Jobless Rate Under-Counts the Unemployed
Your article, “First-Time Jobless Claims Hit a Two-Year Low” (Nov. 13), goes on to say that the unemployment rate dipped 1% to 7.4% (in the week ended Oct. 31). I believe the article gives your readers a false impression of our nation’s current unemployment situation.
When the average American reads an article that gives an unemployment rate, either for total claims or new claims, as calculated by the U.S. Bureau of Labor Statistics, they are not getting the whole picture. When your readers see an unemployment rate of 7.4%, they take that to mean that 7.4% of Americans are unemployed at that moment. This is a serious misrepresentation.
The unemployment rate as calculated by the bureau has a very narrow definition of who it considers eligible to be counted as unemployed. For example, those who have lost their jobs and have been forced to accept substantially lesser positions for less pay are not counted. Part-time workers, defined as working even one hour a week, are considered employed and are not counted.
The increase in costs of employee benefits, such as health care, and forced government employee taxes, such as unemployment insurance, payroll taxes and workers’ compensation insurance, have made many employers resort to hiring part-time workers as opposed to full-time. Some Americans are working three or four part-time jobs because of lack of full-time employment opportunities.
Those forced to return to school for more training are not counted as unemployed. Those who would like to work but cannot because they do not have child care or are ill are not counted either.
Discouraged workers, those who are so pessimistic about job prospects that they have stopped looking, are not counted. Discouraged workers are more prevalent during recessions, like now.
Those who have not looked for work in four weeks are not counted. Those who take early retirement, voluntary or otherwise, are not counted as unemployed.
This is an extremely large part of today’s unemployment mix.
The late 1980s and early ‘90s have brought a wave of middle-management job eliminations in U.S. corporations. Many middle managers, having worked 30 or more years for a company, and now in their mid-50s, found themselves being “retired” early or their jobs eliminated.
Most of them either joined the ranks of discouraged workers or found themselves too old to be considered for new jobs. There is an entire generation of hard-working, dedicated middle managers who have been forced out of the labor market 10 years too soon. This is probably the biggest tragedy of the U.S. recession.
American corporations have sent a message to the entire world that loyalty and hard work do not have a place in the U.S. business world. While U.S. workers in their 50s are suffering now, it will be the U.S. corporations that will suffer into the 21st Century.
As the children of these betrayed workers of the ‘90s grow up and are eyewitnesses to the mismanagement and poor treatment of their parents, they will have learned that loyalty is a lost concept in American business. Workers of the 21st Century will be going for the short-term gains, jumping from job to job and selling out their companies before the companies sell them out.
All these workers are not figured in the Bureau of Labor Statistics’ unemployment rate. Economists have found in the past that the “uncounted” unemployed account for as high as 56.6% of the unemployed workers in America. That means that the official published unemployment rate as calculated by the Labor Department and reported by your paper may represent only 43.4% of the actual number of unemployed workers.
Thus the 7.4% rate your paper reported Nov. 13 does not draw an accurate picture of the current jobless situation. The actual unemployment rate, if you take into account all those mentioned, is closer to 17.5%.
MARK EWALD
Hermosa Beach
