-07-2009, 03:34 PM
Underemployment is definitely a problem. The thing is that it's really hard to look at underemployment historically because we've gone through some major changes in our labor market structure.

The biggest change occurred in the late 1960s - early 1980s when married women began entering the workforce. Many of them did so as part-time workers. Even today, you'll have women who have college degrees working part-time only because they've got kids at home that they need to get back to. So it's really tough to get at the true reason for such high underemployment. For the most part, you should expect to see about 3-5% of the labor force underemployed even when the economy is good.

That said, if underemployment and discouraged workers now combine for 7% of the entire labor force that's nearly twice as high as it should be (similar to the 8.5% being a little over twice the 4% we should have in a good year).

Has any of the stim money been injected yet?

ari1013
04-07-2009, 03:41 PM
Has any of the stim money been injected yet?
Not really. Money's still being allocated. They're starting work on some projects here in MO but you're not going to really see the effects of people getting hired until the next report.

My expectation is that unemployment jumps to 8.8% next month and then slowly crawls up to just under 10% by September where it'll fluctuate +/- 0.1-0.2% for the next few months until it starts dropping for real in January.

Cubsrule
04-07-2009, 03:42 PM
Not really. Money's still being allocated. They're starting work on some projects here in MO but you're not going to really see the effects of people getting hired until the next report.

My expectation is that unemployment jumps to 8.8% next month and then slowly crawls up to just under 10% by September where it'll fluctuate +/- 0.1-0.2% for the next few months until it starts dropping for real in January.

Best case scenerio whats the biggest drop?

ari1013
04-07-2009, 03:56 PM
Best case scenerio whats the biggest drop?
From the stimulus?

Cubsrule
04-07-2009, 04:01 PM
From the stimulus?

In your opinion yeah.

ari1013
04-07-2009, 05:49 PM
In your opinion yeah.
Well that's why I'm assuming it starts to hold steady around September. We're going to still have some job losses, but we'll also have job gains via the stimulus to make up for them.

Cubsrule
04-07-2009, 05:55 PM
Well that's why I'm assuming it starts to hold steady around September. We're going to still have some job losses, but we'll also have job gains via the stimulus to make up for them.

See that tends to be my biggest worry, even though I am against the stimulus as a whole, is that more jobs will be lost than what it will create.

ari1013
04-07-2009, 09:40 PM
See that tends to be my biggest worry, even though I am against the stimulus as a whole, is that more jobs will be lost than what it will create.
I don't really get that point you're trying to make. Jobs are being lost and they'll continue to disappear even after we see the first few months of positive GDP growth.

But the stimulus will create jobs and that should offset most, if not, all of the job losses.

Seppuku
04-08-2009, 02:18 AM
So Ari, what you are saying is, stimulus= bad vs no stimulus= very bad, and we are choosing bad.

ari1013
04-08-2009, 08:46 AM
So Ari, what you are saying is, stimulus= bad vs no stimulus= very bad, and we are choosing bad.
No stimulus would be depressionary levels IMO. The stimulus will keep this from getting worse than a bad recession.

cabernetluver
04-08-2009, 10:25 AM
No stimulus would be depressionary levels IMO. The stimulus will keep this from getting worse than a bad recession.

Well stated.

PHX-SOXFAN
04-08-2009, 01:28 PM
Well that's political spin at best. You can't change the name of the game halfway through... it's ridiculous to say "this is actually worse than 1983 because of these factors," when the numbers from 1983 also don't factor in those not seeking work and those who are underemployed.

Furthermore, I'm reluctant to factor in those who have given up looking for work. While I understand the frustration of going out into the job market, they are still unemployed by choice (after all, most people looking for jobs could still get jobs at a McDonald's, they're just looking for something better/in their field).

To me, the most interesting number is the underemployed Americans though.

how is elaborating with more info, facts, and numbers political spin and changing the game halfway? All I read is providing more information on the current situation. we don't have the numbers from 83 for underemployment.

I think this is good info that people should know. It's not a contest between now and the early 80's outside of the rightist incessant comparisons to reagan.

dbroncos78087
04-08-2009, 01:47 PM
I think most of you know that i am more liberal than most but i wanted to post this to see what you all thought about it. I think it is more of a statistical thing then it is a left or right issue. How exactly do we get statistics and how reliable can they be in applying them to the entire community.

cabernetluver
04-08-2009, 02:10 PM
I think most of you know that i am more liberal than most but i wanted to post this to see what you all thought about it. I think it is more of a statistical thing then it is a left or right issue. How exactly do we get statistics and how reliable can they be in applying them to the entire community.

Numbers are easy to get, and if gotten from reliable sources, can and will be reasonably reliable. The problem is not in the numbers but instead is in the interpretation of the numbers.

As an example, in this thread, we have written about unemployment numbers, should they include underemployment, is it a true and accurate comparison one way or the other.

I think that historical comparisons without qualification is meaningless. Since this is PSD, I want to use a baseball comparison. If you look at hitters in the past without regard to the change in status of the relief pitcher, some of their late inning performance are going to be better than modern day players. Can one quantify this difference? Should the change of pitchers be considered? In a more modern status, before, during, and after steroids could be considered as differences.

Now if it is employment records, do we look at the period of peak manufacturing and the employment that went with it as the same as our current state of manufacturing. If you worked in a factory and now at McDonald's you are employed. Should the difference in employment be considered?

I am not trying to make a case, I am just trying to point out that in fact, it is the interpretation of the numbers that is most important.