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How the government underreports unemployment statistics

In May, 2013, the Bureau of Labor Statistics (BLS) reported an unemployment rate of 7.5 percent. But this BLS “U-3″ definition of “unemployed” is misleading, because it does not count (a) the “discouraged” unemployed (i.e., millions who, after several months of looking for work, gave up), or (b) the underemployed (e.g., PhD’s flipping burgers at McDonalds) and (c) part time employed (e.g., those laid off from full time jobs with living wages and benefits now working part time at minimal wages and little or no benefits). The BLS “U-6″ rate of 13.9 percent unemployed, which neither the government nor the press widely reports, is closer to reality, because it includes many part-timers seeking full time employment and most discouraged workers. The BLS also ignores another fast-growing group, the unemployed who become “disabled.” A recent National Public Radio report highlighted this phenomenon — millions filing claims for Social Security Disability Insurance after they were unable to find work. Claims have averaged 250,000 a month since 2009, and over 14 million are collecting benefits, up 20 percent since the recession began. Even if most disability claims are legitimate, millions are on disability insurance as an alternative to unemployment insurance. For these and other reasons, Shadow Government Statistics estimates that the true rate of unemployment is over 20 percent. And unemployment is increasing. Do the math: The government proudly reports that an average of 150,000 new jobs have been added per month since 2009. But twice that number of young people are coming of age and attempting to join the workforce each month! They’re competing with tens of millions of unemployed for those 150,000 jobs. We’re falling further and further behind.


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