Saturday, October 2, 2010

The Real U

Let’s talk about the “U”. The “U” as in unemployment. The Bureau of Labor Statistics actually calculates SIX different U’s. The published unemployment rate is U3 and the August 2010 number was 9.6%. Pre and post 9/11 lows were 3.9% and 4.4%. Then there is U6, the super-sized measurement of U.S. unemployment (It’s also an age classification for youth soccer, but I digress). In addition to all those folks in the regular unemployment rate, U6 also counts "marginally attached workers" and those working part-time for economic reasons. Some of these part-time workers counted as employed by U3 could be working as little as an hour a week. And the "marginally attached workers" include those who have gotten discouraged and stopped looking, but still want to work. The August 2010 U6 rate was 16.7%. Pre and post 9/11 lows were 6.8% and 8.0%.

There is yet another measure of unemployment published by John Williams, an economist based in Oakland California. He does his own research and publishes a newsletter called Shadow Government Statistics (SGS). His SGS unemployment rate is similar to U6 but includes more of the “marginally attached”. It’s usually 4 or 5 points higher than U6, so that puts his U over 20%.

So what it the real U? That sort of depends on “U”. If you are among the unemployed, the U means “U are not employed” and that’s the only statistic that matters. But if you are not Unemployed it is likely that you are at least 25 years old, married, white, female, hold a management or professional position and have a college degree. The statistics are interesting and compelling.

Unemployment rates by categories:

25 yrs and up 8.3%
20-24 14.9%
16-19 26.3%

Married: 6.4%
Single: 13.6%

White 8.7%
Afro-Am 14.9%
Latino 12.0%

Men 10.6%
Women 8.6%

Job Category:
Management/Professional 5.1%
Services 10.6%
Office/Admin/Sales 9.1%
Blue Collar 12.1%

Less than High School 14.0%
High School 10.3%
Some College 8.7%
Bachelors Degree or above 4.6%

So what should we do about the “U”? My thoughts, next week.

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