America’s Effective Unemployment Rate at 18.7%?

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layoffs.jpgEach month, I receive from Leo Hindery an update on “America’s effective unemployment rate” which includes not only the official unemployment figures but other data points showing off-the-books unemployed or underemployed people.
The numbers are staggering and are aggregates of official data. They matter because various Obama administration officials including the President himself started off calling for huge stimulus packages to help generate “jobs, jobs, jobs!”
But now, I have been hearing more and more from senior Obama economic team members about the jobs they hoped for coming at the very tail end of an economic recovery. Others are talking about a GDP recovery — but not a jobs recovery. They are admitting as well that they underestimated the severity of this recession and its impact on unemployment levels.
And all this while Goldman Sachs and other financial houses have seen their balance sheets get cleaned up and bonuses surge.
Hindery writes:

Here is a June 2009 version of the summary that calculates the Effective Unemployment Rate, which is now 18.70%, and the Effective Number of Unemployed, which is now 30,172,000.
There are currently 14,729,000 officially unemployed workers, as just announced. However, this figure does not include the combined 15,443,000 workers either (1) in the “labor force reserve” because they have abandoned their job searches (i.e., 4,278,000) or (2) underemployed because they are “part-time of necessity” (i.e., 8,989,000) or “otherwise marginally attached” (i.e., 2,176,000).
The effective unemployment rate is therefore 18.70%, instead of the official 9.51%.
Since the start of the recession in December 2007, the number of workers who are officially unemployed has increased by 7,188,000, while almost twice as many workers – 13,290,000 – have become effectively unemployed. And all the while, we should have been creating around 2,250,000 new jobs (i.e., 18 months times 125,000 jobs per month) just to keep up with population growth.
In June, the number of workers officially unemployed increased 218,000, while the number of workers effectively unemployed actually decreased 35,000.

It’s important to see the entire picture of America’s jobs profile — no matter how unpleasant.
I recognize that credit bubble related recoveries are hard to work out and are usually quite slow — with job growth at the back end. This all makes sense — but with Christina Romer out raising expectations again with giddy talk predicting a V-shaped recovery and given the “jobs, jobs, jobs” mantra of President Obama himself — the gap between the job figures expected and the disappointing economic realities generated may be politically consequential.
– Steve Clemons

Comments

23 comments on “America’s Effective Unemployment Rate at 18.7%?

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  3. BirgitD says:

    Why can’t I find any more recent info on the effective unemployment rate in this country? If it was 18.7% in July, what is it now…and why cant I find the info online ANYWHERE?

    Reply

  4. The New World Order says:

    Don’t believe anything you see or read in the media about the
    current state of the economy. They are feeding us sugary lies so
    we won’t take to the streets and riot! The current economic state
    of the world has been wrongly coined as a recession because
    the economy will never fully rebound here in America. And it is
    getting worse everyday. The real reason why so many educated
    middle class professionals are out of work is because their jobs
    have been sold out for a better price to people overseas. Even if
    your job hasn’t been directly effected by outsourcing, offshoring
    has a domino effect in eventually eliminating ALL middle class
    jobs in America. The truth is, these big faceless all powerful
    corporations to which we have entrusted our lives have royally
    fucked over regular everyday hard-working American folk. The
    richest people in the country who control the vast majority of
    our nation’s wealth simply do not care if the entire American
    middle class slips into stomach-grumbling poverty and becomes
    homeless.
    The best thing to do now is, if you have any money saved up, to
    leave the country and go somewhere where your money and
    education can take you light years further. Living in the states
    and competing for scarce jobs with millions of laid-off over
    qualified professionals is an exercise in futility. People lucky
    enough to have jobs in the states will all have minimum wage
    Mc-Jobs because America has become a “service economy”. You
    don’t believe me? You will when your are fighting over
    applications at the local McDonald’s with people who have
    Master’s Degrees in Nuclear Science.

    Reply

  5. Richard Chenoweth says:

    Unemployment is even higher than the purported 18.7%
    What about the self-employed? We are not counted in any of these
    categories. I know only two people who were actually “laid off”.
    But as a freelancer, I know perhaps 40 people like me, freelance
    designers, writers, architects, webbies, etc… who are effectively at
    a complete stop. No work. No benefits, no unemployment
    insurance, no nothing.
    Please add us to the numbers. So maybe we’re really at 25%
    unemployment.
    PS: “Jobless Recovery” is code for “the rich get richer”. Yeah, my
    stocks would go up too if I fired 6.7 million people.

    Reply

  6. King says:

    Sounds like we’re approaching a time when the public will look for new solutions. The public will realize what the underlying problem is: lack of true representation in so-called democracies. It will want to renew democracy in a meaningful way — to regain its voice. An excellent youtube video ‘Renew Democracy’ shows a way to accomplish this. Good luck to us all. Real change is coming soon to a nation near you!

