Saturday, August 02, 2008


The Bureau of Labor Statistics, as Atrios points out (and as Kevin ... also discussed in Harper's), keeps an array of data of unemployment.  For some reason, which I'll say is probably political expediency,  the "U3," which is basically all those who are out of work AND seeking work, is our official rate.  But the U3 does not count people who have given up after months of trying and who still want to work.  The U6, " Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.." Has a different and more comprehensive look at unemployment.  Click on the graph to see full size.  You'll note that U3 is 5.7 and U6 is 10.3.

As Kevin Phillips points out, the "truth," or at least a better picture of the various truths that one can glean about an economy, could set us free for some real discussion:

"The corruption has tainted the very measures that most shape public perception of the economy—the monthly Consumer Price Index (CPI), which serves as the chief bellwether of inflation; the quarterly Gross Domestic Product (GDP), which tracks the U.S. economy’s overall growth; and the monthly unemployment figure, which for the general public is perhaps the most vivid indicator of economic health or infirmity. Not only do governments, businesses, and individuals use these yardsticks in their decision-making but minor revisions in the data can mean major changes in household circumstances—inflation measurements help determine interest rates, federal interest payments on the national debt, and cost-of-living increases for wages, pensions, and Social Security benefits. And, of course, our statistics have political consequences too. An administration is helped when it can mouth banalities about price levels being “anchored” as food and energy costs begin to soar.
The truth, though it would not exactly set Americans free, would at least open a window to wider economic and political understanding. Readers should ask themselves how much angrier the electorate might be if the media, over the past five years, had been citing 8 percent unemployment (instead of 5 percent), 5 percent inflation (instead of 2 percent), and average annual growth in the 1 percent range (instead of the 3–4 percent range). We might ponder as well who profits from a low-growth U.S. economy hidden under statistical camouflage. Might it be Washington politicos and affluent elites, anxious to mislead voters, coddle the financial markets, and tamp down expensive cost-of-living increases for wages and pensions?" [Number's Racket, Harpers, May 2008]