THE BLOG
05/11/2010 09:34 am ET | Updated May 25, 2011

Who's Really Unemployed? When Are We Going to Do Something for Them?

The New York Times' lead editorial after the Bureau of Labor Statistics announced last Friday that the economy had created 290,000 new jobs in April, said that, "For all the recent talk about recovery, the economy's vulnerability was on full -- at times stomach-dropping -- display this week." Well, what was also "on stomach-dropping display" was our government's continuing inability to get its act together when it comes to answering the two questions "Who's really unemployed?" and "When are we going to do something for them?"

290,000 new jobs in the course of a month are a lot of jobs -- as reference, the economy needs to create 140,000 jobs per month in order to keep up with natural growth in the labor force -- so President Obama was right when he immediately called the report "particularly heartening." The administration thereafter declared that our (economic) spring was right around the corner, and much of the major media jumped on the bandwagon.

Yet, at the same time that everyone was getting downright giddy over the relatively large number of new jobs created, the BLS announced that the official unemployment rate rose from 9.7% to 9.9%, an obvious and complete contradiction of the job creation news which the administration and the media alike glossed over. This one-sided and unwarranted optimism about the state of the economy misled American workers -- for the umpteenth time -- and, most concerning, it glossed over the reality that as today's economy is structured, there is very little opportunity to find employment for the more than 22 million out-of-work Americans who need to be employed before this country is again fully employed. The BLS and the administration officially announced that in April:
  • U.S. employers increased (non-farm) payrolls by 290,000 jobs and there are 15.3 million unemployed workers;
  • The unemployment rate increased to 9.9%; and
  • The U.S. economy needs to create 7.5 million new jobs in order to be fully employed.
In fact, and in sharp contrast, American workers need to know, the administration needs to acknowledge, and Wall Street and those who report on it need to understand that:
  • "Official unemployment" is only one arbitrarily defined category of unemployment BLS measures -- the number of unemployed workers in all categories of unemployment increased by 499,000 and there are 30.3 million real unemployed workers (all categories);
  • The all-in real unemployment rate increased to 18.9%; and
  • The U.S. economy needs to create 22.2 million new jobs in order to be fully employed in real terms.

For myself and other economic realists this month's massive 789,000-jobs swing between what's "official" and reported (non-farm payrolls increased by 290,000 jobs) and what's truth and largely ignored (the number of unemployed workers nonetheless increased by 499,000) is a most painful reminder of the inanity of counting each month only those unemployed workers actively looking for jobs -- and leaving 'uncounted' the millions of workers so "discouraged" that they no longer actively look for work but would take a job at the drop of a hat. We also don't acknowledge those millions of workers who accepted, out of necessity, a part-time job even when they wanted and needed a full-time job.

More than 60 years ago both major Parties decided to adopt this methodology because it was (and obviously remains) politically 'helpful.' Wouldn't it make more sense, after all these years of deluding America's workers, to every month report on all categories of unemployed workers, using the best available measurement tools (which sadly is also not the case right now)? Wouldn't it be fairer as well as more effective to focus our energies on the number of unemployed workers, as economic realists do, rather than on the number of employed workers, as administrations, past and present, and Wall Street do?

Politically and statistically, this country has always cared about how many Americans are employed -- doing so lies at the very heart of who we are as an economy. But in the last thirty years we've lost sight of how many of our fellow Americans are un-employed, which is what lies at the heart of our democracy and our commitment to equal opportunity.

Today, if we were properly focused on the un-employed, we would be asking ourselves how this economy we have today can possibly create 22 million jobs in the near term -- even at the relatively high rate of job growth that we just saw in April, 290,000 jobs, it would take 77 months (more than six years!) to create 22 million jobs. If we did this, we would quickly see that it is not the structure of our economy that is at the root of our massive jobs problems, so much as it is the dogmatically free-market approach of the Geithner-Summers-Romer team that is keeping us from having an industrial-manufacturing policy, reciprocal buy-domestic requirements, and fair free trade instead of just free.

Today, if we were properly focused on the specifics of who's un-employed, we would be developing a jobs policy that meets their needs, for while every cross section of America has suffered in this Great Recession, it's clear that America's workers have not suffered equally. This of course is to be expected, but it means we have to be especially sensitive to those newly unemployed workers who will have more difficulty being re-employed. These particular workers are more likely to be men, African-American or Hispanic, have at most a high school diploma, and, notably, have been previously employed in construction and manufacturing.

Construction jobs can come back if the housing market picks up, but that less educated African American or Hispanic man who previously received a fair wage and benefits working in a factory in Ohio or Michigan or North Carolina or Pennsylvania is not going to see his job come back without a very heavy lift by the administration and Congress. To date, we don't find this commitment, and its absence will be ever more evident as the effects of government economic stimulus fade later this year.

Political leadership was put to the test this past week, as it has been for every one of the last 66 weeks, but I thought last week's results were particularly uninspiring. The general economy remains desperately in need of repair, even against the backdrop of financial reform, and yet last week we let financial reform suck all the oxygen out of the room while we smacked our lips over a single month's job creation that was heavily benefited by short-term hiring for the Census.

We really must do both right now -- general economy initiatives and financial reform -- and those 22 million new jobs that we need are bluntly telling us so every day. And as I have tried to point out in this space, Tuesday after Tuesday, it's really only a handful of initiatives that the administration and Congress need to immediately undertake in the areas of Jobs and Trade to best find those 22 million jobs and ensure that they are high quality.

It would be nice to finally see them.

Leo Hindery, Jr. is Chairman of the US Economy/Smart Globalization Initiative at the New America Foundation and a member of the Council on Foreign Relations. Currently an investor in media companies, he is the former CEO of Tele-Communications, Inc. (TCI), Liberty Media and their successor AT&T Broadband. He also serves on the Board of the Huffington Post Investigative Fund.