    Reply

  7. Mr King says:

    Sounds like we’re approaching a time when the public will look for new solutions. The public will realize what the underlying problem is: lack of true representation in so-called democracies. It will want to renew democracy in a meaningful way — to regain its voice. An excellent youtube video ‘Renew Democracy’ shows a way to accomplish this. Good luck to us all. Real change is coming soon to a nation near you!

    Reply

  8. Lynne says:

    If I could get a job overseas, I’d leave tomorrow… GLADLY!
    I have witnessed a once-great nation meet its demise through corporate greed, poor management, and a government that doesn’t give a daXX about the middle class. There has been no vision by political leaders, and I’m sorry to say that there never will be. China has been eating the US’s lunch for well over a decade, and the US will allow that to continue. There are scores of highly educated, highly energetic workers with great ideas who are out of work and have been for over a year…with no prospects for meaningful work in sight. This is what we’ve become and I don’t see a light at the end of tunnel.

    Reply

  9. John says:

    The success of FDR’s “alphabet soup” programs is a myth. Things were much worse in 1938 than they were at the beginning of the depression. So bad, in fact, that FDR called off his last proposed stimulus, admitting in his memoirs that they had been a massive failure. Unfortunately, it was a global war that put us back to work.
    Obama’s plans are a joke. They tend to funnel all stimulus through already existing federal programs. Most of the money is in the form of subsidies to the states, and have no chance of ever generating a single job.
    Why can’t we have a program like this? For every new hire that stay’s employed for at least a year the government subsidizes the employer directly at $7.50 an hour. 31 billion would create 2 million jobs. We’ll never get a program like this because there would be no mechanism for graft, cronyism, and political favoritism.

    Reply

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  12. David says:

    Richard Blair,
    If it is doable, it is the smartest move you can make. The forces arrayed against progressive policies in the United States are mind-numbingly powerful, and one progressive POTUS cannot put Humpty-Dumpty back together again. FDR had a window of opportunity because we were so devastated by Wall Street and the Great Depression that he could institute progressive reform, although from the start the right was out to do the New Deal in, and slowly but surely pretty much succeeded.
    Obama could not get the level of jobs creation stimulus through Congress that this crisis necessitates, if the lives and well being of working stiffs actually matters to modern America. The Senate has always been a barricade against timely progressive progressive policies, although at times it has been brought screaming and kicking into the light.
    But when you have people like Olympia Snowe and Diane Feinstein opposing a public option, and when you have people buying the bullshit that the stimulus is an unjust theft from future generations (but the $1-2 trillion for Iraq isn’t), and saving Wall Street and the banks (disingenuous protestations from the right notwithstanding) the only things special interests will sign on to, you and everyone in your situation are well and truly screwed.
    Our economic system apparently rests on a foundation of the concept of expendables. Interesting comment the other day from the homeless protest movement in Sacramento: under California law, there is no place it is lawful for the truly homeless to live, so the homeless have no lawful right to exist. Disturbingly logical conclusion.

    Reply

  13. ... says:

    money is for bailing banks and continuing war 24/7… it is now the ‘american way’…. americans without jobs and living on the streets is the way of the future…. as the bumper sign said ‘ it will be a good day when schools are funded and the military has to hold a bake sale to buy a bomber’…

    Reply

  14. Bart says:

    NPKG omits our current money traps in Iraq and Afghanistan. If our leaders think they can win a game of whack-a-mole they are seriously wrong. Denying a base anywhere in Asia to those who object to our ME policies will be a fool’s game.

    Reply

  15. Closer says:

    Now I know why the bathroom is always out of order at the convenience store.You can’t but toilet paper with food stamps.

    Reply

  16. Yankee228 says:

    Let’s face it/ Foggy Bottom could care less who’s out of work/ off the books etc. The important thing today (July 2) was to LIE and keep the % below 10%. Recall that without the ‘stimulus’ ( a joke) yikes unemployment could reach 8%.
    None of these FRAT boys, has stood in the venetian – blind- gloom, bile green walls, of an unemployment office, where the only two jobs listed were ‘waitress and Easter Bunny’ ( which I took to be seasonal?).
    These pigs are chomping on [TRUE] $150.00 per lb KOBE (organic) BEEF (organic fruits/veg) from JAPAN – while they VOTED (approved) $7.00 per day for the unemployed (food stamps) to eat on!! They’ve ALL – gone to Ivy League Colleges/ taken world trips before starting college/ and fell into cushy jobs with Daddy’s help etc!!

    Reply

  17. xemployee says:

    As one of those people in the official numbers, I, too, am wondering when I will become part of the off-the-books statistics. I have been out of work for more than seven months — my home is already in foreclosure — I have a little over a month of savings left before I have to start hitting my 401K — bankruptcy is looming. We need jobs now, not at the end of the recession. How about something like the WPA?

    Reply

  18. nader paul kucinich gravel says:

    Wall Street
    Art students
    9/11 snow job
    Chicken hawks
    Moving company
    Propaganda media
    DNC stealth neocons
    Anti-semitism accusers
    The chosen the superior
    2-3% of the US population
    Extortion blackmail bribery
    By deception ye shall wage war
    AIPAC’s Israel-first dual-nationals
    For profit NotFederal NoReserve scam
    Words are plentiful deeds are precious!

