Unemployment Rate Remains High as Recession Drags On
The official unemployment figure in July was 9.4% But U.S. News and World Reportsays that number is not accurate. In fact, the real unemployment rate is around 20.6%, which makes this Great Recession very close to a Great Depression. The official unemployment numbers don't include people who have given up looking for work because they can't find a job and it doesn't include people who are working part time because they can't find full time employment.
The problem is that many of the people one would think of as "unemployed" are not included in this unemployment rate. For one, the Bureau of Labor Statistics does not count unemployed people who have been discouraged by the labor market and have given up looking for work. You are counted as a "discouraged worker" if you are available to work, want to work, and tried to look for work in the past year but gave up within four weeks for reasons including the belief that no work is available. The fact that the national unemployment rate excludes these discouraged workers has led many observers to believe it does not reflect the "real" level of unemployment. "Ask the average person if he or she is unemployed, and there is little hesitation in giving you an answer, but that may not agree with government definitions," says John Williams, an economist who examines government statistics at shadowstats.com.
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So if you care not just about people who meet the official definition of "unemployed" but also about people who are dropping out of the labor force, 2009 seems to be trailing 1982 in terms of the health of the labor market. Williams says that when he takes into consideration people who haven't looked for work in more than a year because they can't find jobs, the real unemployment rate today goes all the way up to 20.6 percent by his calculations. "It won't take much to get it to the worst since the Great Depression," he says.
Until new jobs are created there will be no recovery from the recession. All this talk of green shoots and a jobless recovery is so much smoke and mirrors. The U.S. economy depends on the consumer buying things. When consumers can't find employment, that engine comes to a screeching halt. Job creation should be the top priority of the government right now and one easy way to do that is to create incentives for companies to hire workers, such as a moratorium on paying employment taxes for small businesses and tax credits for new hires.
