But before you pop the cork on that champagne and start the celebration, it would probably be good to examine some of those government figures. According to the Labor Department, there were 84,000 new jobs created in the month of October. That figure alone should be enough to tell you that there must be more unemployed people in the United States after October -- not less. That's because at least about 150,000 jobs must be created in a month just to keep up with the amount of new workers entering the job market.
That means that October ended with about 66,000 more unemployed people in America than at the end of September. In other words, real unemployment actually went up in October instead of declining. So how did the official unemployment rate show a drop? The sad fact is that the Labor Department doesn't count all of the unemployed people in America. They only count those who can be verified as seeking employment in the last four weeks. Anyone who has given up, or don't know where else to look for work, or can't be verified by the government as seeking work (because they no longer go to their local unemployment office) is simply not counted in the official unemployment figure.
So while the government says unemployment has dropped by 0.1%, the reality is that more people have entered the groups of unemployed who are no longer counted. The government labels those they no longer count as being "marginally attached" to the labor force. By giving them this label they somehow justify not counting them, and therefore put a better face on unemployment than it actually deserves.
According to the Labor Department, there were 13.9 million unemployed people in October (people who had looked for work in the last four weeks. If this is 9% of the workforce, then that means the workforce is about 154.5 million people (those counted as unemployed plus those who are employed). In addition, they estimate that there are 2.6 million people "marginally attached" to the workforce. This is undoubtedly an undercount, but using this figure it means the real total workforce is about 157.1 million and the real number of people unemployed is over 16.5 million. Then we have 8.9 million people (already counted as part of the workforce) who are "underemployed", who are working part-time because they can't find a full-time job. Here are the percentages:
9.0% -- the official government figure (those who have looked for work in the last four weeks).
10.5% -- official figure plus the "marginally attached" (an undercount, but closer to the real unemployment figure).
16.2% -- unemployed plus the underemployed. This is the figure that we really need to worry about, because it means that at least 25.4 million people in this country are looking for full-time employment but can't find it. Since economists usually count 3% unemployment (about 4.7 million) as "full employment" (because there will always be a small amount quitting and looking for new jobs or only work seasonally), that means this country badly needs to create at least 20.7 million jobs to reach full employment.
If we created 150,000 jobs a month, we wouldn't even make a dent in those 20.7 million needed jobs, since that would basically just take care of the new workers entering the workforce. If we created 300,000 a month, it would take 11.5 years to reach full employment (and we haven't created that many jobs in any month this year). Frankly, we are looking at a sustained period of high unemployment -- at least several more years. And with the Republicans blocking all job creation bills, that could easily stretch into double-digit years.
Go ahead and pop that champagne cork if you want to, but personally I don't see anything to celebrate..
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