Here are two statistics that have appeared all over the media recently: The U.S. economy added 223,000 jobs in June, dropping the unemployment rate to 5.3 percent. We are told by politicians and commentators that the recovery marches on. Some economists now consider any unemployment rate below 5.5 percent to be “full employment.” Good times.
Tens of millions of Americans are confused, because for them it doesn’t feel like good times. Full employment is supposed to signal pressure on employers to offer better deals to workers. Wages should be moving up, but that isn’t happening for nine out of 10 workers. Earlier this year, a Pew Charitable Trusts report found that 70 percent of American households face financial stress, and 55 percent have a month or less worth of liquid savings in case of an emergency.
At some point, the misuse of statistics is not merely inaccurate or misleading, but crosses a line into outright cruelty in treating millions of Americans and their families as “nonpeople,” as vapor people.
It’s made even worse by the infantile state of American politics, in which everything must be all one thing or another, and there is no nuance, subtlety or gradation. Conceding any point is weakness, and giving an inch means you’re an Obama-lover or an Obama-hater. Only a few decades ago, this type of behavior would have been widely condemned as unpatriotic. Now, it’s television demographics.
Politics is nuance, subtlety and gradation, if you want to get anything done. But, there has to be some bedrock foundation of fact that players must accept. Copernicus got the sun/earth thing right. Gravity is a thing. The “official” unemployment rate, the one which is inevitably and relentlessly parroted each month in the media, is almost useless if you want to know about the labor situation.
A better measure is the “labor force participation rate,” which is the percentage of Americans who have a job or actively seek one. The participation rate has fallen to 62.6 percent, the lowest level since 1978, before most Long Island mommies went to work. Each year, millions of more Americans are giving up and are no longer part of the regular economy.
The federal Bureau of Labor Statistics (BLS) releases unemployment statistics each month, based on two surveys conducted very much in the style of an opinion poll. Sixty thousand random households and 160,000 businesses and government agencies are asked questions. From the answers, BLS extrapolates six different measures of unemployment, labeled U1 through U6. The 5.3 percent rate for June is U3, which measures people without jobs and have actively looked for work within the previous four weeks.
There are a lot of problems with U3. People who have given up and not looked for work in a month aren’t counted at all. People who are chronically unemployed, and in desperation, shovel snow or cut a lawn for an hour are counted as having a job. The BLS counts 148.8 million people as having jobs, but 23 million of them earn less than $5,000 a year. They count just as much as someone earning enough to support themselves and a family. Fifty million people earn less than $15,000.
The U6 measurement at least tries to include “discouraged” workers, “marginally” or “loosely attached” workers and part-time workers who want to work full time, but can’t find jobs. The U6 measurement for June was 10.5 percent (12.0 percent before adjustments for typical seasonal patterns).
The Gallup organization conducts its own unemployment surveys, which consistently show higher unemployment rates than BLS. Gallup defines a “good job”as one which provides at least 30 hours a week for a regular paycheck, and finds that only 44 percent of American adults have one.
The U.S. economy has now added jobs for 57 consecutive months. Fine. But, what kind of jobs?
Michael Miller (email@example.com) has worked in state and local government. He lives in New Hyde Park.