True Unemployment Is Much Higher Than You Think

On October 2, 2020, the US Bureau of Labor Statistics (BLS) issued its latest employment report and it wasn’t good news. Unemployment, BLS said, stood at 7.9%. It marked the fifth straight month that unemployment dropped, after the enormous jump from 4.4% in March (itself a significant increase over February’s 3.5%) to 14.7% in April.

But the September decline was only 0.5% and still left the United States well above February’s level when the labor market was extremely healthy. Or was it?

Most of what we hear about the economy, from journalists, politicians, economists, and pundits, is that we need to get back to where we were before COVID hit. But mid-way through October, that seems an unlikely prospect.

Coronavirus cases are surging. Temperatures are dropping, driving more people inside. Offices, restaurants, movie theaters and other gathering places have reopened, creating an ideal environment for the virus to spread, even among those sensible enough to take the precautions our “stable genius” of a president is actively discouraging.

But arguing that we need to get back to where we were before the pandemic tells a distorted story, one that many middle class, professional people of good conscience can only accept because of the class-segregated society in which we live.

The True Unemployment Rate in September, most people understand, was much higher than 7.9%. But how many realize that it was well over three times higher, at 26.1%? More importantly, how many realize that September’s level isn’t all that much higher than February’s (24.0%)?

The True Unemployment Rate is a figure calculated by the Ludwig Institute for Shared Economic Prosperity (LISEP). It counts as unemployed anyone not making a living wage, which it sets at an EXTREMELY conservative $20,000 per year, a sum that few people can possibly live on. LISEP also counts people who are involuntarily working less than 35 hours per week. All of these are people BLS considers “employed.” They were also the first ones to lose what jobs they had in the pandemic.

Consider that, using this methodology, when the pandemic hit and so many businesses folded, or laid off or furloughed their employees, the BLS unemployment statistic more than tripled, jumping from 4.4% to 14.7%. LISEP’s True Unemployment Rate also went up significantly, by almost 9 points, from 23.8% to 32.4%.

The increases are comparable in size, but they feel quite different, don’t they? One goes from an acceptable rate to a crisis, while the other goes from calamity to Armageddon.

It should come as no surprise to anyone that women are hit harder by unemployment than men (30.8% to 22.3% in September) or that there are severe racial disparities (32% unemployment for Black people, 30.8% for Latinx, and 23.8% for white people). Yet even the relatively advantaged groups are doing very badly when we apply a more realistic measurement.

Here’s another stunning number: according to Axios’ report on the LISEP’s findings, “Only 46.1% of white Americans over the age of 16 — and a mere 40.8% of Black Americans — now have a full-time job paying more than $20,000 per year.” That’s based on reading the unemployed as a percentage of the population rather than of the labor force as defined by BLS. So it will include, for example, so-called “discouraged workers” who have given up trying to find a job, and incarcerated people who will, in many cases, become close to unemployable upon release.

These figures do not reflect an economy in crisis. They reflect an economy that has failed. They reflect an economy that too many middle class, and certainly wealthier, people do not see. They don’t see the poverty the underpaid and underemployed live in.

Yet even many middle-class people feel the sting of this failed economic system. To pay their mortgage, manage their credit card debt, pay off student loans, and pay their monthly bills, they might have to work fifty, sixty or more hours per week. They may have a demanding full-time job and still must hustle for a few extra bucks in their off hours.

They’re the lucky ones. They also have the luxury of averting their eyes from the destitute rural towns that dot the US landscape, the burnt-out slums in every city, and the rundown parts of suburbia. These are areas too many voters rarely see, but they are there, and they are home to Americans who are struggling to make it through each day, whose hopes for their children grow dimmer all the time.

There’s no need for this.

It exists because it is the nature of the economic system in which we live, and for no other reason. In truth, it’s not even really the fault of the infamous 1% that Bernie Sanders points at so often. They, too, are acting in accordance with the system under which we live. That system dictates that the rich get richer, and that the wealthy will have disproportionate political influence. The 1% are merely playing their part, to varying degrees. Some understand that being too greedy could cause an uprising, others are less concerned. But none are going to fundamentally challenge this system.

How do the rest of us respond?

First and foremost, this is an issue of ethics. We must all ask ourselves if, in a country as wealthy as this one, it is tolerable that more than half of our population cannot make a living. Do we find it acceptable that the poor are so numerous we have to find ways not to count them in our official statistics; that the working poor slave their days away in order to make enough money that they only fall a little bit more behind each week; and that the vast majority of our “successful” workers are under constant stress from overwork and terror of losing what little privilege they have managed to accrue?

All of that we must ask and, if we come up with appropriately ethical answers, we then must ask how we are treating women, how are we treating Black and Brown people, how are we treating immigrants, how are we treating those with physical challenges? All of these are economic and class issues as well as social ones. We can’t address the issues of social justice with which we are finally, and at long last, only beginning to truly grapple, until we answer the questions of how we ALL feed our children, clothe ourselves, keep roofs over our families’ heads, and acquire the medicines and medical attention we all need from time to time.

In about two weeks, one way or the other, the latest presidential election will be over. Many people are voting for Joe Biden to “get back to normal.” Well, folks, “normal” is massive unemployment when we don’t use a twisted, bias, and utterly misleading measure. “Normal” is an awful lot of extremely poor people who are hurt, angry, and feel abandoned, and are therefore vulnerable to manipulation by demagogues of many kinds. “Normal” is an America that knows well how to hide a lot of its poverty, but that only makes it more dangerous, more deadly, and more widespread.

Others will be voting, as I did, for Joe Biden for the sole reason of getting rid of Donald Trump. Hopefully, most of us will not forget that Biden is a major part of the problem, with his decades of tireless work on behalf of huge banks, his endless advocacy of neoliberal policies, his hostility to policies to help working people, all of which belie the more tender rhetoric he is, understandably, now offering on the campaign trail. If he wins—and win he must if there is to be any hope—we cannot let this illusion that our “normal” is 5% unemployment persist. Since January 1995, our True Unemployment Rate has NEVER been lower than 22.1%, according to LISEP.

That’s intolerable. It must change, because people who cannot feed, care for, and house themselves due to poverty cannot make all the other changes we need. But most importantly, it is a crime against humanity and all that is moral that we allow it to happen. And if we don’t act against it for fear of Trumpism, then Trumpism wins anyway.