Raghavan Mayur, president at TechnoMetrica Market Intelligence, follows unemployment data closely. So, when his survey for May revealed that 28% of the 1,000-odd households surveyed reported that at least one member was looking for a full-time job, he was flummoxed. "Our numbers are always very accurate, so I was surprised at the discrepancy with the government's numbers," says Mayur, whose firm owns the TIPP polling unit, a polling partner for Investors' Business Daily and Christian Science Monitor. After all, the headline number shows the U.S. unemployment rate today is 9.5%, with a total of 14.6 million jobless people. However, Mayur's polls continued to find much worse figures. The June poll turned up 27.8% of households with at least one member who's unemployed and looking for a job, while the latest poll conducted in the second week of July showed 28.6% in that situation. That translates to an unemployment rate of over 22%, says Mayur, who has started questioning the accuracy of the Labor Department's jobless numbers. Even Austan Goolsbee Has Been Skeptical Mayur isn't alone in harboring such doubts, nor is he the first to wonder about inaccuracies. For years, many economists have pointed to evidence that the government data undercounts the unemployed. Economist Helen Ginsburg, co-founder of advocacy group National Jobs For All Coalition, and John Williams of the newsletter Shadow Government Statistics have been questioning these numbers for years. In fact, Austan Goolsbee, who is now part of the White House Council of Economic Advisers, wrote in a 2003 New York Times piece titled "The Unemployment Myth," that the government had "cooked the books" by not correctly counting all the people it should, thereby keeping the unemployment rate artificially low. At the time, Goolsbee was a professor at the University of Chicago. When asked whether Goolsbee still believes the government undercounts unemployment, a White House spokeswoman said Goolsbee wasn't available to comment. Such undercounting of unemployment can be an enormously dangerous exercise today. It could lead to some lawmakers underestimate the gravity of the labor market's problems and base their policymaking on a far-less-grim picture than actually exists. Economically, and socially, that would make a bad situation much worse for America. "The implications of such undercounting is that policymakers aren't going to be thinking as big as they should be," says Ginsburg, also a professor emeritus of economics at Brooklyn College. "It also means that [consumer] demand is not going to be there, because the income from people who are employed isn't going to be there." Indeed, it will add additional stress to an already strained economy. Businesses that might start ramping up after seeing the jobless number drop could set themselves up for disappointment when customers don't appear or orders don't flow in. College Grads Serving Fries Plus, having a job today is quite different from what it was just a few years ago: Many Americans have had their hours cut and are working for less pay. A Pew Research survey found more than half of all adults in the labor force had either lost a job or suffered a reduction in income because of the recession. Ginsburg says the biggest source of undercounting comes from people who can't find a full-time job that they're qualified to do, for instance recent college graduates who take part-time jobs at fast-food joints or retail stores. Today, the Labor Department estimates that 8.6 million people are in this category. The federal government counts such people as employed. However, polls show that these folks actually consider themselves "unemployed" and "looking for a job," and probably accounted for a large chunk of TechnoMetrica's respondents. Jobless Workers Who Disappear Another major source of undercounting is the unemployed who've given up looking for jobs. The Bureau of Labor Statistics headline number counts as unemployed only people who have actively looked for a job in the previous four weeks. About 2.6 million people had pursued jobs in the past 12 months but, discouraged by the lack of opportunity, had stopped looking altogether. "Isn't it interesting that if you stopped looking for a job, you evaporate as a jobless person and are just not counted," says Gerald Celente, director of Trends Research Institute in Kingston, N.Y. Celente believes this kind of undercounting has suited the government politically. "It's what government does: Downplay disasters and amplify success." According to the Pew Research Center, a large number of people are out of jobs for a longer period during this economic downturn. The typical unemployed worker today has been out of work for nearly six months. That's almost double the previous post-World War II peak for this measure, which was 12.3 weeks in 1982-83. Indeed, if all of the truly unemployed were counted, the rate would be significantly higher. The BLS, in a data point titled "U-6," says it counted the total unemployment rate in June at 16.5%. Misreading Americans' Anxiety However, John Williams, founder of Shadow Government Statistics, says when accounting for the long-term unemployed, the jobless rate runs up to as much as 22% currently. Williams's newsletter, which analyzes flaws in government economic data, points out that such a rate isn't that far from the 25% it hit during the Great Depression. Both Celente and Ginsburg believe lawmakers' not-dire-enough view of unemployment is one reason why they didn't extend federal unemployment benefits. Of course, party politics is another deterrent. Ginsburg says the Administration's decision to tackle the health care reform over unemployment reflects its lack of priority. By taking his eye off one of the most fundamental issues affecting the country, President Obama has seen his popularity sink. The most recent Public Policy Polling survey says 45% of voters approve of the job he's doing, while 52% disapprove -- the first time Obama's disapproval ratings have exceeded 50% in this survey. It's obvious that Americans view unemployment more urgently than either lawmakers or the president. And if pollsters like Mayur or economists like Ginsburg and Williams are right, it will take longer to fix this hole because it's already bigger than Washington thinks.
