2009-12-01: Thank you all for visiting and commenting on this post. Some of you touched on the issues that are behind these disturbing unemployment numbers and you are all correct. We have a government more inclined to bailout crooked corporations than helping the citizenry with job creation and debt management. The taxpayer, through the Federal Reserve, loans banks money at 0% and those same banks jack up the interest rates to 29% on many credit cards. Banksters and fraudsters continue to collect outrageous bonuses – funded by the taxpayer – while jobs are shipped offshore and factories close forever.

Regarding the self-employed, I spoke to a BLS representative and they indicate that self-employed are included in the unemployment rate. You can look at the questioning at How the Government Measures Unemployment. That’s not to say that there are gaps that aren’t covered, but the self-employed are counted in the mix. The self-employed may do a lot of work and not make any money, so they are working and unemployed and sometimes relying on payday loans.” And while the self-employed aren’t eligible for unemployment benefits, they pay the full-shot (around 15%) for Social Security (FICA)taxes, instead of the 7.5% that employed workers pay. There should be an insurance package that the self-employed can purchase that would allow them to collect some sort of unemployment benefit.

I was speaking to a friend of mine that is more to the right on most issues than I am and he asked me what I would do if I could change the way government operates. I told him that I would curtail corporate lobbying by any company that receives government contracts. There needs to be a separation between business and our elected representatives. The money that flows between them is corrupting both sides and it’s a revolving door between business and government. How many ex Goldman clowns have bounced between Goldman and the Treasury? Could that be why corrupt banks like Goldman were bailed out with trillions of dollars worth of guarantees and backstops? How did they convince Treasury to belly-up at par the billions that AIG owed them? They really didn’t have to convince anyone, since Goldman = Treasury!

While there are certainly a few honest, sincere and citizen focused elected representatives, they are in the minority. And, unfortunately, with the system we have now, when you throw out the bums, you only have other bums take their place. Without a valid third or even fourth party, there are few reasons for the two parties that we currently have to do anything differently, such as act in your best interest.

The “Real” unemployment rate in the US is now 22%

The media and government officials often tout the unemployment rate using the official, or U3 rate, which stands at 10.2% for October. While 10.2% unemployment is certainly bad enough – it’s the highest rate nationally excluding 1983s 10.8% – it pales when compared to the U6 unemployment rate. First let’s discuss the differences between U3 and U6 measures.

According to the Bureau of Labor Statistics (BLS) the U3 measure is described as “total unemployed, as a percent of the civilian labor force (official unemployment rate).” Now let’s take a look at the BLS U6 measure: Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.

When including marginally attached workers and those forced to work part-time instead of full-time we have a national unemployment rate of 17.5%, which is nearly 70% higher than the U3 rate of 10.2%. That’s a dramatic increase from the normally quoted U3 unemployment rate, but even U6 fails to provide the actual percentage of people who are, or may be considered unemployed.

John Williams discusses alternative unemployment data sets at his Shadow Government Statistics site. Their service, in part, “exposes and analyzes flaws in current U.S. government economic data and reporting.” Once those flaws are included in the unemployment calculation – called the SGS Alternate – the unemployment rate reaches 22%. Shadow Government Statistics gives the following reason for SGS Alternate measure: “The SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated “discouraged workers” defined away during the Clinton Administration added to the existing BLS estimates of level U-6 unemployment.”

To clarify why the discrepancy between U6 and the SGS Alternate rate of 22%, I contacted the BLS and received the following answer to my question about the change in discouraged worker designation during the Clinton Administration:

“(P)rior to 1994 persons were not asked whether they had searched for work recently. If they gave one of the five “discouraged worker” reasons for not looking for work in the past 4 weeks, they were assumed to have “given up” the search for work, although they weren’t asked when they had last looked. As a result of the greater specificity introduced in 1994, the number of discouraged workers was cut approximately in half, from about 1.1 million in 1993 to 500,000 in 1994.”

About 600,000 people were removed from the unemployment calculations in 1994, so if you merely add those 600,000 to the current U6 number, the rate of unemployment would be much higher than 17.5% and would more accurately be reflected in the SGS Alternate unemployment rate of 22%.

