An 8.5% official unemployment rate?

[peejay 327]

The real unemployment rate? Try 15.6%

The official US jobless rate, now 8.5%, excludes millions of people -- among them those who have given up on finding work and those forced into working fewer hours than they'd like.

By Catherine Holahan

MSN Money

An 8.5% unemployment rate is unmistakably bad. It's the highest rate since 1983 -- a year that saw double-digit unemployment, nearly 30 commercial bank failures and more than 15% of Americans living below the poverty line.

But the real national unemployment rate is far worse than the U.S. Department of Labor's March figure, announced today, shows. That's because the official rate doesn't include the 3.7 million-plus people who are reluctantly working only part time because of the poor labor market. And it doesn't include the workers who have given up scouring want ads for seemingly nonexistent jobs.

When those folks are added to the numbers, the unemployment rate rises to 15.6%. In March 2008, that number was 9.3%. The Bureau of Labor Statistics began tracking this alternative measure (.pdf file) in 1995.

"The situation out there is very grim," says Heather Boushey, a senior economist at the Center for American Progress, a left-leaning think tank. "We have seen the mounting of job losses faster than any point since World War II. I have never seen anything escalate this bad."

Even the Department of Labor's expanded unemployment measure doesn't fully capture how difficult the job market is for American workers. It doesn't include self-employed workers whose incomes have shriveled. It doesn't look at former full-time staff employees who have accepted short-term contracts, without benefits, and at a fraction of their former salaries. And it doesn't count the many would-be workers who are going back to school, taking on more debt, in hopes that an advanced degree will improve their chances of landing a job.

Here's another way to look at the unemployment figures: More than 5 million people have lost their jobs since the start of the recession in December 2007. And more than 13 million people are unemployed. That's the highest number the U.S. has seen since it began tracking unemployment after World War II. For every job out there, more than four people are competing for it, says Boushey.

Mitch Feldman has seen the results of such intense competition firsthand. As president of New York executive placement firm A.E. Feldman Associates, he has watched lawyers accept paralegal jobs after failing to find any companies that are hiring. He has seen Ivy League-educated financial professionals accept lower-paid contract work after searching in vain for banking jobs.

"When some of the big investment banking firms had layoffs a year ago, those people were looking for permanent jobs," but now they're taking six-month and yearlong contracts, says Feldman. "And they're competing with other contractors who were on contract before. More supply, less demand, and the prices go down."

Some unemployed workers have become so frustrated by the difficulty of landing a job that they're exiting the labor market altogether. Prior recessions saw a spike in the number of women choosing to be stay-at-home moms rather than continue to compete for work. This recession has seen a large spike in the number of laid-off men opting to become stay-at-home dads -- or at least stay at home.

Once people stop looking for work, they're no longer entitled to unemployment benefits.

Unemployment to worsen?

The employment situation on the horizon looks even worse. Typically, unemployment peaks six months to a year after the economy starts to recover, says Rebecca Blank, an economist with the Brookings Institution, a Washington, D.C., public policy think tank. Boushey believes the unemployment rate could reach double digits by the end of the year.

So, even if the recent stock market rally is a harbinger of economic recovery, that doesn't mean that unemployment rates will fall soon. Nor is an economic recovery a guarantee that unemployment will drop below 4%, as it did during the boom in 2000.

The way some economists see it, the U.S. has entered a downward spiral that could result in higher unemployment for the foreseeable future.

Right now, unemployment has helped fuel consumer cutbacks that have, in turn, pinched businesses' revenues. That has forced them to cut jobs in an effort to stem profit losses, continuing the cycle. Eventually, the hope is that government spending will employ more people and give businesses more revenue, leading to more spending and more hiring -- reversing the cycle.

But it might not happen that way. Spooked consumers, still reeling from an attack on all their assets, may simply not spend like they once did -- regardless of how much money the government pushes into the economy. Instead, they might save money in preparation for the tax increases they assume are inevitable or put it in safe assets like long-term Treasury bonds.

Businesses might also curb their spending. Instead of responding to sales increases with hiring, they could invest in relatively cheaper technology to replace eliminated positions.

