The national unemployment rate ticked down slightly to 5.4 percent in April — a rate not seen since May 2008 — the U.S. Bureau of Labor Statistics recently reported. While this is welcome news, government statistics mask economic troubles that continue to plague millions of Americans years after the end of the last recession.
The national unemployment rate ticked down slightly to 5.4 percent in April — a rate not seen since May 2008 — the U.S. Bureau of Labor Statistics recently reported. While this is welcome news, government statistics mask economic troubles that continue to plague millions of Americans years after the end of the last recession.
For starters, the widely-reported “U-3” unemployment rate only includes those who are actively seeking employment. And more and more job-seekers are getting discouraged and giving up the job search altogether. This is why the unemployment rate has declined even as the civilian labor force participation rate has dropped significantly from its peak of 67.3 percent in 2000 to 62.8 percent today — hovering near a 37-year low.
The broader U-6 measure of unemployment, which includes those who want to work but have gotten so discouraged by their unsuccessful job search that they have given up, and those who want to work full-time but have had to settle for part-time work, remains double the U-3 rate, at 10.8 percent.
But even this does not provide the full unemployment picture. In 1994, the BLS stopped including long-term discouraged workers, who have been unemployed for more than a year, in its statistics. Reinserting this group would yield an unemployment rate of 23 percent, according to John Williams of ShadowStats.com.
A Harris Poll conducted for Express Employment Professionals reveals the depths of would-be workers’ despair, finding that fully 40 percent of those unemployed have given up looking for work.
For more than six years, increased government spending and the Federal Reserve’s quantitative easing and zero interest-rate policies have failed to restore prosperity, succeeding only in fostering more debt, reinflating the equity and housing bubbles for the next crash and destroying any incentives to save or eliminate malinvestments.
Until these monetary and fiscal policies are reversed, expect more boom-and-bust business cycles, more erosion of lower- and middle-class wealth and more massaged government statistics.