MONEY AND WORK

News from the Progressive Review, providing alternative news and comment for over four decades.

January 9, 2009

CHANGE IN WAY UNEMPLOYMENT IS COUNTED MAY UNDERSTATE PROBLEM

Pedro Nicolaci da Costa, Reuters - Figures collected for Reuters by John Williams, from the electronic newsletter Shadowstats.com, suggest that. . . if unemployment were still tallied the way it was in the 1930s, today's jobless rate would be closer to 16.5 percent -- more than double the stated rate. . . He and other critics have one particular sticking point with the current way of measuring unemployment: the treatment of discouraged workers.

Under President Lyndon Johnson, the government decided individuals who had stopped looking for work for more than a year were no longer part of the labor force. This dramatically decreased the jobless rate reported by the government.

"Both part-time workers wanting full-time work and discouraged workers tend to make the unemployment rate lower than it would otherwise be," says Robert Schenk, professor of economics at St. Joseph's College, Indiana.

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