Economists don't have to go back very far to find an example of a recovery that didn't push unemployment back to its prior lows. The lowest unemployment fell after the 2001 recession was 4.4% in December 2006 (it hit that number again in March 2007). That was significantly lower than the 6.5% high in 2003. But it wasn't close to the sub-4% rates seen in 2000.

That sort of recovery was what economists call a jobless recovery. "We weren't really growing wages and income for people in the bottom half of the economic distribution," says Alan Berube, an economist with the Brookings Institution.

http://articles.moneycentral.msn.com/learn...e.aspx?page=all

[alienlovechild 75]

The employment situation on the horizon looks even worse. Typically, unemployment peaks six months to a year after the economy starts to recover, says Rebecca Blank, an economist with the Brookings Institution, a Washington, D.C., public policy think tank. Boushey believes the unemployment rate could reach double digits by the end of the year.

Funny how you rarely hear about the "real" unemployment rate when you add in people who've given up on looking for work. Heard that one all the time back the early 1980s recession. Wait til you about how most of new jobs created are low paying McJobs.

[Trumplestiltskin 5,791]

Employment statistics have always been crude measure of the real picture - as they usually only officially count someone as "unemployed" if they're actually registered for and are receiving benefits.

That's the case even at the best of times.

[peejay 327]

The employment situation on the horizon looks even worse. Typically, unemployment peaks six months to a year after the economy starts to recover, says Rebecca Blank, an economist with the Brookings Institution, a Washington, D.C., public policy think tank. Boushey believes the unemployment rate could reach double digits by the end of the year.

Funny how you rarely hear about the "real" unemployment rate when you add in people who've given up on looking for work. Heard that one all the time back the early 1980s recession. Wait til you about how most of new jobs created are low paying McJobs.

With the real unemployment rate at 15.6% now you have to wonder what it will be when the official double digit rates hit later in the year.

I found myself laid off back in 1983 when unemployment was just as bad as it is now. I actually found a better paying job doing something completely different than the job I lost. And I found that job after 4 months unemployed.

[GiGii 4]

This recession seems like the one Japan had which resulted in stagnation for 10 yrs. I hope we dont have that, but starting to seem so.

A positive spin I can think of, is that many illegals will leave the US. How many want to stay when they can barely or at all pay bills, and nothing is left over to send home. It won't be cost beneficial anymore. Less people will overstay tourist visa's, as they probably have a better picture in their home country.

Side que: How do they count unemployment? Is it just the people that are receiving benefits? What if after 6 months, they stop receiving benefits, and still no job. Are they then excluded from the calculation?

[alienlovechild 75]

A positive spin I can think of, is that many illegals will leave the US. How many want to stay when they can barely or at all pay bills, and nothing is left over to send home. It won't be cost beneficial anymore. Less people will overstay tourist visa's, as they probably have a better picture in their home country.

In the short run that's happening but a lot of illegals are returning to countries with low wages and even high unemployment. The only advantages are they may be able to stay with friends and family. This is a worldwide recession so there's no real safe haven.

Side que: How do they count unemployment? Is it just the people that are receiving benefits? What if after 6 months, they stop receiving benefits, and still no job. Are they then excluded from the calculation?

Sounds right but sometimes unemployment benefits are extended when the unemployment rates gets high.

[SonoranSongbird 3]

Side que: How do they count unemployment? Is it just the people that are receiving benefits? What if after 6 months, they stop receiving benefits, and still no job. Are they then excluded from the calculation?

I think that is how it is determined---though that might have changed. That would also exclude people who are not eligible for unemployment benefits to begin with because their job was temporary or classified as an independant contractor position.

In the late 80s/early 90s, I read an article that estimate the true unemployment rate would be about 2 1/2 times the official rate.

There are all different kinds of statistics used to measure this, though. FIrst time jobless claims, new jobs created, jobs eliminated.

[peejay 327]

This recession seems like the one Japan had which resulted in stagnation for 10 yrs. I hope we dont have that, but starting to seem so.

A positive spin I can think of, is that many illegals will leave the US. How many want to stay when they can barely or at all pay bills, and nothing is left over to send home. It won't be cost beneficial anymore. Less people will overstay tourist visa's, as they probably have a better picture in their home country.

