Much ado has been made lately about the 5.6 per cent unemployment rate in the US. President Barack Obama touted it in his State of the Union address and economists often quote it in their sunny projections for 2015 and beyond.
But one US CEO says the unemployment rate is “one big lie” and points to the millions of long-term unemployed and underemployed Americans as a sign the jobs situation is not as peachy as proclaimed.
“And it's a lie that has consequences, because the great American dream is to have a good job, and in recent years, America has failed to deliver that dream more than it has at any time in recent memory,” wrote Gallup CEO Jim Clifton in a post on his company’s website. Gallup is a research and consulting firm that also publishes respected polls.
According to the latest data available from the US Bureau of Labour Statistics, the US unemployment rate fell by 0.2 percentage points to 5.6 per cent in December. The number of unemployed people in the US dropped to 8.7 million.
But Mr Clifton said that 8.7 million does not account for anywhere close to the total number of unemployed people in the US. The labour statistics don’t include people who have been out of a job for a while and have stopped looking for work, or people who hardly work.
“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,” Mr Clifton wrote. “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.”
Anyone who works a minimum of one hour a week and gets paid a minimum of $20 per week is not counted among the unemployed, according to Mr Clifton, who said that the faulty reporting of the unemployment numbers is part of the reason the US middle class has not felt the economic recovery.
“When the media, talking heads, the White House and Wall Street start reporting the truth – the percent of Americans in good jobs; jobs that are full time and real – then we will quit wondering why Americans aren't “feeling” something that doesn't remotely reflect the reality in their lives. And we will also quit wondering what hollowed out the middle class.”
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