Unemployment Rate Poor Measure Of Unemployment

Unemployment Rate Poor Measure Of Unemployment

Unemployment Rate Poor Measure Of Unemployment

The XX Factor
What Women Really Think
April 5 2010 12:54 PM

Unemployment Rate Poor Measure Of Unemployment

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This article in the Washington Post explaining why the unemployment rate might go up even as jobs are being added to the economy should be treated as proof positive that the way we measure unemployment in this country is completely screwed up. In sum, the fact that more people are getting hired means that people who've given up looking for jobs might feel re-energized. Which means they're more likely to tell a pollster that they're "seeking," which counts toward the unemployment rate. But if the very same people told the pollster they'd like a job but aren't looking because they can't find one, they don't count.

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On paper, it seems like a good idea to filter out adults who don't have jobs but aren't looking for jobs. You don't want to count housewives, full-time students, and the idle rich toward the unemployment numbers. But the current system creates a situation where the real unemployment rate isn't being fully measured. And it's not just that discouraged unemployed workers are left out of the numbers. If you don't have a regular job, but you got paid $100 to do some lawn work this week, you count as employed in the government statistics. The current unemployment rate is hovering around 10 percent, but it could actually be much higher under common-sense definitions of unemployment.

Take, for instance, the fact that one-quarter of the new jobs added to the economy are Census jobs. Common sense should tell us that this just isn't enough. Those jobs are badly paid, temporary employment.  In an ideal world, they'd be jobs for students and housewives looking to make a little extra cash, but unfortunately, those jobs are going to desperate people who are responsible for paying the expenses of their households. Their desperation isn't being measured in our official unemployment statistics, making it harder to understand exactly how bad off the economy really is.