Tagged: Austan Goolsbee, bureau of labor statistics, employment, jobless recovery, joblessness, jobs, Labor Department, real jobless rate, unemployment, unemployment benefits, unemployment benefits extension, unemployment rate $(document).ready(function() { try{ if(document.getElementById("articleCmntHdr")){ var cmstr=$("#articleCmntHdr").html(); var comnum=cmstr.match(/\d+/); $("#cmtCount").html('Comments: '+comnum+''); } }catch(e){} }); checkTextPref(); Print Email This .topText { display:block; } Pallavi Gogoi View all Articles » Financial WriterPallavi Gogoi covers banks and consumer finance. She is a prize-winning journalist who has written for USA TODAY, BusinessWeek, The Wall Street Journal and Dow Jones. Prior to that, she wrote for BusinessWeek for eight years, covering among other things consumers and retail. In 2008 and 2007, Pallavi won a "best feature" and "best continuing coverage" award and from The New York Press Club for her coverage of the meat cloning movement and her stories on Wal-Mart. In 2007, she also won a "Front Page" award from the Newswomen's Club of New York.
Read More SUBSCRIBE TO: RSS Twitter EMAIL: Pallavi Gogoi Katsumi Kasahara, AP TIME TO GO: 9 CEOs Who Need to Be Fired in 2010 - 24/7 Wall St. MINI WORLDS: America's Most Unusual Planned Communities - FORTUNE THE HARASSERS: Confessions of Former Debt Collectors - CNNMoney OOPS: 13 Tweets That Got People Canned - Huffington PostGOOD NEWS: Five Stocks That Could Make You Rich - The Motley Fool QUITTERS: Could You Live Without Your TV? - SmartMoney SMASH DISNEY: The Case for Breaking Up the Company - CNBC adsonar_placementId=1491054; adsonar_pid=1990767; adsonar_ps=-1; adsonar_zw=627; adsonar_zh=110 ;adsonar_jv='ads.tw.adsonar.com'; COMMENTS ( 47 ) Page 1 of 5 1 2 3 4 5 Next >> + Add Comment Sort By Newest First Threaded Highest Rated Oldest First Newest First Masser 1:59PM Jul 16 2010 to govttmute, we have elected a man that has no history or connection to this country, we can't expect him to remotely understand our interests or protect them. Why do you think that he wants to change everything, why do you think that Michelle spelled it all out when she said that for the first time she is proud to be an American - you figure it out. Reply Rate This Comment (0 RATINGS) AJGORM 1:58PM Jul 16 2010 Raise taxes to pay debt , Balanced budgets to lower spending and paying for a war we cant afford. as we outsource our jobs and sell off our assets spells transparency .. Reply Rate This Comment (0 RATINGS) Lbj033 1:57PM Jul 16 2010 IF THE CORRUPT DEMOCRATS ARE NOT THROWN OUT IN NOV. THE UNEMPLOYMENT RATE WILL HIT 22% WITHOUT QUESTION---THE RANK INCOMPETENT OBAMA AND HIS REGIME IS DESTROYING THE ECONOMY A STEP AT A TIME--- Reply Rate This Comment (1 RATINGS) Pcfruitycox 1:56PM Jul 16 2010 FINALY THE TRUTH COMES OUT--THE JOBLESS IN THE COUNTRY IS OVER 20 % AND THE COUNTRYS PRIVATE SECTOR CANNOT CREATE JOBS FAST ENOUGH TO EVEN KEEP UP !!!!! THE COUNTRY WOULD HAVE TOO CREATE 125,000 JOBS TO KEEP PACE TO BREAK EVEN WITH THE JOB FORCE ENTERING THE JOB MARKET !!!!! THE GOVERMENTS P.R. PROGRAM IS A FARCE TO KEEP POBLIC OPINION IN CHECK JUST TO THINK THE COUNTRY'S RECOVERING !!!! THEIR HAS BEEN NO ATTEMPT BY THIS GOVERMENT OF DEMOCRATIC AND REPUBLICAN TREASONIST TRASH TO SAVE THIS COUNTRY FROM THE