The New York Times David Leonhardt this morning shines a spotlight on the real conditions in the labor markets—ones that are obscured by the traditional unemployment rate, a measure that doesn’t come close to capturing the true extent of the misery.
That’s because it doesn’t include folks who want to work full-time but can only find part-time jobs, meaning they’re only something like half-unemployed. It’s a bigger problem than you think if you just read the business press:
In California and a handful of other states, one out of every five people who would like to be working full time is not now doing so…
Include them — as the Labor Department does when calculating its broadest measure of the job market — and the rate reached 23.5 percent in Oregon this spring, according to a New York Times analysis of state-by-state data. It was 21.5 percent in both Michigan and Rhode Island and 20.3 percent in California. In Tennessee, Nevada and several other states that have relied heavily on manufacturing or housing, the rate was just under 20 percent this spring and may have since surpassed it.
That broad measure is called the U-6, and nationally it’s at 16.5 percent, a full seven points higher than the traditional unemployment rate.
Now you may say that you’re not unemployed if you have a part-time job. That’s technically true, of course, but there are all kinds of unemployment—including the hardcore kind where people have been jobless for more than a year and given up looking, and thus don’t get counted in any stats, as Leonhardt points out.
And for many, part-time unemployment is a steep, painful step down:
Richard Smith (not related to Bernard) and his wife, Lynn, for example, moved from Michigan to Charlotte, N.C., last summer, after he had been laid off from white-collar jobs by both Ford and General Motors in the last five years. But after talking with 35 headhunters and sending out hundreds of applications, Mr. Smith, who’s 58, still hasn’t found full-time work.
Instead, he works a few days a week at a golf shop, repairing clubs and making $9.50 an hour. The money has helped the Smiths buy a bargain-basement foreclosed house. “You get depressed, obviously,” he said. “But that never changes my attitude about my capability.”
It would have been helpful here to have known how much Smith made in his previous full-time, white-collar jobs.
At first glance, I questioned why Leonhardt used this quote:
“It’s not going to be an overnight turnaround,” as Bernard Smith, an unemployed engineer in Greenville, S.C. (a state where the broader jobless rate was 20.5 percent this spring), who has been looking for work since May, told me. “It’s going to take time.”
This guy’s not an expert! Just some unemployed dude. Bad Chittum! Leonhardt is right. We need to hear more from actual workers and less from, say, dismal scientists, or Wall Street analysts. After all, I’m sure Bernie Smith’s record on economic predictions is just as good as any of theirs—and he can feel it.
This is a good kicker:
do well to remember that this is not an equal opportunity recession. By September, one out of every four Californians — and Oregonians and South Carolinians and Michiganders — who would like to have a full-time job might not have one.
Who ever thought we would be saying such a thing?
A final point: It’s time for all unemployment stories to use both the traditional unemployment measure and the U-6. You’re giving readers an incomplete story by leaving it out.