2.8 Million Uncounted Unemployed
by Connie Hair
08/13/2010
Rep. Dave Camp (R-Mich.), top Republican on the House Ways and Means Committee yesterday released information revealing the undercounting scheme used by the Obama administration to mask true unemployment numbers in their latest 9.5% unemployment claims.
Reports from the Associated Press on the U.S. Department of Labor data released Thursday on first-time claims for unemployment benefits, a key metric of the current health of the labor market, revealed the highest level of initial claims in six months.
From the AP report:
First-time claims for jobless benefits edged up by 2,000 to a seasonally adjusted 484,000, the Labor Department said Thursday. That's the highest total since February. Analysts had expected claims to fall.
Initial claims have now risen in three of the last four weeks and are close to their high point for the year of 490,000, reached in late January. The four-week average, which smooths volatility, soared by 14,250 to 473,500, also the highest since late February.
As the Ways and Means Republican staff pointed out:
Last week, the July jobs report showed the official unemployment rate remaining stuck at 9.5% --the 15th consecutive month above 9%. But even those grim statistics mask the true depth of despair in the U.S. labor market. The reason involves how the government calculates the official unemployment rate -- by counting unemployment only among those currently looking for work.
Consider the following seemingly contradictory official data for the last three months:
* Total employment dropped by 495,000 -- or almost 4/10ths of 1 percent.
* Yet the unemployment rate fell from 9.9% in April to 9.5% in July.
How can employment and the unemployment rate both be falling at the same time? Because, in the last three months, 661,000 people stopped being counted as “officially” unemployed after they stopped looking for work and dropped out of the “official” labor force. They joined literally millions of others already standing on the sidelines of the U.S. labor market who are without jobs but are nonetheless ignored in official unemployment rate data. In fact, if the current total of 2.8 million uncounted unemployed were included in the labor force, the official unemployment rate would now be over 11%, as the chart below displays.
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Connie Hair writes daily as HUMAN EVENTS' Congressional correspondent. She is a former speechwriter for Rep. Trent Franks (R-Ariz.) and a former media and coalitions advisor to the Senate Republican Conference. You can follow Connie on Twitter @ConnieHair.
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