Bloomberg has a nice story today on how the unemployment rate is woefully understating the amount of pain in the labor markets—and at 8.5 percent, that’s saying something.
But using the broader U-6 measure, which includes conventional unemployment, as well as those who have given up looking for work and those who can only find part-time jobs, the number is 15.6 percent. This is something some in the media, though not all, seem to be coming to grips with.
Bloomberg’s lede nicely shows why this is an important number to consider:
Joseph Ramelo gave up searching for work in January to return to school, two months after he was laid off as a San Francisco election clerk. Antonio Poe is struggling to get by doing part-time landscaping in Greensboro, North Carolina, after losing his job as an electrician.
While such workers are feeling real pain from the recession that began in December 2007, they’re not represented in the 8.5 percent unemployment rate the Labor Department reported last week. They are part of a broader group that includes those who want a job but have stopped looking for work and those who want full-time positions but have to settle for part-time employment.
The latter group has nearly doubled in the last year:
The number of Americans who want full-time jobs but are working part time has increased 83 percent in a year to 9 million, according to Labor Department data.
And excellent stuff here: The next paragraph puts a face on that statistic:
Ken Hueser may become one of them. The Minneapolis architect lost his $60,000-a-year position in February and is applying for part-time work at garden centers for $8.50 an hour. Ken Hueser may become one of them. The Minneapolis architect lost his $60,000-a-year position in February and is applying for part-time work at garden centers for $8.50 an hour.
He’s working part-time, but even if were to work full-time, $8.50 an hour is about $17,000 a year.
And there’s some other good data in this piece:
There are currently about four unemployed workers for every job opening, according to the Economic Policy Institute in Washington.
The long-term unemployed, those who have been out of a job for more than six months, constitute 24.2 percent of the unemployed, the largest share during a recession since the Labor Department began recording data in 1948….
“We’ve taken a huge step back here,” said James Glassman, senior economist at JPMorgan & Co. He said elevated levels of unemployment and underemployment are costing the economy about $1 trillion in gross domestic product a year.
Nice work by Bloomberg.