To view the SGS Alternate graph, visit:  Inflation, Money Supply, GDP, Unemployment and the Dollar – Alternate Data Series

Chart of U.S. Unemployment

The BLS now offers the U6 measure of unemployment for states. An example is New York’s U6 rate averages 13.4% for the period fourth quarter of 2008 through third quarter of 2009 at:  Alternative measures of labor underutilization by state. So making the simple assumption that the SGS Alternate data is, on a national level, about 4.5% higher than U6, the unemployment rate in New York is closer to 17.9%, and that’s being conservative since the current unemployment rate is higher than the average presented at the BLS. Below is the latest unemployment measurements by state from the BLS:


When nearly 1 in 5 eligible New York workers are either unemployed or underemployed, we are made aware of the brutal state of employment. Maybe it’s time to spend more money on job creation, instead of pumping billions of dollars into the coffers of banking bonus babies and corrupt banks and institutions that were made too big to fail by two presidential administrations more concerned about campaign money than taxpayer needs.

A sliver of good news, according to John Williams, is that during the Great Depression the SGS Alternate measure of unemployment would likely be near 34%. Let’s hope our elected “representatives” don’t aim for those lofty unemployment levels.

If you would like to follow my Examiner.com posts, they are located at Rochester Unemployment Examiner’s Articles.

“When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it.” – Frederic Bastiat (1801-1850)

Reader, Stanford, was kind enough to send a link to a YouTube video that may better explain through humor what I have mentioned above. It’s worth a view:


One way to get your mind off of news about layoffs, pay cuts and benefit reductions is to take a vacation, which can improve your mental outlook and recharge your system. One place you may want to visit to learn more about vacation rental homes is VacationRental.org. They offer a wide variety of vacation rentals that are aimed at all budgets. These rentals are fully furnished and consist of condos, villas, houses and apartments. For those looking at the warm breezes of Florida, take a look at their Florida Vacation Rentals. If snow and skiing is more your idea of a vacation, the Colorado Vacation Rentals might be more to your liking. Enjoy!

19 Comments to “The “Real” unemployment rate in the US is now 22%”

  1. Michael says:

    Welcome back Mike. I used to enjoy reading your stuff. Then you stopped. By luck, I checked back and you’ve decided to restart your blog. You might find it easier without having to do all the detailed postings on specific layoffs. Besides, layoffs seem to be slowing down. We’re noticing it on our site (Twilightpad). Jan 2009 was pretty devastating. Now? We see a few here and there, but nothing like Jan.

    Anyways, as the economy picks up, we’ll both need to diversify a bit more. We never intended to focus on layoffs, but the low hanging fruit was hard to ignore.


  2. layofflist says:

    Thanks, Michael, it’s good to be back in a simpler capacity. I’ll drop you an email.


  3. Michael says:

    I got your email and sent you one back. Mine was more like a novel. 🙂

  4. Randy says:

    Folks, during the Great Depression, the USA was the world’s greatest industrial dynamo. Just think about the decades which preceded it, from Bell to Edison, Carnegie, and Ford. Americans were making things for the world markets… the industrial revolution from 1870 to 1920. Today, we’re a debtor society with mostly IOUs to Asian govts and Sovereign Funds. The important stuff is made from Korea to Singapore, not here. This current economic malaise could be for the long haul, as jobs and critical tasks continue to get offshored and even American universities start to create campuses abroad.

  5. martin says:

    It is so depressing. The political system is broken. For the life of me why do the citizens just not “throw the bums out”. Both parties. After all Obama hired back all the deregulators into his cabinet. So where is the change? These folks got bailed out and where was Geither as head of the New York Fed prior to the collapse of Lehman. His job like Govenor Spitzer was to protect uphold standards. Anyway, from Clinton who repealed Glass-Stegal to Bush and now Obama we as a nation have seen millions of jobs shipped off-shore. Time for us to give up this free trade where China has child slaves competing with our labor force. Politicians don’t care..they all have federally funded pensions and health care plans they don’t allow for us. Throw em all out. There’s not a dimes bit of difference between a Democrat or a Republican. They are all out for themselves.

