NEW YORK – The Bureau of Labor Statistics announcement that unemployment has dropped from 6.7 percent in March to 6.3 percent in April was partly attributed to some 800,000 workers dropping out of the labor force last month, reducing the labor participation rate to 62.8 percent, a new low for the Obama administration.
After adjusting the BLS unemployment number to what is known as “U-6” – a measure that includes total unemployed, plus all persons marginally attached to the labor force, plus total part-time employed for economic reasons – unemployment in April was 12.3 percent.
The amount (not seasonally adjusted) of Americans not in the labor force in April rose to 92,594,000, almost 1 million more than the previous month. In March, 91,630,000 Americans were not in the labor force, which includes an aging population that is continuing to head into retirement.
According to John Williams, an economist known for arguing the government reports manipulate “shadow statistics” of economic data for political purposes, drops in the unemployment rate as reported by the BLS have become virtually meaningless.
“The broad economic outlook has not changed, despite the heavily-distorted numbers that continue to be published by the BLS,” Williams writes in his subscription newsletter on ShadowStats.com. “The unemployment rates have not dropped from peak levels due to a surge in hiring; instead, they generally have dropped because of discouraged workers being eliminated from headline labor-force accounting.”
Williams recreates a ShadowStats alternative unemployment rate reflecting methodology that includes “long-term discouraged workers.” In 1994 under the Clinton administration, the Bureau of Labor Statistics removed that category from those considered “unemployed” in any of the government’s unemployment measures.
The BLS publishes six levels of unemployment, but only the headline U3 unemployment rate gets the press. The headline number does not count as unemployed the “discouraged” workers who have not looked for work in the past four weeks because they believed no jobs were available.
Williams has demonstrated that it takes an expert to truly decipher BLS unemployment statistics.
The U6 unemployment rate is the BLS’s broadest measure. It includes those marginally attached to the labor force and the “under-employed” – those who have accepted part-time jobs though they are looking for full-time employment. Also included are short-term discouraged workers who have not looked for work in the last year because there are no jobs to be found.
Since 1994, however, the long-term discouraged workers, those who have been discouraged for more than one year, have been excluded from all government data.
Williams calculates his “ShadowStats Alternative Unemployment Rate” by adding to the BLS U6 numbers the long-term discouraged workers.
He argues that his ShadowStats Alternative Unemployment measure most closely mirrors common experience.
“If you were to survey everyone in the country as to whether they were employed or unemployed, without qualification as to when they last looked for a job, the resulting unemployment rate would be close to the ShadowStats estimate,” Williams told WND.
The headline BLS unemployment rate has stayed relatively low because it excludes all discouraged workers, Williams argues.
As the unemployed first become discouraged and then disappear into the long-term discouraged category, they also vanish from inclusion in the headline labor force numbers. Those workers, however, are ready to take a job if one becomes available. They are unemployed and consider themselves to be unemployed, but the government’s popularly followed unemployment reporting ignores them completely.
Below is a more complete unemployment table that includes the seasonally adjusted unemployment percentages for U3 unemployment as well as the same for U6 unemployment, followed by the ShadowStats Alternative Unemployment rate, comparing April 2013 for March and April 2014.
Economy of part-time jobs
In August 2013, the House Ways and Means Committee documented that seven out of every eight new employees under Obama have been part-time employees.
“The headlines citing last week’s jobs report as the lowest unemployment rate in years may have been technically accurate, but they are also reminders that looks can be deceiving,” the House Ways and Means report noted at the time.
“The reality, as you dig into the latest jobs data, reveals that few are finding the full-time work they want and need, and many are forced to accept part-time employment.”
To support the argument, the House Ways and Means Committee produced the following table drawn from Bureau of Labor Statistics.
The House Ways and Means Committee linked to an article Associated Press published Aug. 4, 2013, that stated: “So far this year, low-paying industries have provided 61 percent of he nation’s job growth, even though these industries represent just 39 percent of overall U.S. jobs, according to Labor Department numbers analyzed by Moody’s Analytics.”
AP economics writer Paul Wiseman noted part-time work had made up more than 77 percent of the job growth so far that year, with part-time work defined as being less than 25 hours a week.
Appearing on PBS’s “McLaughlin Group” in October 2013, real estate mogul Mort Zuckerman said that “88 percent of the jobs that have been created this year (2013) are part-time jobs.”
“A large part of the reason for that number of part-time jobs, which is unprecedented in American history, is because people are apprehensive about the impact of Obamacare and the costs of Obamacare on full-time jobs,” he said.