A person who is looking for a full-time job that pays a living wage — but who can’t find one — is unemployed. If you accept that definition, the true unemployment rate in the U.S. is a stunning 26.1%, according to an important new dataset shared exclusively with “Axios on HBO.”
This is one of the many reasons I never buy into the notion that the stock market has any relationship to the economy. When companies lay-off thousands of workers, investors reward them; when American companies move overseas, investors reward them, too. The Stock Market Plutocrats sees employees as a burden, not as an asset.
Why it matters: The official unemployment rate is artificially depressed by excluding people who might be earning only a few dollars a week. It also excludes anybody who has stopped looking for work or is discouraged by a lack of jobs or by the demands of child care during the coronavirus crisis.
- If you measure the unemployed as anybody over 16 years old who isn’t earning a living wage, the rate rises even further, to 54.6%. For Black Americans, it’s 59.2%.
This is a disaster, and of course the deception started during the Age of Empire, right about the same time as the US Supreme Court (those ACTIVIST JUDGES!) ruled that corporations are people my friends (as are fetuses if Justice Coathangers gets on the court, but that’s another post):
The backstory: The official definition of unemployment can be traced back to the 1870s, when a Massachusetts statistician named Carroll Wright diagnosed what he referred to as “industrial hypochondria”.
- By restricting the “unemployed” label to men who “really want employment,” Wright managed to minimize the unemployment figure.
- Wright went on to found the Bureau of Labor Statistics, and he brought his unemployment definition with him.
- To this day, to be officially counted as unemployed you need to be earning no money at all, and you need to be actively looking for work.
And when there is no work to be found, well, you slip off being counted and the unemployment rate remains artificially low.
By the numbers: In January, when the official rate of unemployment was 3.6%, the true rate was seven times greater — 23.4%. That’s according to new calculations from the Ludwig Institute for Shared Economic Prosperity, founded by Gene Ludwig, a former U.S. Comptroller of the Currency.
- “I was shocked,” he tells Axios on HBO, “that a quarter of the population that want work can’t earn a living wage.”
- The recession made everything worse. Only 46.1% of white Americans over the age of 16 — and a mere 40.8% of Black Americans — now have a full-time job paying more than $20,000 per year.
You may recall earlier this week that RNC Chair Ronna ROMNEY McDaniels tried to claim that the average American was making about $400,000 Ameroes per year. And by average, she means the average Romney.