EXPLANATION OF GOVT'S PHONEY EMPL0YMENT FIGURES

FROM THE WASHINGTON NOTE

By Steven Clemons

EXCERPTS FROM ARTICLE ON LEO HINDERY JR.

TO GET TO THE PHONEY EMPLOYMENT FIGURE NUMBERS YOU CAN SKIP TO THE 

HIGHLY HIGHLIGHTED CONTENT BELOW.

Leo Hindery, Jr. is one of those big personalities in real life that we see characters trying to play in the movies.  He sees himself as a larger than life change agent, working to rewire America’s social contract to be more fair to American workers. A former CEO of cable firm TCI, then AT&T Broadband, Global Crossing, and the Yankee Entertainment Sports Network, Hindery helped lead firms to rationalize their assets, streamline staffing, and pump up productivity. From a CEO perspective, he saw businesses offshore their production and service lines rather than re-invest in workers in the United States.

Believing that financial institutions were being deregulated even as the labor market was stuck in 1930s-era legal structures, Hindery believed that the American government, U.S. business leaders, and the markets were on track to wreck the foundations on which middle class America was based.

He believed that workers would see their jobs continually off-shored, and their pensions and savings ripped off in a system increasingly designed to work at odds with them. In the end, Hindery surmised that this would forfeit America’s future to other rising powers like China, which was making smart investments in manufacturing, infrastructure, and in workers.

ONE OF THE KEY POINTS:  PHONEY EMPLOYMENT FIGURES

One of the ways the Obama administration, as well as many administrations before it, cheat American workers is through an institutionalized duplicity about worker employment figures.

For decades, the only employment numbers that anyone would discuss were those issued by the Bureau of Labor Statistics (BLS). For the latest month, June 2013, the BLS reported a 7.6% unemployment rate, noting that U.S. employers had added 195,000 non-farm jobs and that there were 11.8 million unemployed persons in the United States.

But in the last few years, Hindery’s dogged efforts to get pundits, reporters, and policy practitioners to abandon discussion of “official unemployment” rates to “real unemployment” figures has percolated in the media more and more. The latest example was New York real estate baron and US News & World Report owner Mortimer Zuckerman’s extensive discussion of the real unemployment challenges facing America in the Wall Street Journal last week, titled “A Jobless Recovery is a Phony Recovery.”

In a monthly email that Hindery personally sends to leading members of Congress, labor leaders, a large flock of journalists ranging from Fox News to The Atlantic, business leaders, and others, he dissects the BLS statistics and notes what is missing.

Hindery says up front that the BLS only notes those specifically looking for work. That may make sense to some — until one learns who is left out.

According to the Hindery report, those who are left under the rug of America’s unemployment mess are a number of discouraged workers who have given up looking for work and partially-employed workers. He notes those that BLS does not include are:

a. Marginally attached workers, of whom there are now 2.6 million. These are workers who, “while wanting and available for jobs, have not searched for work in the past four weeks but have searched for work in the past twelve months.” Currently included among them are 1.0 million “discouraged workers” who did not look for work specifically because “they believe there are no jobs available or none for which they would qualify.”

b. Part-time-of-necessity workers, of whom there are now 8.2 million, are workers unable to find full-time jobs or who’ve had their hours cut back.  These workers are often referred to as the “underemployed”.
The zinger from the Hindery unemployment assessment is that:
In June 2013, the number of Real Unemployed Persons increased by 757,000 to 22.6 million and the Real Unemployment Rate increased by 0.4% to 14.3%, reflecting large increases in the number of “marginally attached” and “part-time-of-necessity” workers.

In other words, BLS reports that official unemployment stayed flat at 7.6% while Hindery’s more extensive figures show that real unemployment increased by 0.4% to 14.3%.

As America struggles with not only those entering the workforce now but also those trying to stay in it and get back into it, it’s important to realize that the scale of need is about 22.6 million jobs. That should be the policy target — not some scaled down version that is more politically palatable.

For those interested, here is the Hindery report on real unemployment for June 2013.

If anyone would like to receive this report on a monthly basis, email me at “sclemons @ theatlantic.com” or send a note to me on Twitter at @SCClemons, and I will forward my monthly report to those interested.

(photo credit above: Reuters)

– Steve Clemons is editor at large of The Atlantic and also serves as editor at large of Quartz, a new digitally native news outlet for the new global economy. Clemons also publishes The Washington Note and is founder of and senior fellow at the New America Foundation’s American Strategy Program.  This article first appeared at The Atlantic.