The official unemployment data are notorious for their ability to hide, mislead and distort. The media are notorious for exactly the same thing. This is an article about the actual depth of the unemployment problem in the US at this very moment.
The national unemployment rate ticked down slightly to 5.4 percent in April — a rate not seen since May 2008 — the U.S. Bureau of Labor Statistics recently reported. Although this is welcome news, government statistics mask economic troubles that continue to plague millions of Americans years after the end of the last recession. For starters, the widely-reported “U-3” unemployment rate only includes those who are actively seeking employment. And more and more job-seekers are getting discouraged and giving up the job search altogether. This is why the unemployment rate has declined even as the civilian labor force participation rate has dropped significantly from its peak of 67.3 percent in 2000 to 62.8 percent today — hovering near a 37-year low.
The broader U-6 measure of unemployment, which includes those who want to work but have gotten so discouraged by their unsuccessful job search that they have given up, and those who want to work full-time but have had to settle for part-time work, remains double the U-3 rate, at 10.8 percent. But even this does not provide the full unemployment picture. In 1994, the BLS stopped including long-term discouraged workers, who have been unemployed for more than a year, in its statistics. Reinserting this group would yield an unemployment rate of 23 percent, according to John Williams of ShadowStats.com. A Harris Poll reveals the depths of would-be workers’ despair, finding that fully 40 percent of those unemployed have given up looking for work.
For more than six years, increased government spending and the Federal Reserve’s quantitative easing and zero interest-rate policies have failed to restore prosperity, succeeding only in fostering more debt, reinflating the equity and housing bubbles for the next crash and destroying any incentives to save or eliminate malinvestments. Until these monetary and fiscal policies are reversed, expect more boom-and-bust business cycles, more erosion of lower- and middle-class wealth and more massaged government statistics. [My bolding]
This is seriously a worry. I used to adjust our own unemployment rate for shifts in the participation rate and still look at the number. But we have a bit of a slide but never more than a percentage point. In the US it has fallen by almost five percentage points. That is a large number of people to go missing. But 23% on the old way of calculating the number is astonishing if there is no double counting involved which there may be. But it is much more than 10%.
You really do have to wonder how innumerate the opposition parties are, or even if they are interested in also hiding the reality rather than confronting a problem that may be unfixable, given the nature of politics at the moment. If it really around 20%, it is as bad as it was in the middle of the Great Depression.