  6. Dave says:

    Why do I never hear mention of the self-employed who are not working? The last 20 years we kept hearing about so many people becoming self-employed, so why don’t we hear about them now with respect to not getting work? If they were counted, the rate may be closer to 30%.

  7. Uncle Sam says:

    Thank you, Dave.

    Count me in on that one. Ask how many contractors have worked in the past year in California. Hell, up here in El Dorado, our BUILDER’s EXCHANGE closed!!

    There isn’t even work to BID.

    To hell with construction, I folded up and am back in school!

    Good Luck and May Your Dow Never Jones.

  8. lagging indicator says:

    what did u expect? the fat cat wall street money brokers and the profit hungry banks were having serious cash flow problems and called in their markers. republicans oblighed to the tune of a trillion bucks. joe blow left to fend for themselves. happy holidays from the peoples republic of walmart

  9. […] Online Store var addthis_pub=”otero1″; The Real Unemployment Rate in the U.S. is Now 22% Via: Layoff List: […]

  10. […] This post was mentioned on Twitter by Monica M. Zylinski, ynoiseux. ynoiseux said: RT @GenBub The “real” unemployment rate in the US is now 22% – http://shar.es/aEj5e […]

  11. steve says:

    it would be more just to disolve the house and senate as they stand, and instead make 50+ phonecalls per district to random phone numbers to vote/write bills by survey…and by the people.

  12. Ed says:

    What we need is a new type of representative government. Something that would devolve representation from the bottom up instead of the current (money-influenced) top-down system, where ability to raise money and filtration by the mainstream news media determine the “seriousness” of the candidates for office.

    My idea is a lot like Cuban-style “democracy” but actually democratic in nature: block committees -> neighborhood and town meetings -> town, city and county councils -> state legislatures -> upper and lower houses of parliament -> prime minister and president.

  13. […] The Layoff List says: The “Real” unemployment rate in the US is now 22% […]

  14. Stanford says:

    Have you seen the Mint video on unemployment rates?


  15. […] BLS offers us another measure, U6, which takes recently discouraged workers into account. The Layoff List describes the BLS U6 measure […]

  16. barbara says:

    Boycott Walmart nationwide which will immediately boost and encourage small businesses and institute a 4-year draft state and national political system.

  17. Tutone Lyles Naranjo says:

    I have been laid off almost two years and there are no jobs. I think employers are taking the creme de la creme for all jobs including simple office jobs. I attend classes at night to upgrade my skills. My benefits just stopped until an agreement can be reached in Congress. No one seems to be addressing how we need to create jobs, and new jobs in particular, create a system whereby people could sign in and would be given work where it’s needed, like a staffing agency does, but… this would be more supported on all levels of government to put people to work, go simply where they are needed and collect a decent paycheck at the end of the week or month. Everyone could be put to work that way. Don’t divide it up by type of work. Just let people show up and send them where they can do some kind of work. This is a time in our history that calls for innovation, courage, risk certainly, and letting go of the status quo and quick fixes to satiate long-term problems. Yes, certain extend unemployment benefits until this job thing gets going. CREATE MORE JOBS FOR EVERYONE!

  18. Jobs says:

    I just did a bit of “funny math” with the unemployment rate comparisons between the Great Depression and now.

    Now, consider the fact that the country only had 130 million people during the Great Depression while it has 310 million peple today.

    33% of 130 million is around 44 million unemployed workers. However, 23% of 310 million is 71 million unemployed workers.

    Now I’m just going to stick with the U6 rates.

    25% of 130 million is around 32 million unemployed workers. However, 17% of 310 million is 53 million unemployed workers.

    So basically, strictly by measuring the unemployment rate this recession is far worse than the Great Depression. Thus it’s really not much of a silver of good as the author suggests after all.

    Of course, the only real difference between the Great Deprssion & now is our country didn’t have the more advance infrastructure it does now which is helping to subdue some o fht etrue severity of this recession.

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