Fred Lange had me doing some background research late into last night after he read an article on the real number being 22.4 percent. As we dug deeper and deeper we found more facts and information, and with the help and input of Warren Mosler, I believe that they are correct. You can not find much better comments to trust that those of Fred and Warren. I have learned this over 30 years of receiving them.
I am including the emails in this post below.
See Fred comments. 3.5 million left workforce. Not calculated. Incorrect info from Obama administration. Then see Warrens.
Between Fred and Warren comments and agreeing I know this is accurate below. They are amazing at what they do. Best in the business.
Begin forwarded message:
From: Warren Mosler
Date: October 12, 2010 8:31:52 EDT
To: “R.A. Kurlander”
Subject: Re: Jobs
plenty high for a full payroll tax holiday
been that high for a while, not getting worse.
good for stocks- cheap labor for a long time
budget deficit keeping demand high enough for 1-3% gdp growth until private credit demand kicks in
also good for stocks.
On Tue, Oct 12, 2010 at 8:30 AM, R.A. Kurlander
So Fred is saying the number can be even higher. Like you thought last night.
Begin forwarded message:
From: “f lange”
Date: October 12, 2010 6:53:57 EDT
To: “‘Bob Kurlander'”
The key here is that 3.5 million or about 25% have left the work force. Add that % on to 17.1%
From: Bob Kurlander [mailto:email@example.com]
Sent: Monday, October 11, 2010 10:15 PM
To: Lange; FWLANGE
Saturday, October 9, 2010 5:29 PM EDT
At least one-in-six in U.S. unemployed or underemployed
By Palash R. Ghosh
While the official jobless rate in the U.S. held steady at 9.6 percent last month, a closer examination underneath the surface reveals a far darker picture -one in six American workers are currently either unemployed or underemployed.
Heidi Shierholz, an economist at the Economic Policy Institute, a Washington D.C.-based think-tank, explains that the â€œunderemployment rate,â€ also knows as the “U-6” measure of labor under-utilization, is a more comprehensive measure of labor market slack than the unemployment rate because it includes not just the officially unemployed, but also jobless workers who have given up looking for work and people who want full-time jobs but have had to settle for part-time work.
The U-6 index climbed by 0.4 percentage points to 17.1 percent in September, which means that more than one in six U.S. workers are either unemployed or underemployed.
Shierholz indicates that the number of involuntary part-time workers increased by 612,000, while the number of â€œmarginally attachedâ€ workers (jobless workers who have given up looking for work), increased by 139,000. In total, there were a total of 26.8 million workers who were either unemployed or underemployed in September.
The Bureau of Labor Statistics (BLS) jobs report for September revealed that 64,000 private-sector jobs were created in September, while budget-strapped state and local governments lost 83,000 jobs (including 58,000 jobs eliminated in education). The total number of payroll jobs decreased 95,000 in the month.
“With state and local government budget problems continuing, losses in public employment will continue,” Shierholz warned.
Since its peak in September 2008, state and local governments have shed a total of 410,000 jobs (57,000 state, 353,000 local).
Moreover, the labor force increased by 48,000 in September, keeping the labor force participation rate unchanged at 64.7 percent.
“The labor force participation rate is still far below its pre-recession level of 66.0 percent in December 2007, so the pool of ‘missing workers,’ that is, workers who dropped out of — or didnâ€™t enter — the labor force during the downturn, remains large,” Shierholz explained.
She indicates that the labor force should have increased by around 3.8 million workers from December 2007 to September 2010 given working-age population growth over this period, but instead it grew by 289,000.
“This means that the pool of missing workers now numbers around 3.5 million,” she noted. “None of these workers are currently reflected in the official unemployment count, but as they enter or re-enter the labor force in search of work, this will contribute to keeping the unemployment rate high.”
Interestingly, the percentage of unemployed workers who have been unemployed for over six months dropped from 42 percent to 41.7 percent in September.
“This improvement likely reflects workers dropping out of the labor force after exhausting unemployment insurance benefits,” Shierholz cautioned.
“Despite this, the long-term unemployed share remains the seventh-highest on record, and there are still 6.1 million workers who have been unemployed for longer than six months.”
“We’re not losing jobs, but we’re not gaining at a high enough rate to make a dent in the employment problem either,” said Stephen Bronars, senior economist with Welch Consulting.
The numbers are even worse for the young and for black Americans.
In September, unemployment amounted to 17.9 percent among workers age 16-24, 6.1 percentage points higher than at the start of the recession in December 2007.
Among blacks, the jobless rate was 16.1 percent (7.1 percentage points above the figure at the beginning of the recession.)
Shierholz estimates that while more than 8-million jobs have vanished since the start of the recession, this figure actually understates the total jobs shortfall due to the growing population.
“Simply to keep up with the growth in the working-age population, the labor market should have added around 3.4 million jobs since December 2007,” she said. “This means the labor market is now roughly 11.5 million jobs below the level needed to restore the pre-recession unemployment rate (5.0 percent in December 2007). To get down to the pre-recession unemployment rate within five years, the labor market would have to add around 300,000 jobs every month for that entire period. In September, excluding changes in temporary Census hiring, the labor market lost 18,000.”