Unemployment beyond the first numbers

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by Eleanor Arnason | April 23, 2009 • The official unemployment rate — called U3 — was 8.5% in March. That is one in eleven people. However, U3 is not considered accurate, because it only counts those who are unemployed and currently looking for work.

Facts and Fictions – Eleanor Arnason writes science fiction and fantasy. Occasional posts are republished with permission from her blog.

A better figure is U-6, which counts those currently looking for work + “marginally attached workers.” These are people who are not currently looking for work, because they are discouraged, have impediments to their work search such as lack of childcare or a car, or have taken a part time job, but want a full time job. The U-6 figure was at 16% in March, when U-3 was at 8.1%.

There is another measure being used by economists who feel even U-6 is not sufficiently accurate. This is the percentage of the civilian non-institutional population aged 21-54 (the prime working years) not working. To compare over time, economists use the figure for men, since fewer women worked in the past — back when one income could support a family.

In February, there was a ten point difference between this figure and U-3: U-3 was 8%, and this measure was 18%. In the 1970s, the difference between these two figures was 3%. This is more evidence that U-3 does not reflect actual unemployment — and that the problem has gotten worse over time.

At present, the unemployment figure for working age men and women not in institutions is 23%.

So, if you use U-3, one person in eleven is out of work. If you use U-6, one person in six is out of work. If you use the last measure, which must have a name but I can’t find it, the unemployed are almost one in four.

Now, there are still two groups who are not being measured: those in prison and those in the armed forces.

The US keeps 2 million people in prison. Most are not financially independent and would be working or looking for work, if not in prison. Many of these people are locked up for non-violent, behavior or status crimes such as possession of small amounts of illegal drugs while African American. So our drug laws, and our desire to lock people up for non-violent, personal behavior crimes reduce our rate of unemployment.

The average US soldier these days seems to be a member of a racial minority or a working class white from a small town. To a considerable extent, these are people who could not find a decent job with any kind of future and joined the armed forces to make a future for themselves.

There are currently close to three million people in the US armed forces, per Wikipedia.

Because I am something of a numbers nut, I did some quick figuring. Per Wikipedia and the US Census, there are something like 151 million Americans between the ages of 21 and 54. Of these, 5 million are in jail or the armed forces. This is about 3.3%. (I am making the assumption that most of the people in jail or the armed forces are between 21 and 54.)

Anyway, this gives us a figure of 26% for Americans between 21 and 54 who are unemployed, in jail or in the armed forces. That is more than one in four.

This is not a good economy.

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