    Reply

  19. JamesL says:

    The punch being taken by developing countries is similar to the hit on American households, namely that those entities have the least financial and asset reserves, and begin to cease being active contributors to the economy. Wall Street speculation and the credit default disaster (disaster is not strong enough) sucked all the dollars out of the economy of the low and middle. Obama’s economic “stimulus” package has done absolutely nothing for those most vulnerable. The “turnkey project” soundbite was only a soundbite, because only larger corporations can offer the documentation of a turnkey project. They are non-starters. Even before it was initiated, astute observers noted the Obama plan’s similarity to Japan’s failed attempt, and contrasted it with the path taken by Sweden. Obama’s plan has indeed slugged (as in the animal slug) along following the Japan experience and the nearing prospect of heaving truck-sized bales of money toward economic and corporate hulks too big to fail is definitely on the table, with nary a crumb for those losing their homes. On the low end of the economy, buying has just about ceased. The weak manufacturing upturn simply reflects a weak pulse of the most basic, essential buying that has been deferred. But behind that buying is a scenario where deferred maintenance is now beginning to affect manufacturing reliability, individual reserves have been used up, and the fragility of the process of just-in-time OEM suppliers is now beginning to take hold. This long term running-into-the-ground of equipment and people is the demarcation between a recession that seems somehow manageable and a depression where people begin to lose hope on a large scale.
    The things that matter here are communities and families and people. Large financial entities must take second place behind them. But that’s no longer the practice in the US, so the future appears increasingly unchanging and bleak.

    Reply

  20. Curious observer says:

    The number is actually over 20% now according to John Williams, whose ShadowStats site calculates unemployment (and CPI and GDP) the way they were back in Jimmy Carter’s day.

    Reply

  21. erichwwk says:

    Kudos to Steve for keeping Leo Hindery and the UE issue on the radar.
    Average wages are not as meaningful a metric for economic well being as are median wages (which incidentally have not increase for three decades for males). It does little good for Richard Blair and 99.8 percent of Americans that incomes for the top 0.002 percent of Americans have increased to pull up the “average” if the median is falling.
    Thus to me the issue of inflation is misguided, as the main consequences of inflation are to alter income distribution, something important, but correctable at any stage by a legislative process.
    But the social costs of Richard and 18.7% of Americans not contributing is a loss that is permanent and one that can never be recouped.
    http://tiny.cc/FPnBV
    Shame on Congress and those states unable to stop this avoidable loss by dealing with UE directly, rather through some contorted trickle down view.
    And kudos to JohnH for recognizing that when income is increased merely by creating pretend jobs (building more F-22s, more nuclear weapons, and more destruction, more war, finding “new: missions for DOD recommended base closures) we are in essence reducing everyone’s standard of living as REAL GDP is not increased, what economists call the “broken window fallacy”.
    [see wikipedia on that]
    John Kenneth Galbraith:
    “The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.”
    “Trickle-down theory – the less than elegant metaphor that if one feeds the horse enough oats, some will pass through for the chickens.”

    Reply

  22. JohnH says:

    Stiglitz has some observations on the economic collapse: “On June 23, a United Nations conference … reached a consensus both about the causes of the downturn and why it was affecting developing countries so badly…The agreement was … in many ways … a clearer articulation of the crisis and what needs to be done than that offered by the G-20, the UN showed that decision-making needn’t be restricted to a self-selected club, lacking political legitimacy, and largely dominated by those who had considerable responsibility for the crisis in the first place.” Hmmm–is the conference suggesting that the latest Washington thinking may be inimical to the larger public interest?
    “The most sensitive issue touched upon by the UN conference – too sensitive to be discussed at the G-20 – was reform of the global reserve system. … On the last day of the conference, as America was expressing its reservations about even discussing … this issue…, China was once again reiterating that the time had come to begin working on a global reserve currency. Since a country’s currency can be a reserve currency only if others are willing to accept it as such, time may be running out for the dollar.” Washington’s policies may be on the verge of killing the goose that laid the golden egg–the dollar.
    And finally, this gem: “This wartime spending has undoubtedly been a major contributor to our present economic collapse.” Yet Washington wants to remain the global cop, pursuing ill defined interests in the most remote regions of the world. Of course, this is all tied to the massive borrowing necessitated by the wars and occupations, borrowing which in turn is killing the goose.
    But where is the call for course change? The foreign policy mob is largely in sync, happy to please their underwriters, lemmings marching into the sea.
    http://economistsview.typepad.com/economistsview/2009/07/stiglitz-the-un-takes-charge.html#more

    Reply

  23. Richard Blair says:

    As one of those in the 9.1%, who is going to be entering the 18.7% at some point in the future, I’m very depressed about my future prospects. Why do I even have to consider relocating out of the country just to live and be able to get health coverage (I’m 55, and that’s a continuing concern to me – I’m not going to be a healthy stud forever).

    Reply

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