Unemployment remains underreported

Throughout his presidential campaign Donald Trump dismissed the jobs reports coming from Washington, saying they underreported unemployment and failed to recognize the true economic conditions. “Phony” and “unbelievable” were recurring themes.

When he spouted those statements back in the day, one would have hoped that were he to be elected he would develop a wholesale change to the statistics, reflecting the reality of the job market.

But, alas, he hasn’t.

Worse yet, he’s using the same methodology to push the narrative of how good he is for the economy, just as his predecessors did before him.

The June jobs report showed the economy added 223,000 jobs which pushed the unemployment rate down to 3.8%. Among Trump’s follow-ups was a June 17 tweet that read, “Our economy is perhaps BETTER than it has ever been. Companies doing really well, and moving back to America, and jobs numbers are the best in 44 years.”

Yes, the economy is doing quite well, and will be for a while thanks to some of his economic policies -- first and foremost the cut in corporate tax rates which is a real winner for the 70 million people employed by small businesses – but, when you know that a statistical measure that’s important to Wall Street and Main Street is broken, fix it.

How broken is it?  

First off, the Labor Department’s long-held means of recordkeeping discounts so-called discouraged workers, those who have given up looking for work, at least for the time being, because of a lack of prospects. Despite those workers being willing and able to work, government economists do not account for them in the general unemployment statistic, making the misguided assumption that they have dropped out of the workforce entirely. If they were taken into consideration they would add 378,000 to the ranks of the unemployed.




The generally-accepted unemployment rate also excludes another group of what the feds consider marginally-attached to the workforce. Currently, there are another 1.5 million able-bodied and un-retired Americans who had worked at one time yet have not looked for work for a variety of reasons that, according to the Labor Department, include scholastic and family responsibilities.

Accounting for both sets of workers there are 1.878 million people who are left out of economic concern. Were their numbers to be added to the general population of job seekers, as they should, total unemployment would rise to 7.978 million, pushing the unemployment rate to 5 percent.

The undercalculation does not end there. A good many non-government economists and those who take an active role in the analysis of private sector trends (financiers, entrepreneurs, etc.) believe that those who are underemployed should be accounted for. An underemployed individual is someone who, due to economic conditions, is working part-time at what was once a full-time job or, in some cases, is working at a new job that’s a considerable step down in terms of hours, income, and responsibilities than what was once had. There were 4.9 million Americans who fit this bill in May.



Add the underemployed to the unemployed and the total workforce available or active that is not meeting its full potential is 12.878 million. The resultant underemployment/unemployment rate is 7.9 percent.

That number – which is still likely underreported due to the Labor Department’s suspect methods of data collection -- is closer to what many families are feeling as they try to make ends meet. This “real feel” was never made more apparent than during the Great Recession when everyone knew that job rolls were even worse off than advertised. Then, it was widely accepted that the real unemployment rate was something close to or in excess of 20 percent although we were told that it never exceed 10 percent during the downturn.  

This is par for the course – the federal government openly manipulates data in its messages to the masses to paint a prettier picture of the circumstances they have some control over. This deliberate act is entirely political in nature, a means of saving face for and promoting, one, the executive branch and its myriad agencies and departments and, two, the elected officials who choose to inappropriately meddle in economic affairs through legislation.

By making unemployment appear lower than it is the powers-that-be ensure the media deliver a message that keeps enough Americans on their side, clamoring for more government intervention by making them believe that all previous regulations and stimuli have been meaningful and successful.


But, anyone who has been looking for gainful employment knows better. 

The President knows, too. He said us much on the campaign trail. 

It’s time for him to follow through on his statements and change the way we view and use the numbers. The decision makers in businesses and homes – and at the polls -- need to see the job market for what it is and not through rose-colored glasses.    

From the 25 June 2018 Greater Niagara Newspapers and Batavia Daily News