The Big Lie On Unemployment

The administration is crowing over the fact that the unemployment rate has finally fallen, after six years, to 5.6%–not even a good number, by historic standards. But almost everyone understands that the reality is quite different, in part because the rate has dropped largely on account of people giving up, dropping out of the labor force, going on disability, and so on. But one question I have never seen answered is, what is the definition of “unemployed” in the official number? My understanding has been that a person may be working part time and still be counted as “employed,” but I’d never seen the details.

That important information was supplied by Jim Clifton, the CEO of Gallup, in his article on the Gallup web site titled “The Big Lie: 5.6% Unemployment.” Clifton’s article was one of our Picks a day or two ago. I was struck by it, in part because I don’t recall seeing anything this hard-hitting from Gallup, a genuinely non-partisan organization. You should read the whole thing, but this is the point I want to highlight:

There’s another reason why the official rate is misleading. Say you’re an out-of-work engineer or healthcare worker or construction worker or retail manager: If you perform a minimum of one hour of work in a week and are paid at least $20 — maybe someone pays you to mow their lawn — you’re not officially counted as unemployed in the much-reported 5.6%. Few Americans know this.

I certainly didn’t. That is a ridiculously low standard.

Gallup defines a good job as 30+ hours per week for an organization that provides a regular paycheck. [Ed.: I would call that a “job” rather than a “good job.”] Right now, the U.S. is delivering at a staggeringly low rate of 44%, which is the number of full-time jobs as a percent of the adult population, 18 years and older.

That is a shockingly low number. As Mr. Clifton concludes, there is no mystery as to why Americans aren’t “feeling” the supposed Obama boom.