Unemployment Is Much Worse Than You Think — Here’s Why.

“discouraged workers aren’t the only problem with the unemployment rate. In fact, these days the headline unemployment rate isn’t just an undercount, it actually paints an alternate reality that masks the degree to which low- and moderate-income people are hurting. As a result, policymakers believe these Americans are better off than they actually are.

There are two additional problems with the way we count people who are unemployed.

First, there’s no accounting for how many hours a part-time worker is working. By the BLS’ traditional definition, a handyman or private nurse who works for a single afternoon each week is counted in the headline national unemployment figure as “employed,” even if they want more work but can’t find it. Our unemployment figures make it look like the person working a handful of hours because that’s the only work they can get is just as “employed” as a full-time CEO. In practice, this means that the unemployment rate actively obscures how many workers are living in poverty in part not because they don’t have a job, but because they can’t get enough hours.

Second, the data doesn’t indicate whether the job a worker is doing pays enough to keep them out of poverty. The assumption implicit in the data is that if you’re “employed,” all should be well, but as the growing movement toward raising the minimum wage attests, it’s increasingly clear that many American workers are employed, often full-time, but still living in poverty.” 

“even when the economy was purportedly at its peak before the pandemic, approximately a quarter of Americans looking for full-time work at a livable wage couldn’t find it. And then at the nation’s worst moment in nearly a century, that number jumped, showing that 32.4 percent of the workforce was out of luck.”

“The bottom line for too many Americans and for minorities in particular, is that for a long, long time, the American economy has not been performing as well as the headline unemployment rate suggests. And while that may be news to those living in comfortable neighborhoods and suburbs, it will not surprise those living in more downtrodden corners of many cities, let alone those who are living in places like the largely forgotten city where I grew up, York, Pa. Over the last several decades, as businesses including York Dental or York Air Conditioner have either closed facilities or scaled back, middle-class prosperity has become more of an impossible dream than an American Dream.

Washington, D.C., has failed to respond appropriately because the headline unemployment figures, particularly in good times, have given some policymakers of both parties license to embrace a narrative that in the absence of a crisis like the one we’re enduring today, our economic approach works fairly well.

We need an economic agenda born from the realization that the true unemployment picture is much worse than policymakers realize. A quarter of the workforce, including a disproportionate share of minority communities, can’t land a full-time job with a living wage even when the overall economy appears to be healthy. The window through which we view the economy matters. We’ve been using a broken measuring stick to keep track of our success.” 

https://www.politico.com/news/agenda/2021/01/25/unemployment-worse-than-you-think-462218

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