Thursday, February 10, 2011

Why real, permanent, structural unemployment is closer to 20%

"If you ask people how an unemployed person stops being unemployed, they'll probably say that the person gets a job. But that's not the only answer: A person can stop being counted as unemployed if she gives up looking for a job. That's the worst of all worlds, of course. Giving up on working when you want a job is bad for income, for skills, and even for health and happiness. But as this graph from Mike Konczal shows, it's become increasingly common" (Washington Post).

SOURCE: Washington Post

If we've explained this once, we've explained it a thousand times. The definitions are all there for anyone to read. This isn't hyperbole, it's reality, whether you choose not to believe in it, or not. The true rate of unemployment that we all feel is called U-6 Total Unemployment, it's defined by the U.S. Bureau of Labor Statistics, as follows:

"U-6 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.

NOTE: Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule. Updated population controls are introduced annually with the release of January data."

The real numbers go like this:

Not Seasonally Adjusted
Jan 2010 Dec 2010 Jan 2011
18.0 16.6 17.3

If you believe these numbers aren't also understated, you have far greater faith than I do.

The fact that these numbers are "coming down" overall is ZERO aid or comfort to the millions of humans living in distress, despair, and depression due to these numbers. This isn't because they are sick people, it's because humans can only take a certain amount of stress and dire economic conditions are a major cause of depression. You'd develop clinical depression pretty quickly, too, if you were among these millions. Also, given the evolution of market economies, it's very highly likely that these numbers are the New Normal. They'll plateau here, and then get worse again with the next "correction."

We can't afford to keep stalling. It's time for a U.S. Basic Income and Global Basic Income.