What is the real Unemployment Rate in the US

[metta]

What do you think the real unemployment rate is in the US? The rate that the government gives, which is something around 5.5%, does not include independent contractors, self employed people, or people that have been out of work for more that a certain period of time (I think a few months).

My friend that works for a company that helps people get jobs estimates that the real rate is around 12%, which is way more than most people realize.

What do you think the real rate of unemployment in the US is?

 

[Sunshine]

I think it's way too muhhfuggin' high than it should be. I'm almost not above prostitutution at this point... I have a speeding ticket to pay, doctor bills, AND my breaks just blew up on my car.

e_e; figh dollah, figh dolla.

Oh yeah, and the post man just told me it's 2% so I laughed at him.

 

[G-Lexington]

The unemployment rate isn't accurate, that's true. But it's like a scale that always ways ten pounds too light. It may not give the right figure, but it gives a decent picture as to which direction things are going, and how fast.

Lex

 

[drhladnjak]

The problem is that it's difficult to come up with a good definition of unemployment.

The official figures count people who don't currently have a job and say they actively looked for one that month. What criteria do you use determine if somebody self-employed is unemployed? Technically, they always have a job working for themselves.

Independent contractors are often looking for work in the form of the next contract since they typically work on jobs with a fixed time frame. Just because they're in between jobs and not working at a specific moment, doesn't say anything about the health of the labor market. What criteria do you use to determine if they're unemployed--if it's been more than a certain number of months since their last contract? If they say they're unemployed in that they just can't find a new contract?

People who don't work but aren't looking for a job are not counted either. The woman who quit her job to care for a new child, the guy who just retired, the student taking a few months to travel around after graduating college, the high school student on break who's watching TV in his parents house all day instead of looking for a summer job and the steel worker who has simply given up on ever finding a job all fall into this category. You can't really count people who don't want to work in the unemployment figures even if some of them might be persuaded to work again under the right circumstances.

Those who are underemployed (i.e., they work part-time but would like to work full-time) are not counted either. Technically, they're not unemployed since they have jobs. Do you just instead roll underemployment and unemployment numbers together into one number? It seems like it would further muddle the meaning of the number.

 

[maxpowr9]

NAIRU is the answer to this question. The non-accelerating inflation rate of unemplyoment.

Quite a mouthful isnt it? This is how the US government judges employment. There a fallacy to this rate (like anything else). Government will often raise (or lower) inflation to offset the rate of unemployment given ceteris parabus to reach an equilibrium between inflation and unemployment. However, this is only in the short run (like everything else in economics).

The government considers full employment at 4%. That is their NAIRU.

Obviously as drhladnjak pointed out that not all groups are counted in the unemployment. Unemployed means jobless but actively seeking work. Nonemployed means they are jobless but not seeking work (after 1 year). It is estimated that there are 5.5% in the US of legal citizens capable of working (18-65) that are nonemployed.

Trying to calculate a rate of unemployment is damn near impossible.

If I had to take a guess of the number of people that could potentially be counted as part of the workforce and are not employed, it would be about 10.5%.

 

[Orlandude]

Lex is right. The government unemployment figures are never a true picture of unemployment and were never meant to be. The percentages released are more the "trend", not actual figures. They only take into account the number of NEW filings for benefits and don't take into account the many numbers of those whose benefits have run out.

drhladnjak also rightly points out that there are MANY other factors and types of people that are never counted. (the self-employed, part-timers, contractors not working, etc...) The government could never track all that. They can only track people who file for benefits and you can only collect benefits if your employer has paid into them for you. However, some part-timers CAN collect if they lose their job and if the employer has paid into it. In my state they can. Obviously self-employed people and independent contractors could not collect anything. As I understand it, an individual cannot pay into it, only companies with so many employees.

I think the TRUE unemployment figure is just about DOUBLE whatever the government says it is.

 

[Apollo]

What do you think the real unemployment rate is in the US? The rate that the government gives, which is something around 5.5%, does not include independent contractors, self employed people, or people that have been out of work for more that a certain period of time (I think a few months).

My friend that works for a company that helps people get jobs estimates that the real rate is around 12%, which is way more than most people realize.

What do you think the real rate of unemployment in the US is?

It usually sits around 4.5%. Or at least that is the number I remember from MicroEconomics this year. I know it's in the 4% range

Oops, I just gave you the natural unemployment rate. The real one idk.

 

[Apollo]

Unemployment doesn't count people who are not looking for work and discouraged workers.

Unemployment is measured by people looking for work. They also take into account cyclical unemployment (seasonal work) and other types of unemployment. The only other one I remember is structural unemployment which I believe is change in technology which means the job a person has been doing is no longer necessary.

I am sure there is an economist of this board who can or has already broken it down.

 

[The Warmth]

Are we to include illegal aliens? or not.

I'd think not, as they are not citizens of this country, obviously. Nor are they immigrating in the correct fashion.

 

[Apollo]

I'd think not, as they are not citizens of this country, obviously. Nor are they immigrating in the correct fashion.

They technically aren't suppose to be counted in the GDP either because it counts as an illegal action which isn't counted in the GDP.

Illegal aliens working without proper documentation and other stuff is illegal and shouldn't be counted. I wonder how hard our GDP would suffer from that?

America currently has the largest GDP in the world, beating the next country in line by several TRILLIONS of dollars.

 

[Xenrai]

I've heard estimates by professionals from 10-20%

Who knows