The Big Unemployment Lie
The Leftmedia narrative about falling unemployment is phony.
The U.S. economy added 257,000 jobs in January, but the headline unemployment rate rose one-tenth of a point to 5.7%. The broader measure, known as the U-6 rate, also climbed from 11.2% to 11.3%. That’s mixed good news, since slight growth in record-low labor participation likely caused the rate spike. Even when we create jobs in the Obama economy, we seem to lose ground.
One of the problems is that each month’s jobs report pushes the same fraudulent narrative embraced by Barack Obama’s administration since before his re-election. To hear Obama tell it, the country’s current unemployment rate is pretty much back to where it was before the Great Recession. Therefore, the economy is on the mend, and we have the Great One’s policies to thank for it.
None of this is true.
The so-called official unemployment rate that is recorded and made public by the Bureau of Labor Statistics is known as the U-3 rate, but it doesn’t provide the full jobs picture for the country. The U-3 number records only those people who are currently out of work, not receiving any employment income and actively seeking new employment.
Yet there is an alarmingly vast swath of people who aren’t counted in these “official” unemployment numbers. Skilled laborers who have been out of work for a sustained period of time who earn at least $20 in a week are not considered unemployed under U-3. Nor are people working part-time but seeking full-time work to support their families.
Jim Clifford, Chairman and CEO of Gallup, wrote this week, “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.”
In fact, the unemployment rate “goes down” when more people leave the workforce than continue looking for work. So the worse reality gets, the better the headlines can be.
If we want a true sense of the unemployment picture, we should focus on the U-6 rate. This unemployment figure is publicly available, though it never receives the fanfare or public scrutiny that the U-3 number does. Indeed, one has to dig for the U-6 number; the Obama administration would never deliberately bring it up in a press release or a news conference. The U-6 rate is a look at real unemployment – not just those who are out of work, but also those who’ve been out of work so long that they’re no longer counted in the U-3 report.
That’s why we note the U-6 rate every month.
The underemployment picture is even worse. This group, including those mentioned above who are working but not at the level they should be based on skill or economic need, is 15.9%. If you adhere to Gallup’s definition of a good job as 30-plus hours per week with a regular paycheck, then only 44% of the eligible adult population is working full-time. (Stay-at-home moms and certain others aren’t counted in the working population, but 44% is still a shockingly low rate in a supposedly healthy economy.)
Politicians in Washington can’t seem to understand why unemployment is down and people just aren’t “feeling it.” Well, they’re not feeling it because most of them aren’t seeing it. Regardless of the rosy picture that the White House paints with its misleading data, Clifton notes, “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.”
If we continue to gloss over this very real jobs problem, we can’t create the conditions that are necessary for a real economic recovery.
Dictators and leftists often embrace the old saw that if a lie is repeated often enough, it becomes reality. Such is the case with our “official” unemployment rate. The White House embraces it for the sake of political expediency. The Leftmedia embrace it because they love to report good news when there’s a Democrat in the White House. Wall Street embraces it because they want investors to keep buying stocks. And so, the rest of the country is led to believe that all is well and getting better.
The time has come to face the facts as they exist, not as the Leftmedia want us to see them.