From Quartz online (http://qz.com/), exclamation point mine:
Why America’s impressive 5% unemployment rate feels like a lie for so many
By Sarah Kendzior April 20, 2016 Link
On Apr. 14, Bloomberg News announced that jobless claims in the US have reached their lowest level since 1973. “All other labor market data are telling us that the economy is creating a lot of jobs,” economist Patrick Newport told the outlet. “This is further confirmation that the labor market is strong.”From the US Bureau Labor of Statistics we have the Official U-3 Unofficial Rate of 5.1% but also two higher rates U-5 and U-6 of 6.1% and 9.9%, respectively.* Now this doesn't reflect the labor non-participation rate, or the size of the 1099 Army, which we don't have to look for at the BLS because Quartz online put them in their article:
That same day, thousands of fast food workers, airport workers, home care workers, and adjunct professors took to the streets across the country to protest brutal labor conditions and demand a $15 minimum wage. Most of these workers make far below $15 per hour. Some make as low as $7.25 per hour, the current federal minimum wage. Most lack benefits. Some, like adjunct professors, have contingent, temporary jobs, sometimes consisting of only one poorly paid course per year. Many low-wage employees work two or even three jobs in an attempt to cobble together enough income to cover basic needs.
According to the US Bureau of Labor, all of these workers are considered “employed.” They are viewed as part of the American economy’s success story, a big part of which is our 5% unemployment rate. As president Barack Obama boasted in February: “The United States of America right now has the strongest, most durable economy in the world.”
But Obama’s claims of a strong economy ring hollow for the many thousands of workers—in professions ranging from those which require a GED to those which require a PhD—who say they cannot make enough money to survive. And these people, at least, are working. Those who cannot find work at all tell an even grimmer story.
There are three main reasons the vaunted economic recovery still feels false to so many. The first is the labor participation rate, which plunged at the start of the Great Recession and discounts the millions of Americans who have been out of work for six months or more. The second is “the 1099 economy,” a term The New Republic’s David Dayen coined to refer to the soaring number of temps, contractors, freelancers, and other often involuntarily self-employed workers. The third is a surge in low-wage service jobs, coupled with a corresponding decrease in middle-class jobs.This non-participation rate includes the long-term unemployed, some 2.1 million people. If we divide the 62.6% of today into the 67.3% of 2008, we get a 7.5% of today's workforce who are now outside of it.
Since 2008, the labor participation rate has fallen from a high of 67.3% in 2000 to 62.6% today. That 62.2% represents a 38-year low, which puts Bloomberg’s claim of a 42-year-low in joblessness in perspective. The jobless number is “low” only because more people are no longer considered to be participating in the workforce.
100% X (67.3 / 62.6 - 1) = 7.5%
But also there's this huge, and I mean immense, Army of 1099 Workers:
Many of the long-term unemployed are older workers who once had stable middle-class jobs with benefits. Some, like their younger peers, have resorted to participating in the “1099 economy,” willingly or unwillingly. Freelance and contract workers move from low-paying gig to gig in professions like journalism, arts and entertainment, private transportation, and higher education, trying to scrape together enough cash to survive.And how big is the size of the 1099 Army??? 15.8%. Now what would we expect it to be based on the U-5 and U-6 Rates?
The number of Americans working in this capacity grew from 10.1% in 2005 to 15.8% in 2015, according to new research from labor economists Lawrence Katz and Alan Krueger. David Dayen describes their life as stressful and uncertain: “You’re cut off from any safety net that relies on employers. You have an unpaid, part-time job consisting of getting your next job and making sure you get paid for your last job … You have no advocates for you in the workplace, and little bargaining power to improve your lot.”
9.9% - 6.1% = 3.8 %.
So what's our real unemployment rate? We take the U-6 rate, plus the decrease in participation rate since 2008, plus the 1099 Army, and we obtain the following true unemployment rate of 33.2%
9.9% + 7.5% + 15.8% = 33.2%
To be charitable, we should subtract the difference between the U-5 and U-6 rates of 3.8%.
33.2% - 3.8% = 29.4%
This is an unemployment rate worthy of the Grea-a-a-t Depression where nobody worked, and everyone was on the street, begging! 'Til Franklin Roosevelt came and saved us all.
Check the rest of the Quartz online article out.
Now you know why people want to vote for Trump? And rejected the whole GOP establishment? And loathe Hillary?
* Nota bene:
(U-5 is the total of unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force.)
(U-6 is the total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.)