Undercounting the Unemployed

by Mike DeRosa

Every month the U.S. Department of Labor calls 60,000 households in the United States to determine who is employed and who is unemployed. The unemployment rate that is announced every month is mostly based on this survey. What you may not know is that anyone who works one hour a week is considered employed by the U.S. Bureau of Labor Statistics. The people collecting unemployment insurance are not counted because about only 35% of the unemployed are eligible for unemployment insurance in the U.S. According recent unemployment figures only 5.6% to 5.9% of the U.S. working force is considered unemployed (roughly 8.7 million people).

According to Helen Ginsberg, a professor emeritus of economics at Brooklyn College ( www.njfac.org ), the real unemployment figure may be double the 5.6% to 5.9% figure. Some economics think that real number of unemployed, those without jobs who would like to work, is closer to around 18 million people in the U.S.

Many of the uncounted unemployed are working part-time because they can't find a full-time job (roughly 4.9 million workers). Other workers who want jobs are not counted in the official statistics because they are not actively looking for work (discouraged workers) because there are few or no jobs in their field (roughly 4.5 million workers).

The U.S. Department of Labor does have a measure that covers these "discouraged workers" and they call this the U-6 level (it is separate from the official rate). These so-called "discouraged" workers could include computer programmers who cannot find work because the work is being shipped overseas, people who have no childcare, and a variety of other situations that are standing in the way of employment. Then there are people who are so-called independent contract workers ("1099 workers") who are rarely counted and other groups within the labor force who want work but are not counted for a variety of reason. Ginsburg and other economists think that the real unemployment rate is closer to 11.6% to 11.9% of the labor force (roughly 18 million people). Other economists think the real unemployment rate may be even a bit higher.

According to the Bush administration, the U.S. is in an economic recovery. The corporate press keeps reporting this "recovery" to the American people. Recently, the absence of job growth has become an issue in the presidential campaign, but few objective details are available from the corporate mass media.

Many critics and economists call this a phony recovery because it is an economic recovery without jobs. The Bush administration promised that as a result of the recent tax cut 306,000 new jobs would be created each month though the so-called Jobs and Growth Plan that was initiated in June 2003. Since July about 350,000 new jobs have been created over a period of about seven months. Only 20,000 jobs were created in the most recent monthly totals. This means that the Bush administration has a short fall of over 2,000,000 jobs based on its own projections. Lawrence Mishel, President of the Economic Policy Institute has stated that "we need 150,000 jobs per month just to maintain unemployment at the current level and to keep up with the population entering the workforce, and we haven't seen that amount of growth in two and a half years."

Minority unemployment rates are far worse than the national figures. African American recent unemployment rates were around 10%, double the White rate of around 5%. Latino rates were around 7%. African American teen-agers (16-19 years) had an unemployment rate near 28%.

In a city like Hartford, these unemployment rates are the cause of much misery and unemployment rates this high are helping to destroy our inner city. Good jobs that pay a decent wage and offer security and benefits are hard to find in the age of Bush 2. This month's labor statistics indicate job growth in restaurant work. Unfortunately most of these jobs are at fast food outlets that offer low pay, insecurity, few benefits, and little advancement.

According to Heather Boushey of the center for Economic and Policy Research, "the nominal wage growth has virtually stopped; the average hourly wage is up by only $.01 since August 2003." So the average worker has seen a 1-cent increase in his or her pay while the richest 1% of the population has recently gotten billions of dollars through a tax give away.

As the U.S. squanders its national fortune on an military adventures in Iraq, Haiti (and soon Venezuela) and fights a "war on terrorism" that we are told may never end in our lifetime. Our economy is systematically being destroyed by a reverse Robin Hood mentality that materializes itself in massive tax cuts for the top 1% of our society—from the Bush administration—while the rest of us get a couple of hundred dollars a year in tax breaks. While job development and creation by the U.S. government are ignored as solutions to our unemployment problem, Halliburton corporation (vice-president Dick Cheney's old company) and Bechtel corporation are given no-bid contracts in Iraq that are taxpayer rip-offs and massive paybacks to George Bush's friends.

Wars, present, past, and future are destroying our economy and wasting our resources. Many economists note that building weapons of war creates the least number of jobs for the money. Wars also create massive debt that makes progressive legislation that creates jobs "unaffordable".

Many economists think that what is needed is a national program for full employment in the U.S. These same economists think that a sustainable economy is the best way to create secure jobs that pay a living wage, have adequate benefits, and provide real opportunity for future growth. Full employment means more than just creating jobs, it means recreating our economic system, and creating a system where people count and justice prevails.

Mike DeRosa is a co-chair of the Connecticut Green Party.