Side que: How do they count unemployment? Is it just the people that are receiving benefits? What if after 6 months, they stop receiving benefits, and still no job. Are they then excluded from the calculation?

We could only wish. Unfortunately the Dims love illegal aliens more than they love American citizens.

How else can you explain the recent reintroduction of the DREAM Act this week giving preferential treatment to illegal aliens for college tuition and (of course) Green Cards via amnesty. Thank Obama, Pelosi, and Reid for screwing the American taxpayer. And thank Senator ####### Durbin (Dirtbag) for reintroducing this pandering P.o.S. legislation once again to test the amnesty waters for the benefit of scofflaws.

This on top of guaranteeing illegal alien access to taxpayer funded stimulus jobs by purposely barring mandatory use of E-Verify. Thank Obama, Pelosi, and Reid for screwing the unemployed American worker again.

And this on top of DHS Secretary Napolitano stopping the deportation of the illegal aliens nabbed at the recent Yamato factory raid in Washington state. They have been released with work authorization. Thanks Obama, Pelosi, and Reid for screwing the unemployed American worker again...and again...and again...

................in their self serving, US citizen back stabbing quest for amnestied illegal alien votes after the coming blanket illegal alien amnesty with a guaranteed pathway to a registered Dim voter registration card.

When will the American people wake up from this nightmare and take our country back from these azzholes? Apparently Americans love getting screwed because they keep electing these self serving azzholes year in and year out. Go figure?

Edited April 3, 2009 by peejay

[Redneck-NOVA 1]

This recession seems like the one Japan had which resulted in stagnation for 10 yrs. I hope we dont have that, but starting to seem so.

A positive spin I can think of, is that many illegals will leave the US. How many want to stay when they can barely or at all pay bills, and nothing is left over to send home. It won't be cost beneficial anymore. Less people will overstay tourist visa's, as they probably have a better picture in their home country.

Side que: How do they count unemployment? Is it just the people that are receiving benefits? What if after 6 months, they stop receiving benefits, and still no job. Are they then excluded from the calculation?

We could only wish. Unfortunately the Dims love illegal aliens more than they love American citizens.

How else can you explain the recent reintroduction of the DREAM Act this week giving preferential treatment to illegal aliens for college tuition and (of course) Green Cards via amnesty. Thank Obama, Pelosi, and Reid for screwing the American taxpayer. And thank Senator ####### Durbin (Dirtbag) for reintroducing this pandering P.o.S. legislation once again to test the amnesty waters for the benefit of scofflaws.

This on top of guaranteeing illegal alien access to taxpayer funded stimulus jobs by purposely barring mandatory use of E-Verify. Thank Obama, Pelosi, and Reid for screwing the unemployed American worker again.

And this on top of DHS Secretary Napolitano stopping the deportation of the illegal aliens nabbed at the recent Yamato factory raid in Washington state. They have been released with work authorization. Thanks Obama, Pelosi, and Reid for screwing the unemployed American worker again...and again...and again...

................in their self serving, US citizen back stabbing quest for amnestied illegal alien votes after the coming blanket illegal alien amnesty with a guaranteed pathway to a registered Dim voter registration card.

When will the American people wake up from this nightmare and take our country back from these azzholes? Apparently Americans love getting screwed because they keep electing these self serving azzholes year in and year out. Go figure?

Agree with you 200%. I'm an immigrant myself and illegals make me sick. People who think that legal immigrants support illegals are retarded. Actually the only people who support illegals are American born US Citizens who are either aging hippies or young liberals brainwashed by socialist ideas...

[Dan J 277]

This recession seems like the one Japan had which resulted in stagnation for 10 yrs. I hope we dont have that, but starting to seem so.

A positive spin I can think of, is that many illegals will leave the US. How many want to stay when they can barely or at all pay bills, and nothing is left over to send home. It won't be cost beneficial anymore. Less people will overstay tourist visa's, as they probably have a better picture in their home country.

Side que: How do they count unemployment? Is it just the people that are receiving benefits? What if after 6 months, they stop receiving benefits, and still no job. Are they then excluded from the calculation?

