Wednesday, June 16, 2004

What the Unemployment Rate Misses

REUTERS - Buried inside the official U.S. employment report each month is a little-known figure that gives a much less rosy picture of the labor market than the headlines. The government agency that produces the data also publishes an alternative measure that tries to capture the hidden unemployed, those who are not included in the official unemployment rate for various statistical reasons. That broader measure is dramatically higher, at 9.7 percent in May, compared with the official level of 5.6 percent. That's an extra 5.96 million people, in addition to the 8.2 million "officially" unemployed, who are waiting on the sidelines and may at some point step back into the labor force. . . None of the unemployment measures include the 1.7 percent of the male wage-earning population who are in prison, or another 1.36 million men, according to the Bureau of Justice Statistics. Indeed, the labor force participation rate is at its lowest level since 1988 -- lower even than in the last recession.

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