FREE TRADE AGREEMENTS THAT ARE WIPEING THIS NATION DRY OF ITS JOBS !!!! THIS PROBLEM IS LIKE THE OIL LEAK THAT HAS NOT BEEN STOPED !!!! TO MANY IN GOVERMENT ARE GETTING BENIFITS FROM BIG BUSINESS NOT TO DO ANYTHING ABOUT THIS !!!!! THE TREASON CONTINUES AND WILL CONTINUE EVEN AFTER ANY TYPE OF ELECTION IN THIS COUNTRY !!!!!!!! Reply Rate This Comment (1 RATINGS) Govttmule 1:55PM Jul 16 2010 Best be growing you little garden out back, maybe get some chickens. Oil up the shootin iron, learn how to field dress game. Get ya a wood burnin stove and hunker down. This might be the end of the line. Reply Rate This Comment (0 RATINGS) ACaceca 1:52PM Jul 16 2010 muslim, communist, marksist, socialist, no experience, community organizer, private business hater and large government lover for a president? That lying two faced jerk has only one thing going for him. his big mouth. he is no leader. he is a manipulator. That goes for most politicians. I can remember my Father saying even 40 years ago that the only thing that will straighten out this country is a revolution. I can believe that now. obama and his wrecking crew are the worst cancer I have ever seen in my 70 years. I'll bet the filthy muslim unemployment is far less than 22 percent though. Reply Rate This Comment (0 RATINGS) LMC3959 1:49PM Jul 16 2010 The only ones wearing rose coloered glasses are the protected union class government workers. If my county has seen a steady unemployment rate of 15-16 percent for the last two years and most other municipalities are in the same range, the national average must be higher that 9.5 percent. If the stimulus has worked then there should be no need for Obama and Biden to go on a summer stimulus tour to promote the farse they have created. The people would be touting the success of stimulus if it were even remotely true. Reply Rate This Comment (3 RATINGS) LMC3959 1:49PM Jul 16 2010 The only ones wearing rose coloered glasses are the protected union class government workers. If my county has seen a steady unemployment rate of 15-16 percent for the last two years and most other municipalities are in the same range, the national average must be higher that 9.5 percent. If the stimulus has worked then there should be no need for Obama and Biden to go on a summer stimulus tour to promote the farse they have created. The people would be touting the success of stimulus if it were even remotely true. Reply Rate This Comment (2 RATINGS) Govttmule 1:48PM Jul 16 2010 OKAY Insight, obama has really got this country on the right track. LOL LOL. Hope don't buy know groceries, and his idea of change is about as unAmerican it gets. It aint nonsense, its fact. Get ur head outta your @ss. obama is an infant, hasn't a clue what to do to create jobs. Previous administration, ha ha, that excuse is gettin old. Reply Rate This Comment (1 RATINGS) BOBCOUCHMAN 1:45PM Jul 16 2010 would suggest stop the defecit spending because the tax base is nearly gone and revenue is going to drop drastically. the only new jobs are government jobs to run all the new entitlements and regulations that the libs have cereated. Reply Rate This Comment (3 RATINGS) Page 1 of 5 1 2 3 4 5 Next >> GOT SOMETHING TO SAY? YOU'LL BE ASKED TO REGISTER OR SIGN IN BEFORE POSTING A COMMENT. Make a Comment Comment Read Full Article »