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The Washington Times - The Real Unemployment Rate

Op-Ed

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By Representative Duncan Hunter

At first glance, the latest jobs report for the month of April shows some promising signs: 115,000 jobs created and a lower official unemployment rate, albeit only by one-tenth of a percent. Unfortunately, things are not always what they seem and, in this instance, a closer look reveals something much different.

Overshadowing April's small job growth is the overwhelming number of Americans who have given up looking for work and dropped out of the labor force altogether. According to the numbers, 522,000 people simply gave up their job searches. Some grew tired and frustrated. Others perhaps decided to return to school or start retraining, in hope of following a new career path. No matter the reason, they are unemployed and therefore should be counted along with every other person without a job.

Not so. Instead, the official unemployment rate treats this subset of Americans, totaling as many as 88 million people, as if they just vanished.

Call it what is, an accounting gimmick intended to make the unemployment rate appear lower by purposely ignoring millions of Americans who should otherwise be listed as unemployed. Compared to the official unemployment rate of 8.1 percent, the civilian labor-participation rate now registers at 63.6 percent, its smallest size since the 1980s.

Counting those not in the labor force, but who have indicated a desire to work would put the national unemployment rate somewhere around 11 percent. An alternative measure calculated by the Bureau of Labor Statistics, the U-5 rate, one of six measures calculated monthly that incorporates many of these individuals, reports a jobless rate of 9.5 percent.

The U-5 rate specifically calculates those who are considered "marginally attached" to the workforce, meaning these individuals are not in the labor force, but are available and ready to work. Since these individuals are not recorded as looking for work in the weeks preceding the monthly jobs survey, they are not counted in the official unemployment rate.

The fact that more Americans are dropping out of the workforce than new jobs are being created is troubling. At the same time, it is disingenuous for the White House to take credit for miscalculated job growth while millions of Americans are frustrated and discouraged to the point that they are giving up their job searches.

Addressing this backslide in the labor force presents a significant policy challenge, but no less important is coming to the realization that these unemployed Americans are as much a part of this country as those who the federal government selectively counts and highlights each month when the official unemployment rate is announced.

They deserve to be counted. And factoring them into the calculation should not be viewed as an attempt to perpetuate grandstanding or finger-pointing. The value is in the insight and understanding provided to policymakers, taxpayers and anyone else with a real interest in job creation and economic recovery, based on a reliable and honest assessment of the actual unemployment situation.

Several months ago, I introduced H.R. 4128, the Real Unemployment Calculation Act in the House of Representatives. The legislation would force the Bureau of Labor Statistics to cite the current U-5 calculation - consisting of people marginally attached to the workforce - as the primary unemployment measurement of the federal government.

Every administration and lawmaker has an obligation to be straightforward and truthful with the American people. Calling attention to a lower unemployment rate, knowing full well that millions of Americans are on the sidelines and going uncounted, is an attempt to mislead others on the conditions that most Americans know exist.

Americans are always eager for the truth, no matter how hard it is to take. Continuing to distract and base policy on questionable or incomplete information is a disservice to every American, working or not, who is committed to a successful and prosperous future for themselves and the entire country.


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