While growing up on US military bases, one of the perennial radio personalities that the Department of Defense would transmit to us wayward DoD dependents was Paul Harvey and his show, The Rest of the Story. I liked the set up of the program — always showing his captive audience that there was more to things than what the government or some corporation was spinning.
America’s unemployment statistics have their own Paul Harvey — but his name is Leo Hindery.
Every month, media business executive and former Obama for President finance committee member Leo Hindery puts out a very detailed memo breaking out the national unemployment data — showing what is real and what is not regarding the Bureau of Labor Statistics’ monthly release of jobs data.
One of the chief data abuses that Hindery has focused an enormous, hot, raging spotlight on is the giant gap between official unemployment (now pegged at 8.8% of the population) and “real unemployment” which Hindery documents at 17.7% of the population.
Hindery points out that the US economy is 20.2 million jobs short of what it needs for full employment.
In his figures, Hindery accounts for “discouraged workers” who just stop trying to get new jobs and those who are “under-employed”, i.e., partially but not completely employed.
I’ve read these memos every month and try to post them when I can. Hindery has changed the national discourse with this framing of unemployment — and more and more national economic and political commentators are using his term of real unemployment. Even today when I was listening to the Diane Rehm Show on National Public Radio, one of the commentators made the point that the government data wasn’t only a function of workers who were discouraged falling off the radar screen but actually there was some real hiring and adding of people to payrolls.
This is the Leo Hindery effect, and I applaud him and his team for working so hard to distribute these figures every month.
So here is the Leo Hindery Report on US Real Unemployment for March 2011:
The Bureau of Labor Statistics (BLS), using its Current Population Survey of non-farm jobs, announced this morning that in March 2011 “U.S. employers increased non-farm payrolls by 216,000 jobs, including 230,000 private sector jobs added in the month versus an adjusted upward 240,000 increase in February. The ‘official’ unemployment rate edged down to 8.8% from 8.9%.”
The consensus expectation was for 195,000 new private sector jobs, versus the 230,000 that were announced. The BLS also identified 13.5 million unemployed workers.
The monthly BLS announcement regarding unemployment, however, as we note each month:
1. Uses only a “survey of households” rather than much more accurate payroll data;
2. Excludes changes in employment among the nation’s 11.0 million farm and self-employed workers; and
3. Most important, does not take into account the 14.7 million workers who are:
i. “part-time-of-necessity” (i.e., underemployed) because their hours have been cut back or they are unable to find a full-time job (8.4 million);
ii. “marginally attached” to the labor force because while wanting a job, they have not searched for one in the past four weeks because of availability, skill or personal reasons (2.4 million); or
iii. “discouraged” and who have removed themselves from the labor force although they “currently want a job” (3.8 million).
Our Summary of U.S. Real Unemployment [attachment 1] makes these three adjustments. It also identifies average weeks unemployed, job openings, and the all-important “Jobs Gap” that needs to be filled in order to be at full employment in real terms. With the three adjustments made, in March: