Page last updated at 09:13 GMT, Friday, 5 February 2010

US jobless numbers hide scale of problem

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Te Ramos is a 60-year-old former construction worker who is now dependent on free food pantries and a soup kitchen.

By John Mervin
New York Business Editor, BBC News

The headline number only reveals a small part of the problem.

An official US unemployment rate that hit 10% last year, and seems set to stay there or thereabouts for months yet, already makes grim reading.

Yet there's growing concern that even that large and unpleasant number doesn't do justice to the size and severity of America's problem with jobs, or the lack thereof.

Dig beneath the headline figure on each monthly jobs report and there are now plenty of other horrors to be found.

Take the problem of long-term unemployment. In the eyes of the Bureau of Labor Statistics, which does the counting, the long-term unemployed are people who have been unemployed for more than six months.

They now make up roughly 40% of all unemployed. That's more than six million people who have been out work since last summer at least.

Real deprivation

As America's politicians and media have tried to grasp the full extent of the country's economic problems, they have inevitably looked for comparisons with previous periods of recession and slow growth.

However you count them, the millions of unemployed are going to present the president with a huge problem for many months to come.

So a common comparison these days is the recession of 1982-83 - that's the last time America grappled with 10% unemployment.

Which means it's chilling to note that it now takes twice as long (more than 20 weeks) as it did in 1982-83 for an unemployed person to find their next job.

Unemployment is always nasty. But it's even worse when it's accompanied not just by stress and anxiety but by real deprivation.

That is the experience of increasing numbers of Americans as unemployment benefits run out before the next job can be found.

Yet even this doesn't do justice to the sheer scale of America's problem.

Bigger number

Read a little further through the Bureau of Labor Statistics' monthly report and jobless rates that are already way too high for comfort, only get higher.

President Obama
Unemployment may have taken Obama's focus away from healthcare

Like all developed economies, the US has arrived at its method of counting the unemployed over many years and via some controversial choices.

As a consequence, the headline unemployment rate, the one that's still stubbornly close to 10%, is in fact a rather narrow measure.

To be counted in that oft-reported tenth of the labour force you have to be out of work, and have actively looked for a job in the past four weeks.

It's the four weeks requirement that cuts out a lot of people who would undoubtedly like a job, if there were any jobs to be applied for, much less secured.

Don't worry, the Bureau does count those people - it just doesn't count them in the official unemployment rate, the one that gets reported first and most frequently by journalists battling for space and air time.

Instead, they get defined as things like "marginally attached" or "discouraged" workers.

This allows the Bureau to offer "alternative measures of labour underutilisation", which, to the untrained ear, sounds like awful gobbledygook and unemployment by another name.

And if you take the widest of these measures, which in plain English counts everyone who doesn't have a full time job, and blames that on economic reasons (as opposed to blaming it on being sick, old, or in training) then America's "labour underutilisation" rate went past 17% at about the time its "unemployment" rate hit 10%.

A rate of 17% presents everyone with a picture of an American economy where more than one in six people who want a job, can't get one.

Crisis

In this picture, President Obama's sudden burst of initiatives to create jobs, while the healthcare bill falls off the agenda, doesn't just look like a choice to move away from a losing battle.

Unemployed people at a jobs fair in Los Angeles
There are more people unemployed than the official data shows

Because if America's economy has moved out of recession, it remains mired in an unemployment crisis.

However you count them, the millions of unemployed are going to present the president with a huge problem for many months to come.

Whether they're "unemployed," "marginally attached" or "discouraged," they're all still suffering in what President Obama's economic advisor Larry Summers recently called the "human recession".

And while their lack of a job may not be counted in the headline numbers, come the November mid-term elections, their votes will be.



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