Friday, August 24, 2012

False Unemployment Numbers


The US Labor Department declared that the unemployment rate has dropped to 8.2 percent. While economists applaud the latest news, the reality is improvement comes only after 3 million jobless Americans are unaccounted for. 

While job creation exceeded expectations for January, those experiencing long-term unemployment — those jobless for longer than six months, that is — remains at a record high. 

In a new report from the Pew Charitable Trusts, it’s revealed that those suffering the longest from the unemployment epidemic exceed any monthly statistic dating back to the World War II. The Labor Department figures that 5.5 million would-be workers have been without employment for 27 weeks or longer, accounting for around 42.9 percent of the total tally of unemployed Americans.

The consulting firm Hamilton Place Strategies based out of Washington estimates that as many as 3 million additional unemployed workers have been without jobs for just as long but are not taken into consideration by the US government. For those, the Department of Labor simply stops counting them. 

The government has also identified around 2.8 million Americans “marginally attached” to the job market in January. Per their own definition, that accounts for those who want to work and have looked for working during the last year but have not concentrated their efforts on the job hunt during the last month. 

They are also not accounted for in the Labor Department’s unemployment figure.

Speaking before the US House of Representatives Committee on the Budget, Federal Reserve Chairman Ben Bernanke addressed the issue. He admitted that the US economy “has been gradually recovering from the recent deep recession,” but called long-term unemployment figures still “particularly troubling.”
“More than 40 percent of the unemployed have been jobless for more than six months, roughly double the fraction during the economic expansion of the previous decade,” explained Bernanke. “We still have a long way to go before the labor market can be said to be operating normally.”

Easy for Mr. Bernake to say - he has a job.