Gallup CEO: The real unemployment rate is much higher than 5.6%

This is a striking column from Jim Clifton, CEO of the Gallup polling company. His claim about the real unemployment rate is going to come as no surprise to most of my regular readers, who are used to me pushing labor force participation as the real measure of unemployment. Still, it’s nice to get some confirmation from high places.

He writes:

Here’s something that many Americans — including some of the smartest and most educated among us — don’t know: The official unemployment rate, as reported by the U.S. Department of Labor, is extremely misleading.

Right now, we’re hearing much celebrating from the media, the White House and Wall Street about how unemployment is “down” to 5.6%. The cheerleading for this number is deafening. The media loves a comeback story, the White House wants to score political points and Wall Street would like you to stay in the market.

None of them will tell you this: If you, a family member or anyone is unemployed and has subsequently given up on finding a job — if you are so hopelessly out of work that you’ve stopped looking over the past four weeks — the Department of Labor doesn’t count you as unemployed. That’s right. While you are as unemployed as one can possibly be, and tragically may never find work again, you are not counted in the figure we see relentlessly in the news — currently 5.6%. Right now, as many as 30 million Americans are either out of work or severely underemployed. Trust me, the vast majority of them aren’t throwing parties to toast “falling” unemployment.

There’s another reason why the official rate is misleading. Say you’re an out-of-work engineer or healthcare worker or construction worker or retail manager: If you perform a minimum of one hour of work in a week and are paid at least $20 — maybe someone pays you to mow their lawn — you’re not officially counted as unemployed in the much-reported 5.6%. Few Americans know this.

Yet another figure of importance that doesn’t get much press: those working part time but wanting full-time work. If you have a degree in chemistry or math and are working 10 hours part time because it is all you can find — in other words, you are severely underemployed — the government doesn’t count you in the 5.6%. Few Americans know this.

There’s no other way to say this. The official unemployment rate, which cruelly overlooks the suffering of the long-term and often permanently unemployed as well as the depressingly underemployed, amounts to a Big Lie.

[…]Gallup defines a good job as 30+ hours per week for an organization that provides a regular paycheck. Right now, the U.S. is delivering at a staggeringly low rate of 44%, which is the number of full-time jobs as a percent of the adult population, 18 years and older. We need that to be 50% and a bare minimum of 10 million new, good jobs to replenish America’s middle class.

Why does anyone think that higher taxes, massive government spending, huge deficits, and 18 trillion national debt would encourage job creators to create more jobs? Only a Democrat voter could believe that making things worse for job creators would actually result in more jobs. And maybe it does – just in some other country, when the companies here tire of high taxes and burdensome regulations and ship their jobs overseas.

Here is the labor force participation graph:

Labor Force Participation 2015
Labor Force Participation 2014

That’s where unemployment really stands – this is what Democrats like Barack Obama, Nancy Pelosi and Harry Reid deliver. The Republicans lost control of the House and Senate in January 2007, and George W. Bush was a good President, but a lousy at vetoing socialist bills passed by Pelosi and Reid. Every dip in the labor force participation from 2008 on should be blamed on Democrats. They were in the driver’s seat, they crashed the car.

 

2 thoughts on “Gallup CEO: The real unemployment rate is much higher than 5.6%”

  1. Isn’t that incredible? It’s actually at about 16% where I live, something most of us know since this is a small area, but those statistics come out and still try to tell us it’s about 8%. The letters to the editor can be somewhat funny, as people try to reconcile what they see on the ground versus the official numbers.

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  2. Yep. I grew up in a town that had textile plants as the primary employment venue for the people there. It will come as no surprise that nearly all of them closed shop (less than 10 years ago) and moved to, you guessed it: China. So the unemployment rate there went through the roof. Needless to say, quite a few people had to leave the area to find work. Those that didn’t went on Unemployment, some of those went to the local community college (paid for by the companies that laid them off in at least some cases, which I find ironic), most of which couldn’t find a job in those fields they studied for without also leaving town (I mean, there’s only so much room in that small town for new nurses and medical office workers). I don’t live there now, but I doubt they’re fooled by the false claims being made about unemployment rates.

    Just so I understand… Only 44% of 18+ year olds are employed (based on the Gallup standard)… meaning our unemployment rate is actually 56%? Yikes…

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