Americans Feel 15.6% Unemployment as Underemployment Surges

On how the government's "official" Labor Department unemployment statistic of "8.5%" is a bogus cooked figure, and the real unemployment rate is much higher...

By Matthew Benjamin

April 6 (Bloomberg) -- Joseph Ramelo gave up searching for work in January to return to school, two months after he was laid off as a San Francisco election clerk. Antonio Poe is struggling to get by doing part-time landscaping in Greensboro, North Carolina, after losing his job as an electrician.

While such workers are feeling real pain from the recession that began in December 2007, they’re not represented in the 8.5 percent unemployment rate the Labor Department reported last week. They are part of a broader group that includes those who want a job but have stopped looking for work and those who want full-time positions but have to settle for part-time employment.

A measure of underemployment that counts those people has almost doubled over the past two years, to 15.6 percent, providing a more complete gauge of the labor market’s deterioration. Along with an historic drop in the percentage of the population who are working, and record numbers of long-term unemployed, the figures point to a permanent shift in employment patterns, said former U.S. Labor Secretary Robert Reich.

“We’re seeing many more people who are losing their connectedness to the labor force,” said Reich, who served in President Bill Clinton’s Cabinet and is now an economist at the University of California at Berkeley. “There is a profound weakening of ties to the labor market among a large portion of our working-age population.”

Job Losses

U.S. employers cut 663,000 jobs in March, bringing losses since the slump began in December 2007 to about 5.1 million, the worst in the postwar era, according to the Labor Department. Unemployment exceeds 10 percent in seven states. Michigan’s jobless rate is 12 percent, South Carolina’s is 11 percent and California’s is 10.5 percent.

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