Over on the home page, I take a look at why Democrats think the economy is currently doing quite well, and why a significant number of independents look at the headlines and think things are going okay as well.
Luckily for the Obama administration, recent economic reports have generated sufficiently unclear results that a casual glance might suggest things are getting better. Few Americans know that, traditionally, the number of new jobs needed each month to keep up with the number of new workers entering the workforce is considered to be 100,000 to 150,000. (Some say a sustained recovery requires something closer to 250,000 jobs created per month.) Obviously, if an economy creates 45,000 jobs, as it did in June, but adds 125,000 new workers, the overall number of people looking for work goes up by 80,000 and the unemployment rate is actually higher, not lower (although the official percentage probably would remain the same, for reasons discussed below).
So some Americans may think that any level of job creation is good news. Saul Alinsky wrote: “The moment one gets into the area of $25 million and above, let alone a billion, the listener is completely out of touch, no longer really interested, because the figures have gone above his experience and almost are meaningless. Millions of Americans do not know how many million dollars make up a billion.”
And few Americans know about the “discouraged worker” factor in the statistics — the factor of the unemployed worker who was looking for work sometime in the past year but has stopped looking for work. The most recent jobs report indicated that there are 844,000 discouraged workers who aren’t counted in the official unemployment rate. The official rate is known as the U-3 figure; adding “marginally attached” workers and then adding “discouraged workers” gives us the U-4 and U-5 figures, respectively. Then there is the question of how to classify those who are working part-time but who want, and cannot find, full-time work. Technically these workers are employed, but they are likely to be struggling financially; there are 8 million Americans in this category; adding these to U-5 brings us to the U-6 figure. Finally, Paul Solman, the business and economics editor for PBS’sNewsHour, believes that the long-term unemployed — those who have stopped looking for a year or more, but say they want a job, a figure reaching about 7 million — should be included, in a figure he labels U-7.
If you include these groups, the number of “unemployed” booms from 12.5 million to 27 million.