Public Comment

Many members of the public are aware that the real unemployment rate is higher than the Bureau of labor statistics (BLS) monthly estimate. But it is not widely known that as the rate of unemployment climbs, the gap between the real rate and the BLS widens. In other words, to avoid fully reporting as many unemployed as the number of jobless workers grow, the data excludes from the calculations an increasing segment of unemployed workers.

Here is how it works. The BLS counts as unemployed jobless workers who have been actively rather than passively seeking jobs. That is a reasonable approach when there are plenty of jobs around, But when the economy is in recession, as it is currently, the available jobs are too few to accommodate as many workers. After a long period job searching many workers became discouraged. Since they stop searching as actively even though they want to work they are not counted as unemployed. Instead they are defined as not in the labor force.

Yet the BLS acnowledged that there were about 10 million of these workers in the labor force who want to work. As a recession deepens, they make up a growing number of unemployed and should be officially counted as unemployed. Because they are not defined as jobless, the BLS sleight of hand substantially lowers the real rate.

Many other workers as well are not counted because they were not considered active enough in pursuing a job. Workers who had checked the newspapers without locating alisted job in which they could apply their skills are not counted as unemployed. A jobless worker taking a brief course on computers to increase the chances of finding work is not counted as unemployed. It seems that the BLS has had considerable experience disguising bad news.

So how poorly is the labor market doing? Actually, very poorly. According to many experts on unemployment issues, the real unemployment rate is between 20% to 25% rather than the official rate of 11.1%. Clearly, we cannot trust the BLS.