Unemployment Figures:
Damn Lies

Oct 6, 2008

As bad as the unemployment news is, the truth is much worse. For more than 40 years, the government has been “massaging” its statistics. In plain language, the federal government–under Democratic administration and Republican administration–has found numerous ways to lie in order to disappear the unemployed from government statistics.

In 1961, in the midst of a severe downturn in the economy, the Kennedy administration decreed that unemployed workers who had not looked for work in the previous week would no longer be counted as unemployed. Labeling them as “discouraged workers,” the government left them out of the unemployment report.

For decades, the government has not counted disabled people as unemployed even when they are able to work and want to work.

In 1983, after a stretch of bad years, the Reagan administration decided to count U.S. military forces as employed. Putting them in the statistics made it seem that more people were employed.

The Clinton administration in the late 1990s dropped from its economic sampling one-sixth of the households from which unemployment data was collected. It just so happened that most of these households were in big cities, where poverty and unemployment were worse. It also eliminated most of the long-term unemployed from the records.

Finally, those who want a full-time job, but can find only a few hours of work a week, are counted as employed. All of these things have produced an official unemployment figure that is increasingly out of touch with reality.

If government statistics on unemployment were calculated the way they were in 1960, the real unemployment rate would be about 15% today, not 6%. That won’t surprise workers who know from experience how many people can’t find jobs.