Shame on Gallup

I posted this on facebook earlier, but I figure it might be lost on my innumerate friends.



http://ift.tt/1C3FPkF

Quote:

Here's something that many Americans -- including some of the smartest and most educated among us -- don't know: The official unemployment rate, as reported by the U.S. Department of Labor, is extremely misleading. Right now, we're hearing much celebrating from the media, the White House and Wall Street about how unemployment is "down" to 5.6%. The cheerleading for this number is deafening. The media loves a comeback story, the White House wants to score political points and Wall Street would like you to stay in the market. None of them will tell you this: If you, a family member or anyone is unemployed and has subsequently given up on finding a job -- if you are so hopelessly out of work that you've stopped looking over the past four weeks -- the Department of Labor doesn't count you as unemployed. That's right. While you are as unemployed as one can possibly be, and tragically may never find work again, you are not counted in the figure we see relentlessly in the news -- currently 5.6%. Right now, as many as 30 million Americans are either out of work or severely underemployed. Trust me, the vast majority of them aren't throwing parties to toast "falling" unemployment. There's another reason why the official rate is misleading. Say you're an out-of-work engineer or healthcare worker or construction worker or retail manager: If you perform a minimum of one hour of work in a week and are paid at least $20 -- maybe someone pays you to mow their lawn -- you're not officially counted as unemployed in the much-reported 5.6%. Few Americans know this. Yet another figure of importance that doesn't get much press: those working part time but wanting full-time work. If you have a degree in chemistry or math and are working 10 hours part time because it is all you can find -- in other words, you are severely underemployed -- the government doesn't count you in the 5.6%. Few Americans know this. There's no other way to say this. The official unemployment rate, which cruelly overlooks the suffering of the long-term and often permanently unemployed as well as the depressingly underemployed, amounts to a Big Lie. And it's a lie that has consequences, because the great American dream is to have a good job, and in recent years, America has failed to deliver that dream more than it has at any time in recent memory. A good job is an individual's primary identity, their very self-worth, their dignity -- it establishes the relationship they have with their friends, community and country. When we fail to deliver a good job that fits a citizen's talents, training and experience, we are failing the great American dream. Gallup defines a good job as 30+ hours per week for an organization that provides a regular paycheck. Right now, the U.S. is delivering at a staggeringly low rate of 44%, which is the number of full-time jobs as a percent of the adult population, 18 years and older. We need that to be 50% and a bare minimum of 10 million new, good jobs to replenish America's middle class. I hear all the time that "unemployment is greatly reduced, but the people aren't feeling it." When the media, talking heads, the White House and Wall Street start reporting the truth -- the percent of Americans in good jobs; jobs that are full time and real -- then we will quit wondering why Americans aren't "feeling" something that doesn't remotely reflect the reality in their lives. And we will also quit wondering what hollowed out the middle class.

I've been hearing this Op-Ed touted around a lot lately and I have to say it's very misleading. A lot of people have been reporting or have interpreted it to mean that the current Presidential administration is fudging the unemployment statistic to make it lower than what it really is. This is untrue. The U.S. Department of Labor has used the same formula for almost 50 years: It is the portion of the workforce that is not currently employed. People who are not in the workforce include children, full-time college students, retired people, stay-at-home parents - anyone who is not either employed or actively looking to be employed. This includes, and has always included, people who would take a job if offered one, but haven't looked or applied for one in over a month. And of course it would be a bit absurd to consider someone who is underemployed to be unemployed.



So anytime you have ever heard someone refer to an "unemployment rate" in the past 50 years, that is what they've been referring to. Nothing new here. And it's not exactly a secret either: it's made very clear how all this is calculated in the US Dep of Labor reports. So, Mr. Clifton's big exposé on this "Big Lie" is a big flop.



Mr. Clifton also implies that if they included underemployed/discouraged workers in the statistic, that the rate would not have shown the same improvement that the unemployment rate has. Well there is a statistic that includes those - the U-6 rate.



This is the official Unemployment rate over the past 15 years:





This is the Unemployment rate including discouraged workers and underemployed people:





It doesn't exactly show the picture that Clifton painted. It doesn't matter whether you include discouraged workers and the underemployed, the workforce has improved significantly in recent years.

Shame on Gallup