Archive for November 2009
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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%.
Read the rest of the post at http://www.layofflist.org/?p=5903&ref=patrick.net
Frederic Mishkin is a former board member, having served from 2006-2008. His career at the Fed stretches back to 1977 and he currently holds two positions: one as a member of the Center for Latin American Economics at the Federal Reserve Bank of Dallas, where he’s been since 1996; and another as an academic consultant to the Federal Reserve Bank of New York, where he’s been since 1997.
Anil K. Kashyap is currently a consultant with the Federal Reserve Bank of Chicago, a position he’s held since 1991. He’s also on the economic advisory panel of the New York branch and was a consultant there in 2003. He was a visiting scholar at the division of monetary affairs at the Board of Governors of in1994, 2001 and 2005 and at the division of international finance in 1997.
Pete Klenow was a visiting scholar at the Federal Reserve Bank of Minneapolis from 1994-1999, 2003-2004, 2006 and again this year. From 2000-2003 he was also a senior economist at that branch. He’s currently a visiting scholar at the Federal Reserve Bank of San Francisco, a position he’s held since 2005. He was a visiting scholar at the Federal Reserve Bank of Kansas City from 2004-2006.
Ricardo J. Caballero was a visiting scholar at Federal Reserve Bank of Boston from 2004-2005 and a visiting scholar at the Federal Reserve Board on multiple occasions.
Robert Hall was a research assistant at the Board of Governors of the Federal Reserve System from 1982-1984 and an economist there from 1988-1991.
Thomas Sargent was an adviser to the Federal Reserve Bank of Minneapolis from 1981 to 1987 and continues to write frequently for Fed-sponsored journals.
Micheal Woodford is currently on the Monetary Policy Advisory Committee of Federal Reserve Bank of New York, a position he’s held since 2004. He’s also listed as a consultant to the research department there dating back to 2005. In the past, he’s been a visiting scholar at the Board of Governors and various regional branches in 1987, 1993-1998 and 2000-present, often at multiple banks in the same year.
That list of economists is anything but unbiased. The conflict of interest is clear, loud, and undeniable.
In the Battle of the Health Bills, the Senate wins out, bulk-wise – weighing in at 2,074 pages.
The House health reform bill was a mere 1,990 pages when introduced.
That means the Senate bill — like the one in the House — runs more pages than War and Peace, and has nearly five times as many words as the Torah.
The table of contents alone is 14 pages.
“Read the bill!” was a rallying cry of some health reform opponents over the summer. And if Sen. Tom Coburn (R-Okla.) gets his way, senators will get a chance to hear every word of it. He’s threatening to the read the legislation from start to finish, which by some estimates could take as long as 48 hours.