Greetings,
On Sat, 6 Dec 1997, Rebecca Peoples wrote:
> Shawgi,
>
> Would you please explain to me how the unemployment rate
> underestimates the unemployment situation. And what is the difference
> between the jobless rate and the unemployment rate? Are they not one and
> the same thing.
>
> Fraternally
> Rebecca
>
Rebecca, here is the section called "Behind the Unemployment Rate"
in Holly Sklar's (1995) book, "Chaos or Community?" It answers your
question. You may also want to check out State of Working America by
Mishel and Bernstein or any one of a number of numerous works which put to
rest all illusions about an "improving" economy.
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"The U.S. government downsizes the unemployment rate, but not the reality,
much as it does poverty. There's a large gap between the number of people
wanting jobs and the number included in the unemployment rate. The
official rate doesn't include would-be workers who have searched for work
in the past year, or even the last five weeks - but not in the past four
weeks. The official rate leaves out people defined as 'discouraged
workers', people with child-care problems and millions of others without
jobs. It doesn't include involuntary part-timers.
"Business Week observes, 'increasingly the labor market is filled with
surplus workers who are not being counted as unemployed. The rate of
labor force participation - those working or looking for work - has
dropped sharply for men since 1989. Estimated conservatively, some 1.1
million prime-age workers are out of the labor force compared with five
years ago...And there are at least 500,000 more workers with some college
who have jobs but are underemployed compared to five years ago.'
"Alternative unemployment and underemployment measures, such as the Urban
League's 'Hidden Unemployment Index', have typically adjusted the official
rate by adding in 'discouraged workers' and involuntary part-timers
('part-time for economic reasons') - two categories that the labor
department made more restrictive beginning in 1994, resulting in lower
official numbers. David Dembo and Ward Morehouse advocate a more complete
alternative 'jobless rate' which reflects the larger pool of jobless
workers (including 'discouraged') and adjust for involuntary part-time
employment using a ful-time equivalence formula. Their 1993 jobless rate
was 13.8%. Dembo and Wardhouse observe:
The Jobless Rate - about twice the official Unemployment
Rate - rises and falls with the official rate. However,
as more people are forced to work part-time and as
increasing numbers have dropped out of the official labor
force altogether, the Jobless Rate tends to diverge even
more from the official rate. During cyclical downturns
(recessions)...the Jobless Rate increases more than does the
Unemployment Rate as record numbers of Americans give up
looking for work and more and more people work part-time for
economic reasons...With each succeeding recovery period, the
Jobless Rate has fallen less and less. [This last observation is
key].
"In Europe too, unemployment is racheting upward. 'After each cyclical
downturn, [joblessness] locks in even higher', notes International
Management. 'Many who lose jobs never work again'. Over half of Europe's
400 largest firms planned major layoffs for 1995.
"the U.S. Labor Department acknowledged in late 1993 that the government
had been substantially underestimating unemployment among women..."(pp.
60-61).
What should be borne in mind is that capitalism has entered its
last stage, imperialism. As such, exploitation and oppression are
increasing. While alot of data substantiates this, alot is designed to
cover it up.
Shawgi Tell
Graduate School of Education
University at Buffalo
[EMAIL PROTECTED]
