Recent presidents have played fast and loose with the definition of unemployment. There wasn’t much the rest of us could do about these bipartisan numbers games designed to mask how bad things really were. (Well, actually, the media might’ve chosen not to play along). Defining unemployment is one of the powers of the presidency.
Now that we’re mired in the so-called Great Recession, honesty about the numbers of unemployed really matters. It matters because economists are already suggesting that we’re likely to see yet another jobless recovery as the recession eases. It matters because were the public to know the truth about how many Americans are out of work or can’t find a full-time job, they’d likely demand their elected representatives do something about it.
According to the Bureau of Labor Statistics (BLS), an office of the federal Department of Labor, you’re unemployed if you do not have a job of any sort (including those on temporary lay off), have been actively looking for work during the past four weeks, and are “available for work.”
You’re employed if you did any work for pay or profit (regardless of whether its just a few, inadequate hours and you’d work more if you could), made at least one specific active effort to find a job during the prior 4 weeks, are an “unpaid family worker” in a family business, on strike, locked out, on unpaid personal leave, or kept off the job by bad weather.
Then there’s those who are neither employed or unemployed (like househusbands); they’re “not in the labor force.”
And, finally, you are “marginally attached to the work force” if do not have a job, but have wanted and looked for work in the past twelve months (just not the past four weeks). The numbers of these folks has “increased sharply” during the current recession according to the BLS. But again, they do not count as unemployed.
The June 2009 unemployment figure for the United States was 9.5%. When the BLS adds the unemployed to the number of involuntary part time workers (underemployed) to the number of marginally attached workers, the June 2009 figure is 16.5%. It refers to the higher figure as an “alternative measure of labor underutilization.”
There may be good methodological reasons for the current definitions. I suspect some labor statistician could make a compelling case for the status quo. But that’s not what concerns the under-employed and the marginally attached. They need decent full-time jobs, not reassurance that they’re not really unemployed.
One possible solution is for the government to encourage the media to report the higher figure, and for federal officials to use it themselves. Another approach is for the President to change the accounting system by which we define the unemployed. He could issue an Executive Order directing the Department of Labor to use the more comprehensive figure.
The Order might read something like this:
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release DateEXECUTIVE ORDER
REFORM OF THE DEFINITION OF UNEMPLOYMENTBy the authority vested in me as President by the Constitution and the laws of the United States of America, and in the interest of an accurate accounting of all Americans looking for work, it is hereby ordered as follows:
Section 1. Policy. Helping create jobs for those who want them is a key goal of my Administration. Our current method for determining the number of unemployed is inadequate and misleading. It undercounts the number of job seekers thus impairing our ability to assist them.
Sec. 2. Action. The Bureau of Labor Statistics in the Department of Labor shall replace its current definition of unemployment by the definition it presently considers an alternative measure of labor underutilization (also known as U-6).
Sec. 3. General Provision. The monthly unemployment figure shall consist of the sum total of those heretofore defined as unemployed, working part-time for economic reasons, and marginally attached to the work force.
BARACK OBAMA
THE WHITE HOUSE,
Date.
President Obama promised to help create five million new jobs while on the campaign trail. He made this promise when unemployment was considerably lower than it is today. Given that the unemployment rate is likely to climb further before it declines, his economic team will likely not be eager to make the slope of the President’s job creation hill even steeper.
But enacting an Executive Order of this sort (or pushing legislation if that’s what’s required to make the change) would be an important step towards the transparency in government presidential candidate Obama promised us. It would demonstrate perhaps unprecedented presidential solidarity with the under- and unemployed. And it would increase the chances we’ll see the job creation policies emerging from Washington we urgently need.
STEVE BREYMAN teaches at Rensselaer Polytechnic Institute. Reach him at breyms@rpi.edu