We could only wish. Unfortunately the Dims love illegal aliens more than they love American citizens.

How else can you explain the recent reintroduction of the DREAM Act this week giving preferential treatment to illegal aliens for college tuition and (of course) Green Cards via amnesty. Thank Obama, Pelosi, and Reid for screwing the American taxpayer. And thank Senator ####### Durbin (Dirtbag) for reintroducing this pandering P.o.S. legislation once again to test the amnesty waters for the benefit of scofflaws.

This on top of guaranteeing illegal alien access to taxpayer funded stimulus jobs by purposely barring mandatory use of E-Verify. Thank Obama, Pelosi, and Reid for screwing the unemployed American worker again.

And this on top of DHS Secretary Napolitano stopping the deportation of the illegal aliens nabbed at the recent Yamato factory raid in Washington state. They have been released with work authorization. Thanks Obama, Pelosi, and Reid for screwing the unemployed American worker again...and again...and again...

................in their self serving, US citizen back stabbing quest for amnestied illegal alien votes after the coming blanket illegal alien amnesty with a guaranteed pathway to a registered Dim voter registration card.

When will the American people wake up from this nightmare and take our country back from these azzholes? Apparently Americans love getting screwed because they keep electing these self serving azzholes year in and year out. Go figure?

Agree with you 200%. I'm an immigrant myself and illegals make me sick. People who think that legal immigrants support illegals are retarded. Actually the only people who support illegals are American born US Citizens who are either aging hippies or young liberals brainwashed by socialist ideas...

Stereotypes are fun. But not very accurate.

Most of the support for legalizing illegal aliens, generally comes from family who are legal immigrants or citizens in the US, and realists who realize that any wholesale round up and deportation of illegal aliens is rather impractical.

Illegal immigration is largely an economic problem and is best addressed with a solution that takes into account the economic incentives for immigrating illegally. With the current economic situation in the US, fewer have been trying to enter, and many have actually been going home on their own.

[mRx 16]

If we removed the parasitic welfare distribution system, then I doubt that anyone would give a sh!t about who was legal or illegal.

[Mags 112]

Hey, Matt's back!

[Heracles 417]

If we removed the parasitic welfare distribution system, then I doubt that anyone would give a sh!t about who was legal or illegal.

While Illegals are leeching off government services they are not leeching of welfare. The biggest problem with regards to illegals is that for every job they take, that is one less Job for an American. Sure they are not to blame for this crisis but every single job in America should be going to those who are legally permitted to work here. Especially at a time when Americans are being thrown on the streets and living in tents. Also time to get rid of the anchor baby rule, which many are exploiting.

Just the other day I saw a study which says that every $1 billion invested in the country (or billion worth of exports), equates to the creation of approximately 11,500 jobs. So the money being sent to Mexico has been a economic drain on the American economy.

The Trade Position was also interesting. When it comes to exports vs imports (per capita) the US is one of the worst performing.

EU - Ex: $3,582 Im: $3,651

Japan - Ex: $5,172 Im: $4,607

Australia- Ex: $5,527 Im: $6,709

US: Ex: $3,874 Im: $6,083 - Large trade imbalance(deficit)

Edited April 4, 2009 by Constellation

[Twomoles 8]

Unemployment numbers never show up self-employed, and contractors, and those who does small business. Number is much, much larger.

Time to stop stereotypes about illegal immigrants and welfare, especially by those who are in international marriage themselves. I believe 95% wants to be here legally and obey laws. Big portion of the remaining one's are those who got stuck in bureaucracy. I as well as anyone who came here can become one day illegal, only because of paperwork, bureaucrats or hefty fees.

Because of this illegal immigrant propaganda (those ones who pick your oranges and cut meet, so you can by them cheep here in America, and some fellow American hired them by the way), attitude towards any not-so-American becomes nastier and nastier. Should I stick my GK in face towards any uppish person who acts suspicious only to prove I am not here illegally?

[amberdima 6]

i thought about this yesterday- underemployment should definitely be counted. there are people barely making it (i lived off of a dozen eggs and water last week) and are working even full-time because there are no jobs available in their field.