11 million unemployed, 21 million out of work

People it’s bad.  And the December 2008 unemployment report was worse.

11.1 million unemployed.  But only if you go by the traditional definition.  Add in the 8 million involuntary part-time workers (who say they’d be working full time if full-time work were available) and the 1.9 million discouraged job-seekers (who say they didn’t look for work in the past month because it looked hopeless), and you get an astonishing 21 million people wanting but not having full-time work.

This measure, sometimes called “underemployment” or “U-6 unemployment,” corresponds to a U-6 unemployment rate of 13.5%. That’s the highest in the short time the Bureau of Labor Statistics (BLS) has been keeping track of that statistic (1994-).

It gets worse.  Back to regular (U-3) unemployment, today’s news articles have said the 2.6 million jobs lost in 2008 were the most in a year since 1945, when the economy shedded 2.8 million jobs.  But but but — most of those 1945 jobs must have been in the active military, as World War II ended that summer and the BLS says civilian employment fell by only 1.1 million that year.  (And, as economic historian Robert Higgs has eloquently pointed out in numerous papers, overall U.S. economic well being was much higher after the war, despite the end of “full employment.”  The returning veterans surely preferred being victorious but temporarily out of work to continued combat.)  So you’d have to go back even farther to find a year with as much U.S. job loss as in 2008.  How far?

Perhaps the severe recession-within-a-depression of 1938 (known to some as the “Roosevelt depression”)?  Actually, no — even then the number of jobs lost (1.3 million) was much less than last year.  It turns out you’d have to go back all the way to 1932, when U.S. employment fell by 3.2 million, or 1931 (2.8 million) to find more job loss.  (These data are from Michael Darby’s February 1976 article in the Journal of Political Economy, which, unlike the official BLS figures, counts New Deal workers the same way that government workers are counted today, i.e., as employed.)

Granted, the U.S. labor force is a lot larger now than in the 1930s, so these comparisons only go so far.  The Dec. 2008 unemployment rate was 7.2%, an increase of 2.3 percentage points from a year earlier.  That’s the worst since 1975, but a long way from the Great Depression.

UPDATE:  McClatchy Newspapers, with perhaps the best news article I’ve seen yet on the subject, adds that the average number of hours worked fell to 33, the lowest in all the time the BLS has been keeping track of that particular series (1964-).

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One Response to “11 million unemployed, 21 million out of work”

  1. Jobless in January « Blogging Through the Wreckage Says:

    […] once again, the standard unemployment rate is only for people actively looking for a job and does not count […]

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