The recovery isn’t reaching everyone

Published 7:04 pm Saturday, February 7, 2015

Americans know the numbers are wrong. They feel, deep down, that the rosy unemployment figures don’t reflect the realities they see every day.

Now the head of the Gallup polling agency has come out and said what many feel — the numbers are a lie.

“The official unemployment rate, as reported by the U.S. Department of Labor, is extremely misleading,” says Jim Clifton, chairman and CEO of Gallup. “Right now, we’re hearing much celebrating from the media, the White House and Wall Street about how unemployment is ‘down’ to 5.6 percent. The cheerleading for this number is deafening. The media loves a comeback story, the White House wants to score political points and Wall Street would like you to stay in the market.”

The unemployment number is misleading because it doesn’t count everyone.

“If you, a family member or anyone is unemployed and has subsequently given up on finding a job — if you are so hopelessly out of work that you’ve stopped looking over the past four weeks — the Department of Labor doesn’t count you as unemployed,” Clifton says. “That’s right. While you are as unemployed as one can possibly be, and tragically may never find work again, you are not counted in the figure we see relentlessly in the news — currently 5.6 percent. Right now, as many as 30 million Americans are either out of work or severely underemployed. Trust me, the vast majority of them aren’t throwing parties to toast ‘falling’ unemployment.”

The “underemployment” factor is important, because it affects lives but is glossed over by the official unemployment rate.

“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 percent,” Clifton notes. “Yet another figure of importance that doesn’t get much press: those working part time but wanting full-time work. If you have a degree in chemistry or math and are working 10 hours part time because it is all you can find — in other words, you are severely underemployed — the government doesn’t count you in the 5.6 percent.”

Why is this important? Because Washington is crafting policies based on a false narrative of a recovered economy. New taxes on energy and banks, and even a proposed hike in the gas tax, are based on the notion that Americans have weathered the tough times and are now ready to “contribute more” to Uncle Sam.

The problem is that Americans know the recovery isn’t yet real, at least to them.

“I hear all the time that ‘unemployment is greatly reduced, but the people aren’t feeling it,'” Clifton says.

On Friday, the Labor Department announced that 257,000 jobs were added to the economy in January. That’s good news, except that another 703,000 entered the workforce.

The economy is still struggling. More importantly, Americans are still struggling.

Cooking the books on unemployment won’t change that.