Politics

The Real Unemployment Rate Is Much Higher Than 5.3 Percent

| by Will Hagle

Today Washington is touting good news for the American economy. The country added 223,000 in June and decreased the unemployment rate to 5.3 percent, according to The Washington Post.

The Bureau of Labor Statistics is optimistic about the nation’s economic outlook, as the slow but steady recovery from the financial crisis continues. The new unemployment rate is the lowest it has been in seven years, since President Barack Obama’s first year in office.

Although the Obama administration understandably wants to send the message that its programs to get the country back on track financially are working, many in Washington are telling a different story.

The real unemployment rate, as Sen. Bernie Sanders said in January, is much higher than 5 percent. Sanders had both positive and negative critiques of Obama’s economic policies after a similar Department of Labor report released at that time.

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“I think the best part was the president’s recognition that, in fact, we are in much better shape than we were six years ago, when Bush left office and when we losing 700,000 jobs a month,” Sanders said, reports Newsmax. “I think the weakest part is that there was not a full recognition that, while we have made enormous progress, the reality is that real unemployment is not 5.5 percent. It is 11 percent, including those people who have given up looking for work and are working part time.”

Across the political aisle, businessman Donald Trump is spouting a similar message about the nation’s “real” unemployment. “Our real unemployment is anywhere from 18 to 20 percent,” Trump said during his campaign announcement speech. “Don’t believe the 5.6. Don’t believe it.”

While Trump’s views on social issues are vastly different than those of Sanders, at least both understand that fixing the economy isn’t as simple as reporting a low unemployment rate. The country has serious labor issues, and no one seems to be talking about them.

A CNBC article published on July 2 shows how the Bureau of Labor Statistics also publishes a figure called “U-6,” which accounts for the “total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers.”

The most recent U-6 rate was 10.5 percent. That’s a closer statistic to the “real” unemployment rate Trump and Sanders describe.

Considering the rise of automated technology, transfer of jobs overseas and changing trends in the global workforce — 2.6 percent of all Americans now work from home, for example — the future of labor in America is entirely uncertain.

There’s a reason progressives are speaking out against the Trans-Pacific Trade Partnership. The U.S. can’t afford to keep losing middle class and low-wage jobs to foreign countries.

Either the business climate in America needs to be transformed — as Trump would suggest — or a federal jobs program needs to be put into action — as Sanders would suggest.

Either way, it’s clear the situation in the U.S. economy is much worse than the low 5.3 percent the Bureau of Labor Statistics describes. The situation is improving, but the outlook still seems grim.

Sources: The Washington Post, Newsmax, CNBC, PolitiFact, Global Workplace Analytics

Image Source: Gage Skidmore/Flickr