EDITORIAL: Note to Obama: Unemployment is up

The real U.S. jobless rate is 15 percent

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The Obama administration keeps reporting supposed good news on the employment front. Americans sense that something is not quite right about the rosy official numbers, and a series of independent reports confirms their skepticism.

On Feb. 16, the Congressional Budget Office (CBO) released a report on long-term unemployment showing that the past three years have witnessed “the longest stretch of high unemployment in this country since the Great Depression.” The report observes that if the underemployed had not been excluded from official statistics, “the unemployment rate in January 2012 would have been about 15 percent.” The “share of unemployed people looking for work for more than six months,” i.e. the long-term unemployed, has been above 40 percent since December 2009, the highest level since these data have been collected.

One reason for the persistence of long-term unemployment is that people are eligible for unemployment benefits far longer than before the recession. White House senior adviser Valerie Jarrett helpfully reminded America that the Obama administration sees this as a net positive. “People who receive that unemployment check go out and spend it and help stimulate the economy, so that’s healthy as well,” she said Tuesday. Having record numbers of Americans on food stamps is also a form of economic stimulus, according to Secretary of Agriculture Thomas J. Vilsack. The administration is trying to make a virtue of these grim economic necessities.

Those who run out their unemployment benefits are increasingly seeking other forms of “stimulus.” A new report from JPMorgan Chase shows that Social Security disability claims have risen to a record $200 billion a year, with 5.3 percent of the working-age population claiming some form of federal disability payment. Mental-illness claims have particularly increased, which is a metric the White House would rather ignore.

The most sobering reality check comes from Gallup, which reports a daily, non-seasonally-adjusted 30-day rolling average unemployment figure. Lately, these numbers have not been telling a story the White House wants to hear. The official, adjusted numbers show monthly declines in unemployment from 9.1 percent in August 2011 to 8.3 percent in January 2012. However, the Gallup daily figures show unemployment dropping from 9 percent in mid-August to 8.2 percent at the end of October, floating up to 8.7 percent in November, dropping to 8.2 percent in early January and then pushing back up to 9 percent in the past five weeks. Gallup’s measure of underemployment has been tracking generally upward since August, from 17.5 percent to around 19 percent.

One reason for the disconnect between official and independent statistics is that the Labor Department has been gradually trimming the percentage of people it counts as officially part of the labor force. This number has shrunk from 65.7 percent to 63.7 percent since Mr. Obama took office. So while earlier this month the White House highlighted the news that January payrolls had risen by 243,000, the Bureau of Labor Statistics quietly dropped 1.2 million from the calculated workforce. Ejecting people from the labor pool makes it easy for the Obama administration to keep reporting favorable unemployment numbers. The food-stamp nation knows better.

The Washington Times

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